Clergy auto allowance

[Academy Tax]

I haven't found the subject of auto allowance in the publications or the
Tax Book. Is this allowance taxable? What kinde of records should the
minister keep; ministerial, self-employment, other?? is such an allowance
treated the same as home?? Church hasn't told me yet if allowance is
accountable or non-accontable.

[JohnH]

Accountable or non-accountable matters a great deal.
And no, it is not treated the same as a Housing & Utilities Allowance - nowhere near the same.

The minister should be receiving a W-2, and if so, then the accountable plan allows him and the church to omit it from his W-2 form. (Provided, of course, that accurate records are kept and he submits reimbursement requests to the church) If it isn't treated properly and turns out to just be a flat dollar allowance, it has to be added to his income. He then has to deduct auto expenses via the 2106/Schedule A route with the 2% haircut, plus he has to include it in his S/E income. So a non-accountable plan for a clergy person is an expensive way to go.

[Academy Tax]

Thanks for the excellent input. I almost suspected that would be the scenario.

[ruthc]

Form 2106

John, I think you meant to say use Form 2106.

[JohnH]

Darn iPhone!
Thanks Ruth - I corrected it.

[John of PA]

I just did a return (Catholic Priest, no vow of poverty) who gets a monthly allowance that includes reimbusement for personal use of auto, unaccounted for plan. The Parish includeded this alloowance in box 1 taxable wages on his W-2. Hope this helps.