Self Employment allowance
How can we break the circle. We figure out the Self Employment Tax for the priest. We give him an allowance for the entire amount. We add the entire amount to his Salary so he pays personal income tax on it.
BUT since it is part of his income it is included on his SE Schedule and therefore we are paying Self Employment tax on the Self Employment tax. Which means now we have more self employment tax to pay. Can someone break this circle. Thanks.