Health insurance premiums

[Rmiravete]

Hello, I have a bit of information to share that will lead up to my question. First off, starting June 1st my husband will become a full time pastor. He will be receiving a salary of 36,000 a year, a housing allowance of 14,000 a year, health insurance 5,000 a year (we have to find our own insurance and the church will pay us back the monthly premium. The 5,000 will be split into monthly payments, that being said since we will receive it as a check to reimburse us for that month’s premium, can we deduct the premium expenses on our taxes. The accountant I spoke with said it’s considered taxable income since they could give us that money and we could spend it on whatever and the church would never know (her example of why it’s taxable). Since it’s would be included in the 36,000 salary (36,000 salary + 5,000 insurance premiums = 41,000 taxable income) can we deduct it or not?

[Bsch4477]

The $5,000 is taxable income. If you use it for health insurance premiums you can deduct it as a medical expense if you itemize. You can only deduct a total amount of medical expenses greater than 7.5 percent of your AGI. 

[Rmiravete]

I read on another accounting website that since he’s considered a “self employed minister” that he can deduct 100% of the insurance premiums. So does that mean we don’t have to itemize it then? Or is it all the same? Sorry I’m new to all of this…. We’ve always had W2’s and insurance was paid by employers.

[Bsch4477]

You posted that he gets a salary and if so, he is not self employed.  Does he get a 1099-NEC or a W-2?

Clergy have special rules for treatment of taxes. See this IRS publication. 

https://www.irs.gov/taxtopics/tc417#:~:text=Regardless%20of%20whether%20you're,are%20subject%20to%20....