Minister’s Spouse & Family Travel Expenses

During the summer months, ministers and their families often travel together. Sometimes a minister is able to combine a trip that is partially for vacation, and partially for a legitimate business purpose, such as attending a ministry-related conference or seminar. As long as the portion of the travel that is legitimately for business purposes is…

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Are my taxes going to go up in 2021?

Looking forward to the next year, many people are wondering if their taxes are going to go up. Fortunately, the tax brackets for 2021 have already been published, so we have the answer to this question. For the vast majority of Americans, there will be no change or even a slight decrease in taxes if…

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Where’s my refund?

One of the most common questions about tax returns is “Where’s my refund?” This is no surprise, given the impact of 2020 pandemic on IRS staffing. With the holidays coming and expenses piling up, it can be frustrating waiting for a response. Here are some quick tips for checking on your IRS refund: There are…

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Is a gift of a holiday turkey taxable?

Many Churches and other employers like to give to their employees around the holidays. In most cases these gifts are taxable, but like almost all tax laws there are a few exceptions. According to IRS Publication 525, “If your employer gives you a turkey, ham, or other item of nominal value at Christmas or other…

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FAQ: Why is my taxable income so low? How are taxable wages calculated?

When filling out applications for loans or student aid, a lot of clergy parents are surprised by line 1 of their tax return. Lenders frequently ask “Why are line 1 taxable wages so low?” The answer is usually the same: Clergy have low taxable wages reported on the 1040 return because of the housing allowance….

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Are ministers employees or self-employed?

The answer is “both.” Ministers have what is commonly referred to as “dual tax status.” For federal income tax purposes, a minister is generally treated as a common-law employee. For payments into Social Security, the minister is always self-employed. This is an IRS regulation and not an election. When a church hires an employee, one…

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What is Honoraria and how do I report it on my taxes?

You may have heard the term “honoraria” refer to weddings, funerals, baptisms, or any number of other activities. But where does the term honoraria actually come from? The dictionary definition of Honoraria is “a payment for a service which custom or propriety forbids a price to be set.” There is usually no expectation or requirement…

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FAQ: If I earn too much, will that put me into the next tax bracket?

A very common question we receive is regarding income and tax brackets. Many people are concerned that if they earn too much money, it will result in a huge increase in taxes from entering the next highest tax bracket. While entering a higher tax bracket increases your tax rate, it is important to note that…

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FAQ: Can I stop my church from taxing me as a Minister?

When confronted with the additional self-employment tax burden that clergy face, many ministers ask the question “Can I just tell my church to tax me as a normal employee?” Unfortunately, whether you are taxed as a Minister is determined primarily by the functions of the position. IRS lists five criteria to determine if a position…

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Clergy Moving Expenses Q&A

This Q&A has been developed to provide general information for churches and clergy who may have questions about the change in federal tax law concerning moving expense payments.  Q: How does the new law change moving expense payments? A: The moving expense exclusion and the individual deduction were both eliminated for tax years 2018 through…

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