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?
[Video] Q&A: Do Pastors Really Have to Pay 15.3% for SECA?
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?
How do you really know the amount of taxes or actually SSI do you pay on a pastor salary and housing allowance. Is it just a straight up 15.3% or is there an equation for?
Susan, if you look at Schedule SE, they have you calculate 92.35% of your income before applying the 15.3%. Based on that, it actually comes out to closer to 14.13% of income. Schedule SE: https://www.irs.gov/pub/irs-pdf/f1040sse.pdf
If there’s no W-2 or 1099 issued what should a pastor do?
I believe the only reason you wouldn’t get one of those forms would be if your entire income was designated as housing allowance. In that case, the church is still required to report your housing allowance amount to you, they just have more options and can do so in a letter instead of an official IRS form.