How should a small church (tithes and offerings less than $75000 annually) handle and report monetary gifts to its pastor and immediate family?
The pastor is a non-employee but he receives a monthly household allowance.
1Comments
Taxable Income
VVickey
First of all, I would be concerned about classifying a Pastor as a non employee.
A Pastor is usually classified as an employee of the church for income tax purposes and self-employed for Social Security.
With that special dual status, their compensation is usually reported on a W-2 not a 1099.
However, no matter how you classify them, love offerings (gifts) are considered taxable compensation by the IRS.
You would NOT report the housing allowance on a 1099, but you would report the "gifts" given to the Pastor from the church.
A Pastor is usually classified as an employee of the church for income tax purposes and self-employed for Social Security.
With that special dual status, their compensation is usually reported on a W-2 not a 1099.
However, no matter how you classify them, love offerings (gifts) are considered taxable compensation by the IRS.
You would NOT report the housing allowance on a 1099, but you would report the "gifts" given to the Pastor from the church.