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ezcpa, CPA
Category: Tax
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Experience:  Certified Public Accountant
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hello a friend of mine her uncle just become a minister in

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hello a friend of mine her uncle just become a minister in 2011. does he is going to do his taxes as a self employed and file a 1040 with schedule C and what are the do's and donts when you do your taxes!!
Submitted: 4 years ago.
Category: Tax
Expert:  ezcpa replied 4 years ago.

Hello. Thank you for using Just Answer.


Here are some items to consider when the Minister does his taxes.


Salaries, fees, offerings made to the Minister are taxable. If the offering is made to the church, then its not taxable.


"Ministers of the Gospel" can EXCLUDE rental value of home, utilities, furniture and most items a church provides as rental allowance. Even though the value of the home is not taxable, a minister can still deduct mortgage interest and property taxes paid on the home.


For self employment tax, a minister can elect not to pay social security and medicare taxes. Use form 4361 or Form 2031.


Here is an IRS link to more information you may find useful.



I hope this answers your question. Please let me know if you need additional information.


Customer: replied 4 years ago.

well hopefully is not hard to do his taxes!!!

he is going to try in turbo tax via online!!!

but when you said utilities, furniture, etc etc what is the percentage that he can claim!! for example if his bills on utilities is $2000 month, how much does he is going to deduct on his taxes is just an example !! he still have a lot of things like miles on his car, doing a lot of baptisms, weddings, etc etc

Expert:  ezcpa replied 4 years ago.

It shouldn't be too hard. The biggest decision is if he wants to pay self employment tax or not. Ministers often elect not to pay the social security and medicare - and then have a problem when they are about to retire and are not eligible for social security. So be careful there.


For the other expenses, basically whatever he receives from the church (as compensation for his services) is not reported at all. There is no deduction and he doesn't have to include it in income.


Anything he pays out of his own money - like utilities, car mileage he can deduct on Schedule C.





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