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?
For an in-depth discussion of ministerial dual-tax status practices, watch, Payroll and Tax Tips for Ministries, a webinar presented by Brotherhood Mutual’s MinistryWorks.
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.
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.
The questions become: when and how can ministries operate within their deeply held religious beliefs when they may conflict with others’ rights?
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.
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.
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.
Learn about the CARES Act and two loans for which ministries may be eligible, since Congress authorized additional funding April 23.
As concern over the dangers associated with the spread of a new coronavirus, COVID-19, spreads, our agency and Brotherhood Mutual want to keep you informed and provide best practices for managing the spread of this and similar illnesses at your ministry.
The first Sunday in February is a big day for sports fans. In fact, many Americans view Super Bowl Sunday as a national holiday. Friends and families will gather this year to watch the big game, enjoy delicious snacks, and of course, critique the commercials that go along with game day.
Recently, we learned about two major overseas incidents involving pastors on mission trips. The first incident involved a pastor being hit by a motorcycle while running. The second was a bus accident involving two pastors. The runner and one of the two bus passengers sustained extensive injuries.
Last month, the IRS announced that its initiating hundreds of church exams to test compliance with the Affordable Care Act (ACA). While many provisions only apply to churches with 50 or more full-time equivalent employees (FTEs), even smaller churches could potentially violate provisions applicable to health benefit plans with as few as 2 plan participants.
On October 24 and 25, American Church Group of Arizona, in coordination with Scottsdale Bible Church, will be sponsoring a two-day Southwest Church Safety and Security Summit.