If you haven’t switched positions in a while, you may be surprised to find that the form W-4 has changed drastically since you changed jobs. IRS changed the form to match changes in tax law, and all employees first paid after 2019 will have to use the new form (for frequently asked questions about the form, visit https://www.irs.gov/newsroom/faqs-on-the-2020-form-w-4). Clergy may be confused on how to fill in the W-4, since they are exempt from social security and medicare withholding, and their income tax withholding is optional.

For clergy who want no withholding at all, they need to write “Exempt” on Form W-4 in the space below step 4c, then fill in sections 1a, 1b and 5.

For clergy who want optional withholding for their social security or medicare taxes, the easiest place to complete this is in box 4c, extra withholding. Specify how much you want taken out for each pay period. Complete sections 1a, 1b and 5 as normal.

As always, communication is key. Even if you fill in the W-4 correctly, you have to make sure that your payroll person understands what you want done. It is good to talk over the phone or have an e-mail conversation to verify they understand how much you want taken out of each paycheck. CFR highly recommends also checking your paystub after the first payroll to make sure that the withholding is correct.

Clergy Financial Resources offers several options to help you with your tax questions or filing. We have listed three great options to get started. 

Did you know that Clergy Financial Resources also offers payroll services? If you are ready to make the switch to a church-focused payroll provider, select the desired link below.

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Tax Services Designed for Religious Professionals

Ministers are treated differently under the tax code than anyone else in the country and have advantages and disadvantages. The majority of ministers are using a professional tax preparer to assist with the preparation of taxes. Even if you have a simple return, the rules are constantly changing from year to year, so you don’t want to overlook any deductions. Learn how our knowledge, experience, and approach sets our firm apart. 

Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101 
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com