How to report social security allowance
When completing a W-2 for an ordained pastor who receives a salary and an additional allowance for Social Security and Medicare taxes (often referred to as a SECA allowance), the salary and the SECA allowance should be included in Box 1. Here are the steps to do so: Box 1 – Wages, Tips, and Other…
What is the differenced between 4361 and 4029 form?
Both forms are used to apply for exemptions, but they cater to different groups and purposes: IRS Form 4361 is used by ministers, members of religious orders, and Christian Science practitioners to apply for an exemption from the self-employment tax on their ministerial earnings. This exemption does not directly focus on Social Security and Medicare…
W-4 Instructions for Clergy
The W-4 form consists of five steps. Since not every step applies to all employees, some sections may justifiably be left blank. Step 1 Clergy and non-clergy individuals must provide personal information, ensuring that the name, address, and Social Security number entered match the records on file with Payroll. This section also requires you to…
IRS guidelines on designating a housing allowance
The IRS guidelines on designating a housing allowance for clergy are detailed and specific. Here is a comprehensive overview: Designation of Housing Allowance Advance Designation Requirement: The housing allowance must be officially designated in advance of payment by the employing church or other qualified organization. This designation can be made in an employment contract, in…
Can I deduct ministry related meals?
Meals related to ministry activities can be deducted for tax purposes under certain conditions. The relevant IRS guidelines and criteria for deducting such expenses, including specific requirements or limitations that apply to clergy or ministers, are as follows: Ordinary and Necessary Business Expenses: Under § 162(a) of the Internal Revenue Code, ordinary and necessary expenses paid or…
History of dual status for clergy
History and development of dual status for clergy members: Early 20th Century Pre-1954: Initially, clergy were generally treated as employees of their religious institutions. However, this treatment didn’t fully address the unique nature of their ministerial income and work arrangements. Introduction of SECA (1954) 1954: The Self-Employment Contributions Act (SECA) was introduced, making it mandatory…
Searching For A New Clergy Tax Advisor?
Selecting a tax advisor or accounting firm may initially appear straightforward. However, it’s important to understand the two types of professional services available in our industry. The first type is a “Generalist”, which prepares various tax returns for the general public. These providers may have limited experience with clergy returns, if any. As a result,…
Easy W-2 and 1099 Filing for Churches
Simplify Your Church’s Tax Filing with Clergy Financial Resources Clergy Financial Resources provides an effortless online e-filing solution, whether your church is big or small. Our intuitive service supports W-2 and 1099 form submissions, making the process simple, cost-effective, efficient, and secure. Hassle-Free Filing No Software Required: Your information is securely saved, making each year’s…
2025 Standard Mileage Rates
The standard mileage rate for transportation or travel expenses for 2025 is 70 cents per mile, up from 67 cents in 2024 for all miles related to your ministry or business. The standard mileage rate for charitable use is 14 cents per mile. The standard mileage rate for medical care or as part of a…
Charitable Contribution Substantiation Guidelines
To substantiate charitable contributions, taxpayers must adhere to specific requirements based on the type and amount of the contribution. Here are the detailed substantiation requirements: General Requirements for All Contributions Cash Contributions: Cancelled Check: A cancelled check can serve as proof. Receipt from Donee: A receipt showing the name of the donee, the date, and…
