Counsel of Chalcedon
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The Preacher and His Tax Return

How would you like to see your preacher get a raise next year? Perhaps the giving is down in the church, but he really deserves an increase in salary. As strange as it sounds, it may very well be possible to give him a raise without increasing his salary. Through proper tax planning by churches and pastors, some pastors may be able to retain a greater portion of their income by paying less tax. Less tax means more spendable income which amounts to a raise for your pastor.

I am often asked if the federal government requires ministers to pay income taxes on money they receive for preaching the gospel. The answer to that question is yes. Men who receive their living from the gospel are liable for taxes on income from that gospel. Some ministers have objected to such taxes citing the principle of separation of church and state, but to no avail. Whether you agree or not, it is interesting how the "separation" doctrine is devoutly used to restrict the freedoms of Christians, but when a reduction in revenue is perceived for Uncle Sam, "separationism" is conveniently overlooked.