Approved 4361 exempt from paying all income taxes?

by Vickie

Does an approved 4361 mean that a minister pays no income taxes at all? If so, is there any reason to designate a housing allowance?

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Jun 22, 2015
Housing/Parsonage Allowance
by: Pstr. R Rizzi, Farmington, NH

An approved 4361 only means the pastor becomes exempt from paying into social security but will still pay income tax.

The Housing or Parsonage allowance is an amount designated out of the pastor's salary that becomes non-taxable income when it is used for the upkeep on the parsonage.

He can buy things pertaining to maintenance as well as decor, etc.

I recommend seeking the counsel of the CPA who is born again and has extensive experience in dealing with clergy tax otherwise you will not get the right counsel.


Jun 22, 2015
Exempt from paying all income taxes?
by: Lewis in NC

No way!--only Self-Employment Taxes, i.e. . . .Security Taxes. Be careful though; you will lose all the potential benefits later in life of those taxes as well.

Jun 23, 2015
by: Anonymous

That is, exempt from all income tax on income earned as a minister. I know they must pay on income earned by other means.

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Join in and write your own page! It's easy to do. How? Simply click here to return to Housing Allowance.

If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)

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