Confession time: I don’t trust the IRS’s new W-4. It’s new, and I was used to the Allowances on the old form. I’ve checked it out, and I like the theory behind it, but I’m still stuck in 2019 (the last year the old form was available). It should give you more accurate income tax withholdings…unless you are clergy. Clergy taxes are challenging and weird because the IRS thinks clergy are an employee but the Social Security Administration thinks they are self-employed.
The new Form W-4 makes it even more challenging for clergy because they got rid of that handy “Exempt” line. In the video below, I guide clergy (and those that help clergy) on how to properly complete the Form W-4.
- Form W-4 with Instructions: https://www.irs.gov/pub/irs-pdf/fw4.pdf
- Post to guide pastors on setting aside for taxes: https://jctaccounting.com/2021/07/02/how-much-should-pastors-put-aside-for-taxes/
- Post on paying pastor in QuickBooks: https://jctaccounting.com/2020/12/11/how-do-pay-your-pastor-in-quickbooks/