July - August 2016

How a church pays its pastor can make a significant difference in the amount of money available to a pastor. For example, if a church truly has a limited amount of funds to provide pastoral support, they may still be able to reimburse the pastor’s church-related business expenses under an accountable expense reimbursement plan. To fail to do this is bad stewardship, since the minister needlessly loses money. Why? Because the pastor’s potential business expense deductions on Form 1040 do not equal tax-free reimbursements of business expenses. In effect, such a church has taken money out of its pastor’s pocket through inadequate practices.

Dan Busby is a certified public accountant and president of the Evangelical Council for Financial Accountability (ECFA).

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