Sensible Stewardship
By Amy Artiga
Year-End Tax Planning for Pastors
W
e’re coming to the Christmas season and the end of the year, so you probably have a lot on your mind and plate right now. If you shared your “To Do” list for the rest of 2023, I doubt taxes would be included, since most people don’t think about them until spring. But if you could take time to consider these five year-end tax planning opportunities between now and January 1, it could be worth the effort.
has already been designated, you might as well take full advantage of it, that is, if it fits in your budget.
1. Compare your actual housing expenses with your 2023 designated housing allowance. As we wrap up the year, it’s time to compare what you’ve actually spent on housing with what you anticipated and designated as housing allowance. If you’re not on track to use your entire designated allowance, now might be a good time to do that project you’ve been considering. Since the housing allowance
2. Check your tax withholding. It can be hard to get withholding right, especially for pastors who have to pay self-employment taxes. By now, you should have a good idea of what your 2023 total income will be, so it’s a good time to doublecheck to make sure you have been withholding enough from your paychecks or paying enough in quarterly estimated tax payments throughout the year.
Winter 2024
You may not have a need to spend your entire housing allowance in 2023, and that’s okay. The excess allowance will need to be added back to taxable income when filing your return in a few months. There is no penalty for this, but your tax bill could be a bit higher since what you didn’t spend will be taxable.
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