I’m not trying to dissuade you from having a tax professional prepare your W-2’s, but, if you are up to the challenge, here’s how to do it. This is mainly aimed at clergy in the Dakotas UMC, but I bet you could translate this into Lutheran or Presbyterian or Baptist or even Non-Denominational.
Here’s the confusing thing: a Pastor is an Employee according to the IRS and Self-Employed according to the Social Security Administration. That means you leave the social security and medicare parts blank. You also have to treat housing exclusions and housing allowances differently as the IRS doesn’t consider that to be taxable…although the SSA does.
Check out the video below:
- Dakotas UMC Legal Resources: https://www.dakotasumc.org/finance-and-benefits/finance/legal-resources
- Clergy Tax Webinar: https://www.youtube.com/watch?v=5HIzf4Tgh84
- Pay & Tax Worksheet (PDF): https://www.dakotasumc.org/media/files/old/00/Conference/Finance/Legal/Pastor_Payroll_Worksheet.pdf
- Pay & Tax Worksheet (Excel): https://www.dakotasumc.org/media/files/old/00/Conference/Finance/Legal/Pastor_Payroll_Worksheet.xlsx
- W-2 & Pastor’s Salary Guide: https://www.dakotasumc.org/media/files/old/00/Conference/Finance/Legal/w2_Pastor_pay_worksheet.pdf