Parsonage Allowance

DEFINITION of 'Parsonage Allowance'

An allowance designated by a church or other organization for its church professionals (clergy) for the expenses of providing and maintaining a home.

BREAKING DOWN 'Parsonage Allowance'

This is basically a housing allowance for ministers. Parsonage allowance is excluded from gross income, but it is included under a self-employment tax.

RELATED TERMS
  1. Chaplain Malpractice Insurance

    Liability insurance that provides coverage for chaplains, priests, ...
  2. IRS Publication 525 - Taxable And ...

    A document published by the Internal Revenue Service (IRS) detailing ...
  3. Nonprofit Organization

    A business entity that is granted tax-exempt status by the Internal ...
  4. Endowment Fund

    An investment fund set up by an institution in which regular ...
  5. Niche Banks

    Banks that cater to and serve the needs of a certain demographic ...
  6. IRS Publication 517 - Social Security ...

    A document published by the Internal Revenue Service that details ...
Related Articles
  1. Investing

    Start A Religion: Scientology's Business Model

    Amid negative publicity, Scientology has used its auditing and consulting services, and its tax-exempt status, to make profits.
  2. Mutual Funds & ETFs

    A Guide To Faith-Based Investing

    If you've wondered how to invest in a way that reflects your religious belief, we've got the answers for you.
  3. Professionals

    403(b) Plans

    403(b) Plans
  4. Professionals

    457 Plan

    457 Plan
  5. Taxes

    What IRS Form 1023 Is Used For

    To be treated as a tax-exempt organization, start by filling out this form.
  6. Retirement

    403(b) Plan: Conclusion

    By Denise Appleby A 403(b) plan is a retirement plan for certain employees of public schools, certain ministers and employees of certain tax-exempt organizations. Let's recap: Individual ...
  7. Professionals

    Sample Questions 1 - 5

    Sample Questions 1 - 5
  8. Professionals

    Designations No Retirement Planner Should Be Without

    Advance your career and gain clientele by adding a few choice certifications.
  9. Professionals

    Self-Employment Tax

    Self-Employment Tax
  10. Retirement

    Explaining the 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers.
RELATED FAQS
  1. Can a church issue a bond?

    The North American Securities Administrators Association (NASAA) has acknowledged that "church bonds" are allowed to be issued ... Read Answer >>
  2. A church that a registered representative (RR) attends plans to raise the funds ...

    The correct answer is c) Although church bonds are normally considered to be exempt securities, the RR is obligated, by NASD ... Read Answer >>
  3. What is the difference in tax liability between gross income and other kinds of income?

    Find out how the U.S. government taxes worker's earnings, whether it is gross income or income exempted or excluded from ... Read Answer >>
  4. How old do I have to be to make catch-up contributions?

    Learn about the rules and limitations for catch-up contributions for common retirement plans, such as 401(k), 403(b), IRAs ... Read Answer >>
  5. What is the difference between gross income and taxable income?

    Understanding common tax terms including gross income and taxable income can help individuals navigate tax accounting in ... Read Answer >>
  6. What are the differences among gross income, adjusted gross income and modified adjusted ...

    Discover how calculating total taxable income is easier when gross income, adjusted gross income and modified adjusted gross ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center