Ten Fundamentals of Clergy Tax by Jon Wiebe #sdc2013



"Highly effective churches utilize holistic stewardship practices."      
         George Barna, 9 Habits of Highly Effective Churches

2 Corinthians 8:20-21

1. The structure of clergy compensation is evidence of the  congregation's  stewardship.
2. Clergy are almost always employees for income tax purposes
Form W-2, Form 1040

3. Clergy pay social security as self-employed.
must be ordained, licensed, or commissioned
employer responsibility
congregation match is taxable
Quarterly payments
4. Clergy rarely qualify to opt out of social security.
theologically object to tax not for financial reasons

5. The housing allowance can be the clergy's best tax friend.
Designation vs. Exclusion
6.  4 Tests (lower of 4)
Reasonable compensation
Actual Expenses
Amount Designated
Fair Rental Value (15% of Tax Assessment)

7. Tax-free and tax-deferred fringe benefits increase your take home compensation
Nondiscriminatory
Good stewardship of resources
8. Properly handling clergy business expenses starts with an accountable expense reimbursement                              plan.
Budgeted expenses
Accountable system

9. Fees and honoraria must be reported as income.
Paid by congregation-W-2
Not paid by congregation-1099-MISC

10. Charitable giving is tax deductible!

Comments

Post a Comment

Popular posts from this blog

Sermon Notes-"Transitional Thoughts"

Introduction: As I was thinking and praying about what to share during my final sermon on staff, I began to think of the transition that I am making as well as the church.   We as pastors have been consistently focused on three priorities over the last several years: prayer, worship and equip.   So, even though I may no longer be on staff in a few weeks at this church, as a member of this church I believe just as strongly that Hesston MB needs to continue to be about these priorities in the days ahead.   However, the more I prayed about it, the more I realized that to get to these priorities, we as a church also had to make some transitions so that is why I am entitling this message “Transitional Thoughts”.   Transition is defined as “the process or an instance of changing from one form, state, activity, or place to another.” Educate to Equip- Ephesians 4:11-16 ·          What is the difference?   o    To e...
Read more

You Are Blameless

“May God himself, the God of peace, sanctify you through and through. May your whole spirit, soul and body be kept blameless at the coming of our Lord Jesus Christ. 24  The one who calls you is faithful, and he will do it.” (1 Thessalonians 5:23-24)
Read more