In the realm of Minister Income Tax, there is so much to do that you can spend a week researching it and come away just as uncertain as when you started. But it doesn't have to be that way. It all depends on where you get your information.

If you have been called by God to start a church, or to help start a church for which someone else will serve as ordained ministry, you have no choice but to learn as much as you can about minister income tax matters. One of the biggest areas of confusion relates to the housing allowance or, parsonage. And one of the biggest errors made with housing allowances or parsonage is understanding the expenses that my be included.

For the purposes of minister income tax, expenses that may be included in a housing allowance designation include:

1. A down payment on a home,
2. Principal and interest of mortgage payments (including prepayments),
3. Utilities (electricity, gas, water, trash pickup, and local phone charges,
4. Upkeep or maintenance,
5. Purchase and repair expenses for furnishings (including appliances),
6. Home-owner’s insurance,
7. Property taxes,
8. Structural repairs and remodeling,
9. Yard maintenance,
10. Maintenance items such as house cleaners, bulbs, etc.,
11. Pest control, and
12. Homeowner association dues.

The church should make sure to designate a housing allowance that will be sufficient to cover all of the minister’s actual expenses.  The IRS provides the following guidance, so it's important to study it and understand it well. Many a church has gotten into much trouble with respect to minister income tax matters, either with the IRS or with the minister, by under or over-designating.

If you have been called by God to start a church and you're wondering how you should deal with these types of issues, you can't go wrong with the amazing church-starting resource from Abe Hernandez, Es., a devoted Christian and church law expert.

Mr. Hernandez has written Building On Faith: Everything You Need To Know About Starting Your Own Church, which is the gold standard in use today by hundreds of churches nationwide.