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SMoran
Level 1

I am a Worship Arts pastor of a church, needing help on answering the question about "Clergy self-employment tax".

Received a W2 with Box 1 and 14 only filled out.  Box 14 contains my housing allowance.  Need help answering if I pay SE tax on wages only, housing allowance only or on both?  No SS or Medicare taxes were taken out.

2 Replies
ErnieS0
Employee Tax Expert

I am a Worship Arts pastor of a church, needing help on answering the question about "Clergy self-employment tax".

You should answer "Pay self-employment tax on wages and housing allowance" if Social Security and Medicare were not withheld from your pay and you are not exempt.

 

The IRS says, "If you are a member of a religious order who hasn't taken a vow of poverty, your earnings for ministerial services you perform as a member of
the order are subject to SE tax."

 

You will pay income tax on your Box 1 compensation and SECA on Box 1 and your housing costs.

 

Members of the clergy are able to deduct business expenses against Social Security/Medicare tax. 

  • Click on Other Tax Situations at the top
  • Scroll down to Business Taxes
  • Click on Self-Employment tax
  • Click Make Adjustments on the screen Self-Employment Tax
  • Enter the amount of your Ministerial Business Expenses

Related Reference

SMoran
Level 1

I am a Worship Arts pastor of a church, needing help on answering the question about "Clergy self-employment tax".

Thank you so much for responding.  This makes better sense than how it is explained.  Appreciate it

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