Other expenses a Minister is allowed

[Foxy-Lady]

This is my first Pastor return.  I know the church income goes to Schedule C and the housing goes to Schedule SE.  The housing costs interest and taxes Schedule A, but the Standard Deduction will be used.  He purchased computer equipment and built it for exclusive church work. This included a Laptop and Desktop replacement for the Pastor.  Secretary/Treasurer home equipment .  Total is $4,755.45.  Is this an allowable deduction and if so where?

[TaxGuyBill]

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@Foxy-Lady wrote:

I know the church income goes to Schedule C

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I would suspect that most religious employment would be the pastor/minister/priest/etc. being an EMPLOYEE with a W-2, rather than an Independent Contractor.  Have you looked in to that aspect of it?

[Foxy-Lady]

There are no employees just him as the pastor. He has other W2 employment.  I just need to know about the equipment he purchased for the exclusive use of the church. Can I show it as supplies on the 1040C?

[qbteachmt]

You keep using the phrase "the church;" is this person running their own church? That's what is confusing. They run their own church; or they work for a church? Or, you have two different churches, and the other church pays him as an employee on W2, and the Sched C is for the SE part of that job?

As a Sched C filer, he won't have someone else's ("the church's") equipment on his own return. He would have his own equipment on his return, for doing the other work or, his business associated with being an independent minister not working for "the church."

That's where this gets confusing.

[Foxy-Lady]

He is the pastor of Liberty Baptist Church.  He is not the owner.  Since the very beginning he has been a 1099 individual. Due to his actual profession, as an engineer, he purchased and built the computer equipment. Liberty Baptist did not reimburse him.

[TaxGuyBill · Accepted solution]

If he truly is an Independent Contractor (which seems wrong), business expenses are treated just like any other Independent Contractor - on Schedule C.

[qbteachmt]

"He is the pastor of Liberty Baptist Church. He is not the owner. Since the very beginning he has been a 1099 individual."

That doesn't make it Correct treatment, though.

"Due to his actual profession, as an engineer,"

He likely should get a W-2 from the Church, as well. Just because he already has a different employment position, doesn't affect the classification for the church relationship.

"he purchased and built the computer equipment. Liberty Baptist did not reimburse him."

You have to determine the facts and circumstances. You cannot claim that is for the Church, when he doesn't own the church and is not an employee of the church and did not get reimbursed by the church. If it is at his office, it is his. If he used it for his business, it is his.

This church and this person need some worker guidance.

[qbteachmt]

I guess we never really answered:

That is expensive equipment. I suggest you read IRS guidance for Expense vs Capitalize.