WHAT DOES THE HOUSING ALLOWANCE EXCLUSION INCLUDE?
Basically, most expenditures to provide a home for the dual status minister and family can be bought with income tax free housing allowance dollars. This includes rent or principal payments, real estate taxes, mortgage interest, insurance, improvements and repairs, furnishings, appliances, decorator items (rugs, drapes, art, painting, wallpapering, etc.), linens, towels, utilities (including non-business phone use), exterior costs (lawn mower, garden hose, lawn tools, etc). The following are specifically excluded as housing allowance expenses: maids or hired lawn care, personal toiletries, paper products, clothing, jewelry, or items strictly for personal use. A comprehensive list is included in our Audit Proofing Your Church & Its Clergy.
