Tag Archive for Dual Tax Status

The Minister’s Dual Tax Status

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An ordained minister occupies a unique niche in the United States tax code, as he or she is a dual-status taxpayer. A minister is an employee for income tax purposes and is self-employed for social security and Medicare. This dual status has frequently been the source of confusion for both ministers, churches, and tax preparers. A complicating factor is that a minister may opt-out of social security and Medicare but that is a topic for another time.

It is proper for the church to issue a W-2 to the minister. A 1099-MISC is an incorrect treatment in this instance, although many churches do issue 1099-s to their ministers. Some churches do not fully understand their own tax-exempt status and do not give the minister any tax documents at year end. Obviously, this is also improper. Read more