10 Things Churches and Ministers Need to Know about the New Tax Bill

Church Finance Basics

On December 22, 2017, President Trump signed into law the 1,100-page Tax Cuts and Jobs Act. This piece of legislation resulted in significant changes in U.S. tax law, many of which affect churches and ministers. In a recent video, Dr. Richard Hammar discussed some of the changes to the tax law and their implications. Below are his top three things you need to know about the new tax bill.

1. Prohibition of Church Political Campaign Activity
The first version of the bill provided that a church would not lose its exempt status because of any statement made in the course of the church’s regular activities. However, this provision did not end up in the final version of the law, so churches are still prohibited from participating in political campaign activity.

2. Increase in the Standard Deduction
Both married and single taxpayers will see a substantial increase in their standard deduction as a result of the Tax Cuts and Jobs Act. The deduction for married couples will increase from approximately $13,000 to $24,000, while single taxpayers will see their standard deduction increase from $6,500 to $12,000.

3. Qualified Tuition Reduction Exclusion
Many churches operate schools and may offer tuition discounts to employees. In the past, these reductions have not been taxable, as long as certain conditions are met. Originally, the new law was going to repeal this tax benefit, but the tuition reduction exclusion was not repealed in the final version.

Click here to watch Dr. Richard Hammar’s video on the Tax Cuts and Jobs Act, in which he discusses the top 10 major changes in the bill and their implications.

This information is not legal or tax advice. Information is from sources deemed reliable. Information is subject to error, omission, withdrawal, or change. Contact your own legal or tax advisor before taking any action that would have a legal or tax consequence.

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