Tuesday, March 26, 2013

I'm almost ready to take my taxes to the tax lady

Taxes, for 'ministers of the gospel' are a little odd, so I'm glad Jane is there since she's seen me through them for a bunch of years now.

Here's the oddest part of taxes for 'ministers of the gospel'. We are, by law, allowed to not declare any income that we can demonstrate went to the cost of housing. The history of this IRS allowance goes back to the point where it applied to ministers, school teachers and members of the armed forces. Over the decades the other two groups lost the exemption, but the Church, for all its flaws and warts, still is a mighty lobby in Congress. So it is still true.

So, if I can verify it, I don't have to declare any income for utilities, mortgage, repairs, improvements even toilet paper, if I have the receipts. AND, get this, I can still deduct my mortgage interest! Talk about 'double dipping'. Amazing. And, as Conkrite used to say, 'that's the way it is...."

Every penny I get paid by the Middlesex Area Cluster Ministry is, on my W-2 form "housing". Not declared as income. And whatever beyond that is housing expenses I can deduct from my Church Pension Fund payments and not declare.

SS, of course, which both Bern and I get, is not taxed since the money I make working is 'housing' and not income though I make enough that if it were income I'd have to give $ back to SS. Go figure....

Here's the problem. We did some major stuff last year:
        new roof--$11,500
        paint house--$5,900
        new kitchen--$16,000

Add that $33,400 to the normal $24,000 in housing expenses and chances are, we'll pay no taxes this year and get a load of money back from both the Feds and the State.

My question for Jane is going to be this: can we spread this out a bit AND will this tax filing flag us for an audit?

I can pass the audit, it's just that I've been told it's a pain.

So, here's the thing: The Church Pension fund is a good reason to feel a call to priesthood in the Episcopal Church. We had more income this year than we ever had when I was working full time. Is that crazy?

And now my biggest worry is that I might be audited by the IRS. Is this life 'through the looking-glass or what?'

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About Me

some ponderings by an aging white man who is an Episcopal priest in Connecticut. Now retired but still working and still wondering what it all means...all of it.