New law eliminates popular tax deduction for pastors

Pastors who formerly deducted out-of-pocket business expenses on their taxes can no longer do do so under a new law.

The Tax Cuts and Jobs Act of 2017 lowered the tax rates for all individuals but it also eliminated the tax deduction for unreimbursed business expenses—such as for restaurant meals, conference curriculum and office supplies that are not reimbursed, said Bryan Baughman of PSK CPA.

The change took place in 2018, which means pastors cannot make the deduction on this year’s tax returns. The law impacted everyone: non-profits such as churches and for-profit business, too.

“You can still get reimbursed by the church, tax-free, but you can no longer deduct those on your own return if you don’t get reimbursed,” Baughman told the TEXAN.