FT Pastor with approved 4361. Still needs to pay SE taxes on secular work?

by Kori

My husband is a full time pastor and has been for years. He also has an approved form 4361 exemption from SE taxes for his work performed as a minister.

However, part-time he is a realtor and this year, 2016, he made a 10k profit on his real estate business.

I was under the impression that although he was exempt from SE taxes for his ministerial salary, he would still have to pay SE taxes for his secular real estate sales.

However, the online tax software I am using completely exempts him on Line 57 on the 1040, and the Schedule SE is not even included with the schedule C for his real estate business.

I feel this is in error, but I need advise to know if maybe I have completely misunderstood the tax law about the exemption of the 4361 exempting him from any SE taxes whether the work is ministerial or secular.

Comments for FT Pastor with approved 4361. Still needs to pay SE taxes on secular work?

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Feb 23, 2017
Form 4361 - Good news and bad news
by: Bill OConnell

The good news is your understanding is correct.

The bad news is you owe the tax.

Please consider using an experienced CPA tax preparer like my firm Wisdom over Wealth. We service only churches and clergy and are experienced in these matters.

Call us at 617-921-9321

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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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