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As a pastor, you have unique tax issues like the housing allowance and being dual status, so it’s not as easy for you as it is for others. You can’t just use any old tax software and trust that your taxes will be prepared correctly.
PREPARING YOUR OWN TAXES
If you want to prepare your own taxes using prepackaged software, TurboTax is the best bet for pastors. Doing it on your own without software is tedious and time-consuming but not impossible, especially if you’re a detail-oriented person or can’t find a CPA that understands pastoral issues. However, thanks to the internet, you should be able to find a professional to help you that understands your situation. When it comes to tax professionals, those that don’t understand clergy taxes are a huge waste of time and money and those that do are worth their weight in gold.
HOW TO FIND A TAX PREPARER WHO UNDERSTANDS PASTORAL ISSUES
I found that many pastors are “extremely happy” with their tax preparers. So, how do you find one of those and not the clueless guy from H&R Block that costs $600? Here are two questions to ask a potential tax preparer:
Are pastors employees or self-employed for Social Security tax purposes?
Is a pastor’s church salary subject to income tax withholding?
If they don’t answer these two questions correctly, run far, far away. You’ll be better off on your own. Here are the answers:
Pastors are always self-employed for Social Security tax purposes.
Pastors are not subject to income tax withholding.
Keep looking until you can find a tax professional that knows the answers to those questions off the top of their head.
Happy tax filing!
This is a condensed version of the above named article written by Amy Monday from The Pastor’s Wallet
Photo by Towfiqu barbhuiya on Unsplash