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 You're here » Christian Finance Index » Other Resources » Finding God's Plan For Your Income Taxes

Finding God's Plan For Your Income Taxes

HAVE YOU THOUGHT about your income taxes for the coming year? Perhaps you're expecting a refund, and you've already filed. Or maybe you'll be in line at the Post Office before the stroke of midnight on April 15. Maybe you automatically file for an extension to put off the pain just a bit longer.

Ever think about the spiritual aspect of paying your taxes? That's right, paying taxes is a spiritual matter. It's a matter of obeying our nation's tax laws and God's laws that require us to be responsible and scrupulous in all our financial dealings.

My Story

When I decided to make Jesus the Lord of my life in 1976, I had no idea that He was interested in my income tax return. At the time I was practicing law as a solo practitioner, so there was no institutional accountability for my income. I collected my own legal fees. I paid my own expenses. And I spent or saved what was left. My plan, of course, was to set aside a portion of my income each month to pay my income taxes, but that didn't always work the way it should have. If there was more month than money, I would just skip my tax withholding for that month, thinking I would catch up the next month. Well, sometimes I caught up and sometimes I didn't.

In 1976 there were many more months than money, and by the time April 15, 1977 rolled around, I was in deep trouble. It was not unusual for me to be behind, but this year I was way behind. I knew I owed more than I had-a lot more. Since I didn't have the money I thought I'd need, I asked my CPA to request an extension for filing my return. By June 15, I still didn't have the money, so he requested another extension. Finally September 15th rolled around, and I couldn't request any more extensions. I had to file my return.

In those days I would gather my financial records together in a semi-organized fashion and take the bundle to my CPA's office. He would then ask me a series of questions about deductions, such as what percentage of my home I had used for business that year, how much of my total mileage was business-related, how many dependents I wanted to claim, etc.

In years past, I would claim whatever my CPA believed the IRS would accept without raising a question, whether I was actually entitled to the deduction or not. Gray areas were always decided in my favor. I didn't intend to do anything illegal-I just always gave myself the benefit of every doubt-even when the facts wouldn't support my position.

But this year was different. I gave my CPA a much lower number for business-related auto mileage. I took no deduction for a home office, because even though I had a room set aside and equipped, I didn't really do business from home. My CPA suggested I reconsider. But I explained to him that my approach to life was different now. I had become a Christian, and I wanted to do my taxes God's way. What I didn't tell him was that I had no money to pay my taxes. And with each answer, I was increasing my liability.

I'm sure my CPA thought I had taken leave of my senses, but He didn't try to dissuade me. I knew that each decision I was making would cost me that much more money-money I didn't have-but I knew I had to begin to trust God with my finances. This was a major test!

When we finished, my CPA ran some quick rough calculations so I'd know how much I'd need to borrow to file my return. He completed his calculations, turned to me with a hesitant look on his face, and then informed me that I would receive a $500 refund! I could not believe my ears! I had suffered severe anxiety for six months. I didn't know where I was going to get the money I knew I owed. Yet because of my faithfulness to honor God, God had not only dealt with the shortfall, but given me a $500 windfall!

Never again have I been tempted to cut corners on my income tax return. In fact, income tax time has become a time of real joy. I can support every figure on my return, and I don't worry about having the money to pay the taxes.

Tax Tips

You can reach this point yourself through a commitment to obedience and some simple organization. First, on the income side, account for all monies you receive during the year. Your record keeping can be as simple as listing each deposit by source, date and purpose. Run all money you receive through your personal checking account. Pat and I find it helpful to have columns to separate salaries from reimbursements, such as hospitalization insurance refunds, and cash gifts we receive from relatives and friends.

Second, on the expense side, note in your checkbook what each check was written for. Don't write a check for more than the amount of purchase. If you need cash, write a separate check. If you use automatic tellers or debit cards, be sure to enter those transactions in your checkbook.

Third, you need a system to track your cash spending. You need to know how much cash you start out with every day, and account for everything you spend during the day-every day.

As part of discovering God's plan for your income taxes, I encourage you to work with a Christian CPA or certified tax preparer. With complex tax laws, it's increasingly important to have access to a professional who can answer your questions, if not actually prepare your return.

Tell him or her that you want a tax return consistent with the tax code and your conscience. Explain that you're not interested in cutting corners, although you certainly want to be able to take advantage of any legitimate deduction.

If you prepare your own return, consider having a professional review it for you. Often someone more familiar with the tax code can offer suggestions to save you tax dollars that more than equal his or her fee.

What about paying taxes if you don't agree with how the tax dollars are being spent, such as in support of abortion or public education or something else you believe is inconsistent with Biblical values? From God's perspective, the solution lies in changing the law, not in disobeying it. Christians in this country can elect representatives who reflect their values, and I think that's a much more constructive approach. The bottom line is obedience, and I don't think that cheating on our taxes, or willfully disobeying the tax laws, is consistent with obedience to God.

I encourage you as April 15 rolls around to obey our tax laws and honor God through your tax return. Then you'll be ready to receive His blessing.

- by Ken Smith

© 2001 by Christian Stewardship Ministries. Reprinted from Glad Tithings newsletter, Fairfax, Virginia. Used with permission.

For further reading:

Strategic Business Concerns: Learning How to Anticipate the Unexpected
       A checklist to arm and inform you on a wide host of tax, operational and financial issues you will want to come back to again and again.
Atlanta CPA Teaches Business, Church and Ministry Financing
       Perhaps the most important first step is the development of a Business Plan to help you along the way to ensure that your plans are achieved.
Funeral Planning
       People grapple with many questions as they arrange or pre-arranging funerals for loved ones. What are your rights and options?
Ready for the Future
       Most of our greatest fears will never come to pass! Yet we spend our time speculating on what might happen and how we will deal with it when it does.
God's Way of Finding a Job
       If you find yourself in the job market, remember that God has planned a particular job for you. He designed it for you before the beginning of time.
Making a Will
       Although wills are easy to create, about half of Americans die without one. By making a will you decide what happens to your property after your death.
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