February 1, 2017
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 two different ways:
Federal Income Tax = Employee status
Ministers who meet the Internal Revenue Service (IRS) definition of a minister are considered an employee of the church for federal income tax purposes.
It is possible, but much less common, for ministers to be designated as self-employed for federal income tax purposes. Before doing this, seek the advice of a local attorney or tax professional. These returns are more likely to be audited by the IRS because, often, they’re not in compliance.
Social Security and Medicare Tax = Self-Employed Status
For Social Security and Medicare tax reporting purposes, the majority of ministers should be classified as self-employed with respect to income for pastoral duties. This means they are generally subject to Self-Employment Contributions Act (SECA) tax. When this is the case:
What’s at stake?
It’s important to correct a withholding error. A minister is at risk for losing his or her dual tax status or housing allowance if it’s discovered that the ministry was withholding Social Security and Medicare taxes. If your church has withheld these taxes:
Want more information?
The ability to inspire others to give is a blessing. Because fundraising can be both exciting and challenging, there are some important details to consider that can help your donors, and organization, have a smooth and successful experience.
Has your church or school ever been asked to loan or rent one of your vans or buses to another ministry? Rather than running the risk of loaning or renting your own vehicle, you could consider aiding them financially in renting or chartering a vehicle from a rental agency.
A periodic review of your insurance policy is a good way to make sure your ministry is protected for its most current needs, but it also may offer the opportunity to find some significant savings.
Having insurance coverage specifically designed for long-term international missions helps protect your people and organization from the financial impact caused by injuries, lawsuits, property damage, and more.
For the second year, the Brotherhood Mutual Foundation is offering the Kingdom Advancing Grant to innovative Christian church programs that are transforming local communities through ministry.
With the holiday season right around the corner, it’s wise for ministries to evaluate their fire safety plan. Whether your ministry is hosting a holiday party, prepping treats for charity, or running a community kitchen, make sure you’re well-prepared with these tips.
As school is back in session, it’s important to make sure your school is equipped with the correct safety procedures. Thinking about your school’s physical security as a series of layers can help you find gaps in your plan. Transportation and volunteers are just two important aspects of your school safety plan to think about.
Anyone who turns on the news, flips through a magazine, or browses the web can see that American society and culture are experiencing rapid transitions. Some ministries have valid concerns that issues surrounding societal shifts may expose them to negative publicity, governmental scrutiny, or litigation.
Cyber security is increasingly crucial in our technologically advanced world. Scammers use many schemes when attempting to steal your data, but you can outsmart them by understanding their methods.
When conflict occurs in the church, it can threaten the unity of a congregation. Experts say the only way to heal conflict is to acknowledge and address it. But how?
Theft isn’t just an issue for banks and large companies. Sometimes the kind and caring nature of your ministry is exactly what makes you a target. Organizational Optional Theft Coverage helps to assure that, if a thief takes advantage of your institution, what’s lost can be restored.
Most ministry leaders don’t realize there is funding available to non-profit employers including churches, schools, colleges, and camps. This post includes some highlights about the credit and guidance on where to start to see if your ministry is eligible.
April is National Child Abuse Prevention Month. Though child abuse may not be something you could ever imagine happening within your ministry, sexual abuse of a minor is one of the top five reasons churches end up in court, according to Church Law & Tax. Studies also show that a child is much more likely to be sexually abused by a trusted adult than a stranger.
When severe storms strike, they can produce high winds and tornadoes. Damaging winds can wreak havoc on your ministry’s property and to buildings. A high wind event can crash debris through your windows, strip your siding, down trees on your parking lot, peel shingles off your roof, and fling back the flashing.
Thieves are taking advantage of soaring precious metal prices. Take steps to protect your ministry’s vehicles and property.
As temperatures plummet, the risk of freezing pipes soars. Frozen pipes can cause costly messes that could also put your ministry on hold while you clean up.
Preparing for this Christmas season may require additional creativity, due to the uncertainty of what COVID-19 may bring in our local community.
A mid-November deadline in the Boy Scouts of America’s (BSA) bankruptcy proceedings may have you wondering what the organization’s bankruptcy filing means for your ministry if you ever hosted or chartered Boy Scout Troops.
Organizations that obtained Paycheck Protection Program (PPP) funding through the CARES Act can have their loans forgiven, turning them into grants. To qualify, each borrower must file a forgiveness application with its PPP lender, proving that it followed the rules. If your church, school, college, or camp meets all the criteria, 100% of its loan can be forgiven.