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…
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?…
Because a pastor’s opportunity to opt out of Social Security is so unique, many Social Security employees don’t understand the law surrounding it. Unfortunately, this results in pastors being denied benefits that are rightfully theirs. This is what you can…
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…
Pastors who save into their church’s retirement plan are eligible to withdraw some of that money as a tax-free housing allowance in retirement. It’s a great benefit to have. Unfortunately, a lot of church retirement plans have investments with higher…
As you probably know if you read this blog (or can find out here), pastors have to pay both the employee and employer portions of Social Security and Medicare taxes as if they were self-employed. Those Social Security and Medicare…
Tax season has just come to an end and most of us are either eagerly awaiting a return or bemoaning how much we had to pay. The rest of you filed an extension and are still trying to get your…
Pastors are dual-status taxpayers who pay Social Security and Medicare taxes as if self-employed. But do you really have to pay the full 15.3% or is there a waiver available for clergy?
If you are a church employee, you may have to file Schedule SE (even though you’re not self-employed) and pay double payroll taxes. This is why.
Can churches pay Social Security taxes for their pastor? What if the employment agreement says they will?
You didn’t opt out of Social Security because it doesn’t violate your conscience. But that doesn’t mean you like paying the tax. There are probably a lot of things you would rather do with that money. Do you have any…
Several months ago, I got an email that had me stumped. The writer was from a church that was exempt from paying FICA (payroll) taxes but wanted to start paying them. Since I was unsure how to answer the question,…