Clergy W-2 forms can be a little confusing, and almost every Church seems to do them a little bit differently. And even filling them out requires a little bit of tax knowledge about what is and what is not taxable.
Box 1 of the W-2 should include everything that you need IRS to consider as taxable income. Some common items that are included in box 1 are:
- Non-accountable allowances for auto and professional expenses
- A church allowance for social security
- Gifts from the church
- Moving expenses paid by the Church
Some items that should typically not be included in box 1:
- The fair rental value of a parsonage
- Utilities paid by the church for a parsonage
- Your housing allowance
- Accountable reimbursements for auto and professional expenses
- Your salary deferrals into a pre-tax retirement account
- Qualified contributions to an HSA, HRA or health FSA.
If you or your church needs assistance, Clergy Financial Resources is here to serve. We offer resources for payroll, bookkeeping, HR and tax. Visit our website at https://www.clergyfinancial.com/services/ for a full listing of our services today!
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
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