1 preparing minister’s taxes all audio is streamed through your computer speakers. there will be...
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Preparing Minister’s Taxes
• All audio is streamed through your computer speakers. • There will be several attendance verification questions
during the LIVE webinar that must be answered via the online quiz at the conclusion to qualify for CPE.
• Today’s webinar will begin at 2:00pm EDT• Please note: You will not hear any sound until the
webinar begins.
Preparing Minister’s Taxes
Presented by: Kay K. Mortimer, EAAuthor of “Preparing Tax Returns for Ministers”
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Learning Objectives
Upon completion of this course, you will be able to:•Determine who qualifies as a minister|•Recognize the dual status of a minister•Identify the proper treatment of ministerial vs. non-ministerial employees by a church, and how to prepare their W2s•Apply the proper treatment of a minister's housing allowance on the minister's 1040•Advise your clergy clients concerning social security opt-out option•Calculate the proper self-employment tax for the minister•Advise your minister concerning his options of payment of his taxes and estimated taxes
A Minister is…
IRS definition:•“Licensed, commissioned, or ordained.” •Performs sacraments of worship
Dual-Status
Dual-status•Federal/State
• Voluntary w/h?
•SS/MC• Sch. SE
Employee or Self-Employed
W2 or 1099?Facts & Circumstances & InterpretationsExtenuating CircumstancesGeneral IRS position
Ministers vs. Non-ministers & W2
Church Payroll•Ministers vs. Non-ministers
• SS/MC issue• Voluntary withholding?• Ministers – special
• Housing• Car Allowance/Reimbursements• SS/MC
Payroll Reporting
941•Line by line•Depositing?•Checkbox?•Paying Minister’s SS/MC?
W2
Non-ministersMinisters•Box 1•Box 14•Box 2 or 12?•Checkboxes
Housing Allowance
Who qualifies?Determining amount?Board approval/acceptancePro-active not retro-active
Paying Housing
DesignatingPay FrequencySeparate check?•Separate designation
Reporting Housing - Payroll
941?SC940/SUTAW2 or statement (recommend W2-Box 14)
Minister’s Form 1040
Common with non-ministersOpt-Out:•Form 4361?
• Pros & Cons• Limited to ministerial only
1040 Considerations
Specifics for ministers•W2 – Line 7•2106
• Mileage/etc.
•Sch C•Deprec or OIH?
Other 1040 Considerations
Excess Housing•How to calculate
• Wages, Housing, Excess• Deductions allowed (2106)
•Other earnings•Clothing/Laundry?
Sch SE – line explanations
Ministers – use page 2•Form 4361?•If not, complete lines and calculate SE
Sch SE
Page 2
Paying Taxes
Voluntary withholding•Fed w/hEstimated Taxes•Calculate to cover all applicable
Retired Ministers
Form 1040 Considerations•1099R•Housing Allowances
Fringe Benefits – Basic Intro
Car AllowancesHealth InsuranceRetirement Plans
Accountable Plan
Accountable Plan recommended•Reimbursements•Ministers, non-ministers, & volunteers•Non-taxable reimbs.
Resources - Recommended
“Preparing Tax Returns for Ministers” – Kay’s bookDr. Richard Hammar’s “Church & Clergy Tax Guide” – updated annually
Recommended
Other Resources
• Learn more about Dr. Richard Hammar: http://www.churchlawandtax.com/who-we-are/advisors/richard-r-hammar.html
• www.irs.gov
Specific Resources:
Form 4361 & instructionsForm SE – p. 2 and instructionsHousing Allowance Determination SamplesCircular EForm 941 & instructionsChurch law and tax report
Questions?
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Thank you for participating in this webinar.Below is the link to the online survey and CPE quiz:
http://webinars.nsacct.org/postevent.php?id=16312Use your password for this webinar that is in your email confirmation.
You must complete this survey and the quiz or final exam (for the recorded version) to qualify to receive CPE credit.
National Society of Accountants1010 North Fairfax Street
Alexandria, VA 22314-1574Phone: (800) 966-6679
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