Albert Einstein was quoted saying, “The hardest thing to understand in the world is the income tax.” Doing income tax as a lay person is feels kind of like defusing a bomb. It’s nerve-racking. The consequences are pretty painful if you make a mistake. Now imagine that instead you’re defusing a bomb while hanging upside down…over a pit of snakes. That’s what clergy taxes can feel like.
The video below is from the clergy tax training for our new clergy. In it, I cover:
- Housing Exclusion and related expenses
- Understanding the clergy compensation package
- How clergy are both employees and self-employed
- Making tax payments
Useful Links
- Clergy Tax Estimator: https://www.dakotasumc.org/media/files/CONFERENCE/5_Conf_Finance_Benefits/Finance/Clergy_Tax_Estimator.xlsx
- Slides from Presentation: https://www.dakotasumc.org/media/files/CONFERENCE/5_Conf_Finance_Benefits/Finance/clergy_taxes.pdf
- Housing Allowance Q&A: https://www.dakotasumc.org/media/files/CONFERENCE/5_Conf_Finance_Benefits/Finance/Housing_Allowance_QA.pdf
- Housing Allowable Expense List: https://www.dakotasumc.org/media/files/CONFERENCE/5_Conf_Finance_Benefits/Finance/Housing_List.pdf
- Pastor Payroll Worksheet: https://www.dakotasumc.org/media/files/CONFERENCE/5_Conf_Finance_Benefits/Finance/Pastor_Payroll_Worksheet.xlsx
- W2 and Pastor’s Pay Guide: https://www.dakotasumc.org/media/files/CONFERENCE/5_Conf_Finance_Benefits/Finance/w2_Pastor_pay_worksheet.pdf
- GCFA Tax Guide: http://www.gcfa.org/services/legal-services/gcfa-tax-packet/
- Pastor’s Wallet: http://pastorswallet.com/
- Church & Clergy Tax Guide: https://store.churchlawandtax.com/2022-church-clergy-tax-guide-book/
Dear Jeff,
This posting looks excellent. Thank you very much for giving me credit on the housing expense list, I really appreciate that! You will need to mention, though, that I am in the process of retiring and am sending all my clients and anyone who inquires to Connie Buskohl. (Pause for a few tears.)
Your spreadsheet for estimating clergy taxes looks to be really useful. I did not try it out, and wish I’d thought of doing it this way! Have you updated the numbers in your table tab for 2022? I did not check.
I am really looking forward to seeing you at Annual Conference this year!
Marilyn (763) 427-6080
Thanks, Marilyn. I did update the table for 2022. I wasn’t sure what would happen with Child Tax Credits. I’ve so much appreciated your work over the years.