Contact UsI am a church volunteer looking to hire an licensed pastor/singer entertainer for a one-time church engagement. He sings and plays guitar but I don't think there is any formal message or sermon.
He is a local resident but has asked for a third of his fee to be allocated as a housing allowance. I am aware that this lowers his 1099 income, self employment tax, etc.
Questions: 1) Is this appropriate given his local proximity?
2) Is it appropriate given that we do not consider this a guest pastor but primarily a Christian themed entertainer?
3) If yes to the above, is a third of the total fee an appropriate amount? (The church would still issue him a 1099 for the unallocated portion).
Any insight would be appreciated. Thanks
Questions: 1) Is this appropriate given his local proximity?
2) Is it appropriate given that we do not consider this a guest pastor but primarily a Christian themed entertainer?
3) If yes to the above, is a third of the total fee an appropriate amount? (The church would still issue him a 1099 for the unallocated portion).
Any insight would be appreciated. Thanks
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Tax Professional Answers
John Stancil
1. Yes, you may provide a portion of the fee as housing allowance. The fact he is local is of no consequence in this case.
2. This is not really a factor here. He is leading in worship, which does not have to include a "sermon."
3.One-third is certainly appropriate. It is his responsibility to determine how much of his housing allowance is to be excluded based on his housing costs. Your responsibility is just to designate the amount.
The housing allowance must be designated in advance by an appropriate body of the church. There is no place on the 1099 to show the housing allowance, so a separate statement should be included, indicating how much housing allowance was paid. The 1099 should reflect only the amount not designated as housing allowance.
Hope this helps.
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413 weeks ago
2. This is not really a factor here. He is leading in worship, which does not have to include a "sermon."
3.One-third is certainly appropriate. It is his responsibility to determine how much of his housing allowance is to be excluded based on his housing costs. Your responsibility is just to designate the amount.
The housing allowance must be designated in advance by an appropriate body of the church. There is no place on the 1099 to show the housing allowance, so a separate statement should be included, indicating how much housing allowance was paid. The 1099 should reflect only the amount not designated as housing allowance.
Hope this helps.