Newsletter

Picture 059 (2)May 2017

This Quarter’s Topics

2016 Tax Season

Housing Allowance

SEP IRA

Roll-overs

 

2016 Tax Season
We had a very busy and very rewarding tax season! By April 18th we were able to prepare 2,460 tax returns and by the end of 2017 we will have prepared about 2,600 tax returns. Thank you for giving us the opportunity to minister to you!

Housing Allowance
Each year you should have some portion of unused housing allowance that you claim on your tax return. You are always limited to the smaller of what you spend OR what you designate. You do not want the amount you designate to be smaller because that will mean you cannot claim everything you spend. Always designate your housing allowance higher than you need so that you can claim everything you spend.

SEP IRA
We have noticed several pastors who were advised to use a SEP IRA this year. Although clergy are self-employed for social security and Medicare purposes they are employees for retirement planning purposes. Clergy are not eligible to use a SEP IRA. The IRA is not the best vehicle for a minister – a 403b is: http://ssfoundation.net/pastors?qa_faqs=403-b-versus-an-ira

Roll-overs
We also noticed several pastors were advised to roll their 403b into an IRA. This is not a good idea. You lose the ability to designate distributions as housing allowance when you roll your 403b into an IRA. In addition, you would be required to take a minimum distribution from an IRA at age 70 ½ even if you are still working. You do not have a required distribution from a 403b as long as you still work, even part-time.

Sincerely in Christ,

James W. Rickard

 

 
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.