When it comes to maximizing the housing allowance designation, pastors have lots of options! However, none of that matters if you cannot substantiate your housing related expenses at tax time. What is the best way to track your housing allowance expenses so that filing your taxes is as simple and fast as possible?
The easiest way is with a paper file. Each year, in January, I create a file in my file drawer for that specific year's taxes. Every time I get any receipt, invoice, or statement that I can use for my housing allowance, I put that documentation in the tax file. I can then forget it until it's time to file my taxes the following year. I know that everything I will need will be in that file, and I will not have to spend any time searching/looking for receipts or statements to verify my housing allowance claim.
It doesn't get any easier than that.