![]() ![]() So, churches don’t have to withhold income taxes for their pastors but they can.įourth, the US tax system is a pay-as-you-go system. Every other employer is required by law to withhold income taxes for their employees, but pastors are exempt from that. Third, unlike SECA taxes, churches have the option to withhold income taxes for pastors. If a church withholds SECA taxes, it can mess up the pastor’s records with the Social Security Administration.Ĭhurches Can Withhold Income Taxes For Pastors Neither the pastor or the church has any say in the matter, that’s just the way it is. Second, churches are not allowed to withhold SECA taxes for pastors. ![]() ALL ministers pay under the SECA system, it is not optional.Ĭhurches Cannot Withhold SECA Taxes For Pastors Self-employed people pay these taxes under the SECA system. That means that you pay income taxes as an employee but pay payroll taxes (Social Security and Medicare taxes) as if you were self-employed. There are some basic facts that you need to understand about taxes for pastors before we get into how to pay them.įirst, all “ministers” by the IRS definition are dual status taxpayers. Today we are going to go over the three different options that pastors have for paying their taxes.īefore we get too far in, though, we need to lay the foundation for what we are going to be talking about. It took me a while to figure out how they all work, so I don’t fault anyone else for not knowing. Taxes for pastors are unusual and it’s very rare for someone to actually explain them to you when you enter the ministry. She felt dumb asking, but it was unwarranted. (If you have any questions, no matter how dumb you may think they are, I’d be happy to help!) She was too embarrassed to ask their tax preparer after all this time, so I was a safe place to turn. I recently received an email from a pastor’s wife of 15 years asking for clarification on how their taxes were paid. ![]()
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