The IRS has special conditions and laws for the taxation of ministers. These can be rather complex for anyone to understand, including accountants. Members of the clergy often have questions about filing taxes, such as:
- Am I considered a minister, for tax purposes?
- Why doesn’t the church withhold FICA on my paychecks?
- Do I have to pay FICA taxes?
- What happens if I elect out of FICA?
- I have not opted out, but the church still doesn’t withhold FICA, what can I do?
- I also work at a secular job, will they stop withholding FICA too?
- The IRS has called me Dual Status, what does that mean?
- How does a housing allowance work?
- How much should I claim for my housing allowance?
- How should I plan if the church provides me with a parsonage?
- What expenses can I deduct as a pastor?
- I don’t want to pay a large tax bill at the end of the year, what do I do?
- My honoraria are gifts and tax free…right?
- What about ministry work I do outside of the church I work for?
It is extremely important for new members of the clergy to understand the unique tax issues facing them. Joseph E. Madden is a CPA with over 20 years experience, and has run his own practice in Denison for the last 17 years. He is very knowledgeable about the special requirements for clergy taxes, and enjoys helping ministers handle their tax obligations.