I represent taxpayers in Elizabethtown and the rest of Kentucky who have found themselves in trouble with the IRS or State taxing authorities. Many clients that I work with are Clergy/Ministers and they have special tax issues that can make buying a home a little more detailed than the regular home buyer.
Many ministers may find themselves being audited by the IRS or State DOR because a large percentage of tax preparers don't understand the special tax needs of ministers, especially how the Housing Allowance works. Real Estate Agents can be a huge help to these potential clients by understanding just how the Housing Allowance works and what is and is not allowed by the IRS for them to qualify for this special tax benefit.
Ministers are allowed to take the "least of three" rule. That is, they can take as Federal income tax-free a housing allowance that is the least of:
1. The Fair Rental value of the home + furnishings + utilities
2. The Actual Housing Allowance designated by their church
3. The Actual Housing Expenses incurred during the year
The minister should take this into consideration when buying a home as the Housing Allowance also has to be reasonable for the area/community they reside in addition to other considerations.
So, real estate professionals can be a great asset to any potential client who happens to be a qualifying minister when it comes to picking the right home. Knowledge is power, and we as professionals need all the knowledge we can grasp because many times, our clients may not even be aware of the tax law and how it affects their particular situation.
If you or someone you know has a clergy/minister client that needs help with unfiled tax returns, an audit or some other federal or state tax issue, please feel free to contact me at 270-506-3935 or 270-634-HELP or by email at email@example.com
P.O. Box 209
Rineyville, KY 40162
Ph. 270-506-3935 or 270-634-HELP