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I have a ministry that operates out of my home. Its called"

I have a ministry...

I have a ministry that operates out of my home. Its called" Sew-2-Sow" Can I use anything as a tax deduction?

Accountant's Assistant: The Accountant will know how to help. Please tell me more, so we can help you best.

The ministry is made up of a group of ladies that makes dresses with a pocket. We put a pair of underpants and a bracelets into each dress pocket. The dresses are given to missionaries who take them into villages or places were girls are in need. For example, some of our dress were given to a fireman and sent to the south to help the recent hurricane victims .

Accountant's Assistant: Is there anything else the Accountant should be aware of?

Some of our dresses go to third world countries or countries where there is a need due to poverty. Some countries if a girl has a dress, they can attend school or church. All of our ladies volunteer their time and they sewing machines, surgers, material and all of our supplies are stored in my basement which is a two bedroom apartment that we made into a sewing place. We store all our ribbon, lace, thread, material, scissors. We have a cutting table, a surger table and machines lined up on tables in the biggest part of the living room. Does that help?

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Answered in 14 minutes by:
3/6/2018
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,014
Experience: 35 years tax experience, including four years at a Big 4 firm.
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Hi from Just Answer. I'm PDtax, and can assist.

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Yours is not a formal charitable organization. You didn't say anything about the business side of a charity. It sounds like you are looking to claim some of your utility bills and costs of the charity room or rooms against your home income from other work. You do not report being a member of clergy, or services.

I'll have to look at the level of your work first, and I think it requires some research.

I can post an offer for that research.

PDtax

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Customer reply replied 1 month ago
What do you mean a formal charitable organization? What do you need to know about the business side of the ministry. Us ladies do the business. I have heard that I should be able to claim part of my mortgage, utilities, etc. possible property tax and insurance. I don't know. That's what I heard so I am asking the IRS. Can I deduct these things?
Customer reply replied 1 month ago
No, I live off of disability and cannot afford to pay 52.00 to find out the answer to this question. I will pay the 5.00 and talk on here.

I don't believe you can. But you are doing a good thing, but that may not ride to the level of charitable deduction. You aren't running a church or ministry.

I would need to research the question. I'll opt out, and other experts can review.

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Customer reply replied 1 month ago
we are running a ministry called "Sew-2-Sow"

Hi again. PDtax here. I was prompted to follow up with you.

I did not argue with you the notion that you are operating a ministry. The problem is IRS does not recognize informal ministries (they require 501(c)(3) or similar paperwork. Also, donating space in your home and claiming the utilities and related costs, mileage, feeding your volunteers, may not qualify for deduction. I suggested researching the issue, but the cost may be more than you want to spend.

It's a law issue, but specific to your facts. Please advise if you want my help, for an addit5ional charge, or if you wish to wait for other experts to review your request.

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Customer reply replied 1 month ago
The church the ministry is under is not a 501 c because they are an old church and they were grandfathered in but they are a nonprofit. They are able to give receipts for cash tithes made to the church.

then you might be able to use some of your expenses as deductions. I'm sorry that I can't give a complete answer without researching the issue, but what you are doing, for example, is not a cash tithe but instead donating goods and services, and use of your home, to assist your church, neither of which are typical 501(c)(3) entities.

I can research this, but you did not want that service earlier. Please confirm you are willing to pay for the research I would need to do to answer you, and I will assist.

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Customer reply replied 1 month ago
My card was already charged once for my question to be answered. Why again?
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,048
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
Verified

Hi! Different expert here.

Churches are tax-exempt entities without any extra IRS rulings. Churches (including integrated auxiliaries and conventions or associations of churches) that meet the requirements of section 501(c)(3) of the Internal Revenue Code are automatically considered tax exempt and are not required to apply for and obtain recognition of exempt status from the IRS. So as long as you are a church ministry, you are already tax-exempt.

As far as contributions to the church, you are allowed to deduct anything that you spend on behalf of the church. It is considered a charitable contribution. That could include a portion of your home ONLY IF YOU USE IT REGULARLY and EXCLUSIVELY for church business. So if you have a room that you ONLY use for church business, than you can allocate part of your mortgage interest, real estate tax, maintenance, repairs, utilities, insurance, etc., and deduct the part that is allocated.

However, if you have the ladies come over and sit in the living room where you do your work, you cannot take any deduction, as the room is not used exclusively for the charitable purpose.

I hope this has answered your question. If you have any more, please feel free to ask and I will be happy to answer.

Thanks! Have a great week!

Roger

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Did you have any more questions?

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I have not heard back from you. Your activities do qualify as a charitable activity as part of a church.

Do you have any more questions that I may help you with?

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Customer reply replied 1 month ago
How much would you charge to do my taxes with deductions for this ministry. I have a friend who is a CAP who has done my taxes for years but she does not know about deductions foe a ministry in my home.
Customer reply replied 1 month ago
C P A......sorry for typo
What are the rest of your items of income and deduction? I'm guessing you have mortgage interest real estate taxes maybe a W-2 or pension? Interest? Dividends? Capital gains?All those items effect how much it costs to do a tax return.
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Customer reply replied 1 month ago
I have income of two disability checks, one from OPERS and a small one from Social Security, plus some part time work that I am allowed to do. I am a nanny. All except one babysitting job I was hired by families so I have 3 W-2's. I have some job hunting expenses i think i can deduct like background checks, job interviews millage.
On my home I have a mortgage, taxes and insurance. I have some investments in LPL financial and a few small bank It's a. I have Medical expenses which are usuallt under the standard drduction amont do ive only been able to use my Medical Expenses one year, a year i had to travel out of state to a hospital.
Customer reply replied 1 month ago
I am trying to figure out if I am better just to have my friend who is a C P A do my taxes for free without trying to get any deductions from the ministry in my home
OR
Is it beneficial to me to pay someone who understands the ministry deductions I can get and would I get back more to use these deductions legally.

I can tell you based on what you said that the fee from H&R Bock, Jackson, Liberty, etc., would be $300 - $400. My fee would be around $300.

Since you can already deduct your mortgage interest and real estate taxes in full, the only additional expenses that you could deduct would be the business portion of your homeowner's insurance, repairs, and maintenance and utilities on your home. If your insurance is $1200, your utilities are $2500 (both standard based on what I usually see) and your maintenance is another $1000, you are looking at the business portion of $3700. If your charitable use is 10% of the house (probably high) that is $370 of additional deduction. That would save you about $90 of tax.

Your tax savings would be less than the cost of the tax prep fee.

Just ask your friend to take the portion of the house, as I just did, and have her add it to your charitable contributions. That will give you the same answer.

I would love to get the extra cash by doing your return, but I don't like taking business if I can't help more than my fee.

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Customer reply replied 1 month ago
Thank you so much for your honesty. That is a rare thing now a days.

You are more than welcome. Hopefully your friend can prepare your return. If she has questions, feel free to come back out here and ask for me.

And please don't forget to rate me, as that is how questions are closed.

Thanks!

taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,048
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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