Social Security Tax Paid by the Church
Social security benefits are financed through two tax systems. Employers and employees each pay the “FICA” tax, which for 2007 amounts to 7.65% of an employee’s taxable wages (a total tax of 15.3%). Self-employed persons pay the “self-employment tax,” which for 2007 is 15.3% of net self-employment earnings. Clergy are always considered to be self-employed…
Clergy Voluntary Withholding Agreements
Ministers can arrange to have income taxes (but not social security taxes) withheld from their compensation by means of voluntary withholding agreements with their employers. If the employer agrees to such an arrangement, the minister must furnish the church with a Form W-4, and the church will then withhold on the basis of the standard…
Health Care Reform Legislation Requires the W-2’s Show Value of Health Coverage
UPDATE 10/21/10: The IRS has announced that the health care reporting requirement will be optional in 2011 and mandatory in 2012. From the IRS “to provide employers the time they need to make changes to their payroll systems or procedures in preparation for compliance with this requirement, the IRS will defer the reporting requirement for…
Prepare for Your Church’s 2011 Budget
In today’s economy, setting up a church budget can be a challenging task. The 2010-2011 Compensation Handbook will help make sure your church staff will be fairly compensated.
Clergy Housing Allowance: Principal Residence
In the case of a taxpayer using more than one property as a residence, whether property is used by the taxpayer as the taxpayer’s principal residence depends upon all the facts and circumstances. If a taxpayer alternates between 2 properties, using each as a residence for successive periods of time, the property that the taxpayer…
Steps to Finding the Right Clergy Tax Professional
Six tips to help taxpayers find the right clergy tax professional.
Clergy Chartible Contributions FAQ’s
We are always encouraging people to volunteer their time to help their church or other nonprofit organizations. Shouldn’t people who do volunteer work be provided with a tax deduction to compensate them for their donation of time?
Clergy Commuting Expenses
You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or driving a car between your home and your main or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your regular place of work. You cannot deduct commuting expenses even if you work during the commuting trip.
Clergy Love Gifts
Are “love offerings” to clergy always taxable income?
Accountable Reimbursement Plans Are Often Misunderstood By Church Administrators
Accountable Reimbursement Plans Your church should establish an accountable reimbursement policy. Clergy are allowed to exclude all reimbursed expenses from their reportable income. The church reimbursement policy should include the following, but not limited to: office supplies, religious material, subscriptions and paperbacks, meals, entertainment, seminars, dues and memberships, library, educational expenses, camps, legal and professional…
