08 Mar Non-deductible and deductible ministry expenses?
Generally speaking, a deductible ministry expense must be “ordinary and necessary” for it to count as a write-off. Ordinary and necessary simply means it’s a common expense for someone in the ministry, and it’s essential for the operation of your church.
Unfortunately, you can’t deduct all the food that you consume on the job or the travel expenses incurred. These examples may seem like no-brainers, but they’re not actually qualified deductions.
Snacking while working
Rule of thumb: if eating on the job is not a requirement for employment, then it’s not a deduction. If you’re merely a busy minister trying to save time between meetings, consider it a personal expense.
Stocking your home office with groceries
It’s very unlikely that IRS would allow your grocery bill as a tax deduction — even if you’re outfitting a home office.
Grabbing a solo lunch
Getting lunch by yourself doesn’t count as a ministry-related meal, even if you hop on a call at the cafe. This includes getting a coffee while working at your local coffee shop.
Rule of thumb: If you’re alone, it’s not deductible.
The cost of bringing your child or spouse on a trip
If you bring your child or spouse on a ministry-related trip, your travel expense deductions get a little trickier. In general, the cost of bringing other people on a ministry-related trip is considered a personal expense — which means it’s not deductible.
You can only deduct travel expenses if your child or spouse:
- Is an employee of the church,
- Has a bona fide ministry purpose for traveling with you, and
- Would otherwise be allowed to deduct the travel expense on their own.
Some hotel bill charges
Staying in a hotel may be required for travel purposes. That’s why the room charge and taxes are deductible.
Some additional charges, though, won’t qualify. Here are some examples of fees that aren’t tax-deductible:
- Gym or fitness center fees
- Movie rental fees
- Game rental fees
Once you have established that the trip was for ministry purposes you must then show that you really were away from home. The IRS usually makes that determination based on whether you have traveled away from the general area or vicinity of the “tax home” of your principal place of business.
Original content by clergyfinancial.com. This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.