What are the advantages of the church reimbursing the pastor for his business expenses?

As of the 2018 tax year employees are no longer able to deduct their business expenses from their federal income tax.  The only way for a pastor to avoid paying income tax on their professional expenses is for their employer to reimburse these expenses.  A church/employer may reimburse tax free each professional expense the pastor documents or the church/employer may utilize a professional reimbursement account.  The reimbursement is not reported on the Pastor’s W-2.  It is not income.

Attention: Tax Law is subject to interpretation. Please be advised that the material contained on this Web site is for information only and is not intended to be a substitute for professional legal advice. The Stewardship Services Foundation endeavors to update the information on this site on a regular basis, but cannot guarantee its accuracy at all times.