What Does Clergy Dual Status Mean?

What Does Clergy Dual Status Mean? Under federal law, most ministers have dual tax status. Dual tax status means a minister is an employee of the church for federal income tax purposes, and self-employed for Social Security and Medicare taxes. For ministers, wages are reported in two different ways: Federal Income Tax = Employee status…

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Do you need to file a nonresident state return?

Do you need to file a nonresident state return? Generally, you’ll need to file a nonresident state return if you made money from sources in a state you don’t live in. Some examples are: Wages or income you earned while working in that state Out-of-state rental income, gambling winnings, or profits from property sales S…

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Gathering documents for tax season

Gathering documents for tax season In preparation to file individual federal, state, and local income tax returns, this is the season to gather documents.  Some of the documents need to be submitted with federal, local, and state tax returns, and will therefore be needed in the immediate future. Other documents should be retained by the…

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Commuting expenses deductible?

Commuting expenses deductible? You cannot deduct the costs of taking a bus, trolley, subway, or taxi or driving a car between your home and your main church or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your church or regular…

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Nontaxable income for clergy?

Nontaxable income for clergy These are examples of sources of income that are non-taxable: • Qualified love gifts (person-to-person and within limits) Cannot be solicited Must be spontaneous in nature Must be clearly ascertainable as a gift with no service attached Cannot qualify as a tax donation for the donor Are motivated out of affection…

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What is Considered Income For Tax Purposes?

What is Considered Income For Tax Purposes? Tax season is right around the corner. Employers are preparing and sending out W2 forms to their employees and 1099 forms to their contractors. Individuals are receiving a wide variety of tax-related documents. A threshold issue for proper individual tax reporting is understanding what is considered taxable income….

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Quarterly Estimated Tax Payments – Q4 Reminder

Quarterly Estimated Tax Payments – Reminder If you are making quarterly estimated tax payments to the IRS, the due date for the September 1st – December 31st, 2021 quarter of the year is January 18th, 2022. You may be able to skip the January 18th payment if you file your 2021 return by January 31st,…

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Are contributions effective for 2021 or 2022

Are contributions effective for 2021 or 2022 It’s that time of year again when many people add charitable giving to their busy holiday to-do list. Year-end giving can come with great benefits, of course, and now is a good time to refresh on some highlights, as well as finer points that can get donors in…

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Ministry Mileage

Ministry Mileage Documentation of expenses is vital to an acceptable accountable reimbursement plan. Pre-Covid, ministry mileage driven is generally the minister’s greatest expense. Some ministers have contended that every mile they travel is in the furtherance of their ministry – and thus reimbursable. Their contention is based upon the fact that they never stop being a…

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Retirement 403(b) Plans for Ministers

Retirement 403(b) Plans for Ministers While it is true that ministers, and other church employees, may earn less than those performing similar jobs requiring similar skills in the secular world, there are unique tax advantages that can help offset the compensation differences. One of the greatest advantages for church workers is the 403(b) retirement plan….

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