Taxes

If you are like many ministry families, you have just paid your last quarterly income tax payment of 2006 to old Uncle Sam. I used to always get really nervous around this time of year since it would soon become apparent whether or not we had paid in enough to the government or if we would have to kick in some more. We’ve had both kinds of years. Mostly the good ones, though. We’ve always done our own taxes, and have been blessed to have a really good friend who talks me through it each year and helps with the big questions. Thanks Diane!

There are a couple of great resources out there that have helped us in our tax preparation and planning. One is the Income Tax Guide for Ministers and Religious Workers by B.J. Worth and the other is The Zondervan Minister’s Tax and Financial Guide by Dan Busby. Both of these books have been invaluable to us and have answered many of our questions. Our previous church made several changes in their accounting practices because of these books, too. The maddening thing about taxes is that the rules change frequently, so each of these guides is updated yearly.

It is disturbing to me the number of churches that are unaware of specific tax laws for ministers. And it is equally disturbing that many professional tax preparers are also ignorant of those laws and special considerations. I think each ministry family should educate themselves and take charge of this part of their lives. Ask the financial person at your church to help you. Buy one of the above resources and read it. If you don’t understand it, then ask someone you know who is knowledgeable about the subject to help you.

Over the years we have had friends who have been completely shocked about the money they owe to the government when tax time rolls around, because they had not been educated about what to expect or what to plan for.

In her last post, Lori mentioned a few ideas for saving money. Here are a couple related to taxes: Learn to do your own taxes (we spent $150 one year to pay someone to do ours and most of the hard work was already done—the compilation of all those receipts!). Find out about the things you can deduct from your taxes, save the receipts and deduct them. It takes a little effort to keep track of business miles and all those receipts for things you buy for your ministry and your home, but it is worth it! Every penny adds up!