Clergy Deductions

[dhanco2000]

If Clergy helps pay for items for people in the congregation (handouts to people in need), are these allowable deductions? I have never filed a return for clergy and am not sure how this works. Thanks

[The Tax Shelter]

I would not consider this a deductible expense.  Especially since Clergy should (often don't) receive a W-2 (with $0.00 SS & Medicare wages).  As an employee work expenses are no longer allowed.  If the wages were incorrectly reported on a 1099, this would create the "place" for such a deduction, but I still don't consider it an appropriate deduction.  A better option would be to give the money to the church and have the church help the family/individual.

[pamdory]

What you are describing sound like gifts to me, and don't seem to meet the criteria of a business expense - ordinary and necessary for the production of income.  That's assuming they are related to a Schedule C - typically for any honoraria received.  As mentioned before, if your client's income is reported on a W-2 there is no way to reduce the income by expenses.

And since the payments are being made directly to individuals they would not qualify as charitable contributions.

Clergy taxation is a strange animal and has aspects that fall outside of normal tax logic.  Take some time to research the special treatment related to SE tax and parsonage allowance (if it applies).

Yes, I know I just used "normal" & "logic" to describe tax. 

😂

[qbteachmt]

"helps pay for items for people in the congregation (handouts to people in need)"

You would be donating directly to people, in this case.

You would want to give the money to the church, or buy supplies for the church. Then, the Church does handouts.

What you are asking is: How should this person Donate?

Because none of the scenarios makes it business.