Save Your Pastor Some Money

If you are responsible for helping develop your church’s annual budget, you may be able to help your pastors and church employees in a big way…

In the United States, the tax laws changed in 2017 with the passage of the tax cut bill. That bill no longer allows employees to deduct unreimbursed business expenses from their personal income taxes.

This was detrimental to pastors who were accustomed to taking congregation members to lunch, for example. They might pay for the meal out of their own pocket, then deduct the expense from their personal income taxes.

But they are no longer allowed to deduct those expenses from their taxes. The result is that many pastors have been paying higher taxes since the bill.

As a deacon, you can advise the church to restructure its employee compensation plan if it hasn’t already. The church can reimburse pastors for expenses like these, which should come out of the church’s budget, not the pastor’s income.

Here is a repository of information related to how to accomplish this goal:

Guidestone Compensation Planning Resources

Guidestone gives this valuable information away for free because they sell insurance plans and offer retirement programs that can help churches who want to provide low-cost benefits to their pastors and staff.

The bottom line is that churches can help their pastors save hundreds if not thousands of dollars in unnecessary taxes by restructuring their compensation plans. Done correctly, this can be a budget-neutral adjustment. 

Guidestone’s resources can explain the process and help you do that with the sample forms and guidelines on their website.

If you think your pastors could benefit, I recommend that you look into this before the next budget is approved.