Clergy Year-end Tax Planning Strategies:

Here's a quick tax checklist to consider before December 31st:

1. Give, Give Give

Save receipts for cash donations. Those unused items cluttering closets can also be donated to a charity. To claim these amounts for 2011, you need to deliver items or mail checks on or by December 31st (postmarked); Checks placed in the offering on the first Sunday in 2011 will not qualify for a charitable contribution deduction in 2011. 

2. Review your housing allowance.

If your actual housing expense is equal or greater than your designated amount, your housing allowance may need to be amended before the next pay period. Housing allowance can be amended at any point during the year. However it can not be changed retroactive.

3. Save, Save, Save - Add to your retirement accounts, 403b and IRAs:  

The deductible amount for a contribution to a traditional IRA is up to $5,000 per person, and up to $6,000 per person age 50 or older. 403b contribution must be made by December 31st. There's even more time to add to the value of your IRAs, right up to the April 15th deadline.

4. Check the Amount of Your Medical Deductions for 2011:

It's not too late to schedule dentist or eye doctor appointments. There are a number of medical costs that are deductible including lasik eye surgery and expenses for installing for ramps, railings, etc. in a home to accommodate disabilities. Also, don't forget about mileage to and from the doctors, hospitals, and the pharmacy.

5. Keep track of unreimbursed ministry expenses: 

This includes mileage to visit sick and shut-in church members and trips back and forth to the church for services, counseling sessions and meetings, reference materials and books, church supplies and equipment paid out of pocket. Often these expenses are overlooked but could add up to an itemized deduction if it exceeds 2% of adjusted gross income. If the clergy reports income on a Schedule C, these amounts could help to reduce Self-Employment taxes.

For more information, call us at (404)793-0303.

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