Ministers Taxes

Ministers taxes are unique! Because of this uniqueness not all churches understand how to compensate their ministers correctly or how to handle their tax withholding.  

This page was designed to help church administrators fully understand a minister's tax status and  compensate them accordingly. 

Ministers Taxes Guidelines...

Ministers have "dual status". Most are considered employees of their churches for income tax reporting purposes and all are considered self-employed for Social Security purposes.

Because of this special tax treatment it is imperative that church administrators know the IRS's tax laws regarding clergy or ministers taxes.

Such as the fact that a church can withhold income tax (at the minister requests), but not Social Security and Medicare tax.

A minister pays the Social Security and Medicare tax himself under the SECA system. He can pay this tax by making quarterly estimated tax payments, or by requesting the church to hold out extra income tax.

Ministers can also "opt out" of paying in Social Security...if certain conditions are met.

Ministers are also usually eligible for a housing allowance which can be a great tax benefit for ministers...if set up and maintained properly.

There are even situations where it is not only allowable but beneficial for the church to designate 100% of a minister's compensation as a housing allowance. 

Learn all this and more regarding ministers taxes by reading the articles below...

Learn more...