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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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Cashed in my 403b. Have minsters exemption from federal tax.

Customer Question

Cashed in my 403b. Have minsters exemption from federal tax. Had 20% tax taken out when I closed out 403b. Am I correct in thinking the 403b income was all contributed as I work as a pastor and would be exempt from the 20% federal tax with my exemption? If it is how do I file my return to get it back?
Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

There is no minsters exemption from federal INCOME tax.

Exemption if you have one ONLY applies to social security taxes.

Expert:  Lev replied 9 months ago.

A minister who receives a housing allowance may exclude the allowance from gross income to the extent it is used to pay expenses in providing a home.

However all other income including 403b distribution is not excluded from income tax and is not excluded from withholding.

However - your actual tax liability is calculated on your tax return.

So - we need to consider all your income to find out if you will have any refund.

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