Ep 47 ~ Tax Issues for Ministers

Dual tax status = EE for income tax purposes, but considered SE for
FICA tax purposes Minister should make ETP throughout the year to
help pay for the SE taxes that will be due on their income to avoid
underpayment penalties if they owe over $1,000 tax liability EE vs
IC     IRS link   Publication 1779
download HA is exempt from Federal Income Tax, but IS subject to
SECA and has limitations on the amount that can be designated
Business expenses must be allocated between taxable and nontaxable
income (calculated on the 3 Clergy worksheets on the ministers tax
return) Special rules apply to retired ministers who receive any of
their retirement benefits as HA  Form 4361 explanation (filed
within first 2 years of earning minister earnings of $400 or more)
- NON revocable Due to TCJA until 2025 the Misc. Itemized deduction
subject to 2% AGI limitation is not allowed. However, if the
minister has unreimbursed job expenses, he can subtract them from
SE earnings on Worksheet 3 of the Clergy Worksheets in the
minister's 1040 tax return Gifts given to active ministers may
actually be compensation for services rendered and therefore
included as taxable income.

I hope this information is helpful to you.
xo, Michelle Next Steps: Grab Your Freebies:

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