Tax and bookkeeping for pastors and the churches they serve
Clergy taxes have their own set of rules because clergy are considered “dual status”: employees for one purpose and self-employed for another. The housing allowance can be a huge benefit, but only if the church designates it in advance.
I’m a pastor’s wife. I’ve prepared these returns for clergy around the country but also for my own family. I also specialize in church bookkeeping, fully understanding the unique nuances of church operations and financial integrity.
I work with pastors and churches across traditions and would love to hear more about your church’s specific needs.
For pastors
For churches
For pastors: clergy tax preparation and planning
I prepare federal and state returns for ministers and their families, including amended returns if a prior year wasn’t done right.
What makes your return different
You have two tax identities.
For income tax, you’re almost always an employee of your church. For Social Security and Medicare, your ministerial income is self-employment income. Your church shouldn’t be withholding FICA, and you’re paying both halves yourself.
Your housing allowance must be designated before it’s paid, in writing and in advance.
The exclusion is also capped. It can’t exceed your actual housing costs or the fair rental value of your home. I can help you nail down a reasonable housing allowance number, and double check that your church is handling the designation process correctly too.
Nobody is withholding for you.
Because your Social Security and Medicare obligation comes through self-employment tax, it isn’t coming out of your paycheck. Quarterly estimated payments are important, and I can help you figure out exactly how much you should set aside.
Form 4361 and the Social Security decision
If you’re early in ministry, you may be weighing whether to opt out of Social Security.
This is one of the few decisions in the tax code that you cannot undo. The window to file is narrow, and once it’s approved it’s permanent. It also isn’t a financial election. The form asks you to certify a conscientious or religious objection to accepting public insurance benefits for your ministry work. If your reason for opting out is because the math looks better, this isn’t the right path for you.
If you’ve already filed a 4361, I’ll make sure your returns are prepared consistently with it.
Let’s get it right
I’d rather your family keep what’s yours and your church spend its money on ministry.
Book a tax consultation
For pastors and their families.
Book a bookkeeping consultation
For churches and church staff.