Browsing Category Taxes

Members of the clergy are unique among American taxpayers in that they have the option to opt out of Social Security. There is a short amount of time at the beginning of a person’s ministerial career when they can request an exemption based on a conscientious objection.  The exemption, provided for on IRS Form 4361, is a lifetime exemption for all ministerial earnings. Many new ministers, however, don’t understand the true consequences of their decision and later regret it. I know, ...

As we’ve discussed previously, churches are not required to withhold taxes for pastors and other clergy. Because of a minister’s dual taxation status, the IRS expects them to pay as if they were self-employed.  How do self-employed people pay taxes? Through quarterly estimated tax payments. So, as a pastor, you’re required to make quarterly estimated tax payments. What Are Quarterly Estimated Tax Payments? Our American tax system is a pay-as-you-go system. Many people don’t realize this because they think they only pay once a ...

Paul McWilliams is a pastor’s kid turned financial advisor specializing in helping pastors and churches make wise financial decisions that align with their mission. On April 30, 2026, President Trump signed an Executive Order creating TrumpIRA.gov, a new federal platform set to launch January 1, 2027. The headline is genuinely good news for a lot of American workers: a streamlined way to compare low-cost IRAs, plus up to $1,000 per year in federal Saver's Match contributions for eligible lower- and middle-income ...

You were going to replace your fence, but then you didn't. You were going to buy that new sofa, but then you didn't. You were going to move to a more expensive place, but then you didn't. Life doesn't always go as planned, does it? While altering your plans can be annoying, it is more significant for pastors when it comes to housing expenses. At the beginning of the year, you have to carefully estimate your yearly housing expenses in ...

Clergy taxes are incredibly unique in a complex tax system, so it can be hard to find a tax preparer who actually understands how they work. I’m always getting requests for referrals, so I turned to my readers for help. These are the tax preparers that my readers have recommended. I have not personally worked with any of them and have done no research or due diligence, but they each have at least one happy pastor client. Bret Willoughby, CPA Yahr Income ...

This is an excerpt from my book, The Pastor’s Wallet Complete Guide to the Clergy Housing Allowance:  The church is not required to report the housing allowance to the IRS. Unless a church includes it in an informational section on Form W-2, the IRS and the Social Security Administration (SSA) are only made aware of the housing allowance when a minister files Schedule SE to pay Social Security taxes under SECA.  Form W-2 You should review your Form W-2 that you receive every ...

On July 4, President Trump signed into law the One Big Beautiful Bill Act (OBBBA). It’s an 870-page piece of legislation that contains some things that are relevant to your life, many things that aren’t, and a lot of language that would go right over your head.I have not read the bill, nor do I intend to. As a financial planner, I know who I trust in my industry, and some of them are happy to read long legislation and ...

Your 2024 taxes are due tomorrow. That means an envelope with your check has to be postmarked by midnight on April 15, 2025. Or you’re late.  What if you owe money you don’t have? Maybe you calculated things poorly. Or you didn’t realize you were supposed to be paying quarterly self-employment taxes. You owe, but there isn’t enough in your bank account to pay the bill. What do you do? File Your Return Anyway First of all, FILE YOUR TAX RETURN ANYWAY. Yes, ...

This is a guest post by Nate Skelly, CERTIFIED FINANCIAL PLANNER™ professional and founder of Financial Pathway. He is passionate about providing financial education from a biblical worldview. Nate lives in the Tampa, FL, area with his wife, Charity, and their three kids: Jaden, Judah, and Juliet.You know what they say about things that sound too good to be... they usually are! But let me assure you, if you're a licensed, ordained, or commissioned minister, this article is worth 10 ...

Keep your mortgage so you don’t lose your housing allowance and mortgage interest deduction! How many times have you heard that advice? A reader recently asked me about it. Is that really good advice? I know for most people, keeping a mortgage just for the mortgage interest deduction doesn’t make financial sense (though a lot of people do it). But you pastors have an amazing benefit in the ministerial housing allowance. It made me wonder, could the housing allowance be enough to ...