First, you need to consult with your tax preparer ahead of time to be certain you know what to have ready at tax time. Asking questions about your particular situation is vital so that you and the tax preparer are “on the same page.”
Then gather and organize your records in a neat and readable format. Many tax preparer offices send out a tax organizer to assist in the recording of the tax information. Use this if you have one and ask your preparer questions about the organizer if you don’t understand it. Don’t take a paper bag full of receipts and documents and drop them off at your tax preparer’s desk and expect a quick response on your tax return. The more organized you are, the better your preparer can handle your tax matters.
Be sure you and your preparer understand the “housing allowance” benefit. This, for ministers, is one of the best tax benefits available today. You only have to pay self-employment taxes on the housing but no income taxes. This must be designated by the church or board prior to utilizing it, so be sure this is in order and provide that information to your preparer, separate from your salary, etc.
Have your W-2 from the church ready ahead of time. Many ministers let the tax preparer do the W-2 when they file their taxes; however, for 2016, there are new penalties if these W-2 forms are not prepared and submitted by the January 31 deadline. In the future, don’t wait until you file your tax return to have the W-2 prepared.
In summary, two things need to be done to ensure the best possible tax results. One, communicate with your tax preparer. Even call or e-mail prior to tax season and ask questions. Communication is vital. Secondly, be organized. Make sure you have everything ready and organized when you get your taxes done. The better organized you are, the better your preparer can organize your return efficiently and more productively.