Ah, the holidays are upon us. Last this week most of us gathered with family or friends for the stated purpose of acknowledging how God has blessed us over the last year. Then we shared a meal together that suggests we think we will never eat again. But this isn't very tax related....
It will soon be Christmas, and the family memories will hopefully continue to grow. One common practice is to acknowledge how our pastors have blessed us over the year, and often that is done with some monetary gift. While the mechanism varies a bit from church to church, parishioners one way or the other give money through their church. The church office combines the gifts and the pastor (or pastors) receive a nice Christmas bonus.
A key word here is "bonus" as, like it or not, this represents taxable income to the pastor. Yes, I realize that the money originated from the gifts of those in the church, but doesn't most of the money to operate the church and pay the pastor's compensation originate from similar gifts?
These gifts do not have to be taxable compensation. The best way to avoid taxation of that money for your pastor is to simply hand the money to your pastor directly. As long as your total gifts personally to your pastor throughout the year stays below the gift limit ($13,000 for 2012) then there is nothing to worry about.
Sometimes people object to this because by giving the money directly to their pastor, they reason, they do not get a tax deduction for the gift. They are correct. But what is motivating the "gift" in the first place? Besides, when they give money to their church for the "pastor's gift" that is a contribution that is designated for a specific individual and is therefore not tax deductible anyway. (There are other rules for handling support of missionaries and "love offerings" for guest speakers that will remain outside the limits of this article.)
So just enjoy the holidays. Let your personal gifts be personal gifts, and take pleasure only in the genuine response or the benefit enjoyed by the person who receives your gift. And while you're at it, make an extra contribution to your church as well. Rarely is there a church who cannot put that to good use.
No comments:
Post a Comment