Taxes
Clergy are considered dual-status taxpayers for their ministerial income, meaning they pay income taxes as employees and Social Security and Medicare taxes as if they were self-employed.
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Related Blog Posts
How Pastors Can Avoid Paying Social Security Taxes Without Opting Out
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…
Video: Q&A: Is a Car Payment Taxable Income for a Pastor?
In today’s video, Amy answers a question from a Pastor’s Wallet reader whose church wants to help him purchase a car and he’s wondering if that is considered taxable income.
Making Sense of the Advanced Child Tax Credit Payments
If you have kids, there’s a good chance that you received some money from the IRS in the last couple of days. It is a part of the American Rescue Plan legislation that was passed in March, an advanced payment…
The Different Kinds Of Income A Pastor Can Have & How The IRS Treats Them
This post breaks down all of the major types of income a pastor can earn and explains how the IRS treats them for Social Security, income tax, retirement plan and payroll tax purposes. It is based on IRS Publication 517.
Are Pastors Eligible for the Home Office Tax Deduction?
Like many all over the globe, pastors did a lot of work from home last year. Whether you already had a dedicated space or had to claim a corner of the dining room table, last year was the year of…
How Everyone Can Deduct Charitable Contributions In 2020 & 2021
A lot is said about the tax-deductibility of charitable contributions. After all, that is why your church went through the trouble of gaining 501(c)(3) status with the IRS. So that donors could get tax breaks. Not everyone gets a tax…
How Pastors Can Claim The Earned Income Tax Credit
Every year, the federal government hands out money for free. However, one out of five people who are eligible doesn’t claim it. That sounds crazy, right? Who foregoes free money? And how can you be eligible to get it? For…
How Will A Biden Presidency Affect Taxes For Pastors?
Whether or not you believe that Joe Biden won the election, let’s set aside politics and talk about taxes. Because there’s no way I’m going to go there. I don’t care who you voted for or who you think will…
Are You Wasting Money Without A Health Savings Account?
Despite being a hot topic over the last couple of decades, the cost of health care is still a major problem for American families. Healthcare costs tripled between 2001 and 2016, and the average non-elderly family now pays $8,200, or…
How Can A Church Reverse Its FICA Exemption?
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,…
How The Coronavirus Payroll Tax Deferral Affects Pastors
With our current economic crisis brought on by the coronavirus, Congress and the President have been taking action to relieve some of the burdens for taxpayers and businesses. One area where they are providing a break is payroll taxes, the…
Q & A: Reader Questions About 2019 Clergy Taxes
Tax Deductible Expenses Q: Are my vestments tax deductible? A: Since the passage of the 2017 Tax Cuts & Jobs Act, unreimbursed business expenses are no longer tax-deductible. That would include your vestments. The only way to avoid paying taxes…