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Four Tax items every Pastor should check BEFORE the end of the year.

Tax Savings Tips for Pastors, Ministers and other Clergy
1.Clergy Housing Allowance:

Did you use all of your clergy housing allowance for housing expenses,
and do you have the documentation to show it?

2. Professional Ministry Expenses:

Have you documented all your professional ministry expenses?
or, if you have an accountable plan,
have you turned in all your receipts to the church for reimbursement?

3. Quarterly Estimated Tax Payments:

Did you make your quarterly estimated tax payments?
April 15?
June 15?
September 15?
and are you ready for your January 15, 2014 payment?

Some states have December 31, 2013 as… Continue reading

Questions regarding Tax form 4361

Hi, I came across your website while searching questions regarding form 4361. I have a question about section 4 and 5. I am ordained through 1 organization and employed for another. And section 5, I was ordained 1-13-2010 and never really took an income from my church until where I currently work now starting in 2013 so I can’t put 2 years down for the $400 + income. Will that cause a decline in my request for Social Security exemption?

Rev. Jason
Administration/Youth Pastor
Celebration First Assembly of God
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Hi Jason:

Thanks for the email! From what you’ve told… Continue reading

Ordained Minister Tax Advantages and Benefits

As an ordained minister you may be eligible for a number of tax advantages that you may not be aware of and that are not available to people outside of the ministry. Minister tax benefits were originally instituted to help clergymen as they were originally paid quite poorly.  Ministers that are ordained have the option of taking a number of tax deductions and opting out of payments that others are expected to make as long as certain IRS qualifications are met. Here are several such minister tax benefits.

Exempt from Self-Employment Taxes

When income is received from a church,… Continue reading

Recommendations for Year-End Tax Preparation

The leaves are falling, the temperatures are dropping and the holidays are just around the corner. This means that the year is quickly winding down which also means it’s time to start thinking about 2012 taxes. Early tax preparation is the key to a seamless and stress-free tax season. Clergymen can especially benefit from early tax preparation as their taxes often need to be approved by a tax professional to ensure that they are accurate.

According to a blog post on clergytaxnet.com, there are several tax-related things that clergymen need to consider and possibly apply before the end of the… Continue reading

Tax Preparation for Missionaries

Serving God and spreading the Good News often requires going outside of your comfort zone and even overseas in order to spread the Word. If God is leading you to teach the masses as a missionary, it’s necessary to consider everything that being a missionary entails which also includes proper tax preparation.

According to IRS Tax services, missionaries fall under the definition of ministers. Ministers and missionaries both are people that are considered ordained by a licensed religious group to conduct religious worship, administer ordinances and follow a church’s prescribed system of beliefs. Therefore a missionary is responsible for filling… Continue reading

2012 Taxes: A List of Miscellaneous Pastor Business Expenses

From moving expenses to personal computer expenses, there are a number of miscellaneous business expenses that pastors can deduct from their federal income tax liability when preparing their 2012 taxes. These include an array of church-related travel and transportation expenses, entertainment and home office expenses.

Here is a list of other expenses to keep in mind for tax preparation this year that is generally tax deductible.

Contributions to a Religious Organization

Contributions made by the pastor to the church are deductible as charitable contributions on Schedule A. If donations are required of the church leader, then these donations are deductible… Continue reading

Pastors Taxes and Travel Expenses

Travel expenses can be a deductible expense when it comes to submitting yearly income tax for ministers. This applies to both self-employed ministers as well as ministers that are considered employees of their churches. It’s important to note, however, that deductions are treated differently based on whether pastors are considered self-employed vs. employees.

Travel expenses can be considered a business expense on pastors taxes and therefore deductible if they are run-of-the-mill expenses incurred while traveling for official pastoral duties only. Similar to other non clergy taxes, these expenses must come with a receipt and proper accounting records which include date… Continue reading

Minister Tax Strategies

Ministers often go into the ministry because of their love for God and passion for people. Little do they know that the nuances involved in clergy taxes are often quite complicated, leaving them to wonder why they didn’t just become firemen or teachers. Clergymen need not let their passions be doused just because of complicated minister tax laws

Ministers find themselves in a distinct position when it comes to paying clergy taxes to the federal government, which considers them both employees and self-employed at the same time. As a result, it often behooves ministers to seek professional tax preparation help… Continue reading

Pulpit Freedom Sunday Questions Clergy Tax Laws

According to an October 2 Huffington Post blog, nearly 1000 pastors from around the country will have taken on the IRS on Sunday, October 7 by participating in “Pulpit Freedom Sunday”. One of the major aspects of clergy tax code is the fact that churches are considered tax-exempt. However, pastors across the country believe that their voices are being silenced politically due to that status.

Currently under the Johnson Amendment, tax-exempt organizations, which include churches, are not allowed to endorse any candidate running for elective public office. Therefore, the questions behind the creation of “Pulpit Free Sunday” is whether or… Continue reading