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Often Overlooked Sources of Taxable Income to Ministers

Clarifying what income is taxable and what is not.

Background. It is important for church treasurers to know how much taxable income the church is paying a minister so that the correct amount can be reported on the W-2 or 1099 the church issues to the minister. Unfortunately, the concept of "taxable income" is complex and confusing. Church treasurers often issue W-2 or 1099 forms that do not fully reflect all income received by a minister.

Key point. This article focuses on items of taxable income received by ministers that often are overlooked by church treasurers when completing the minister's W-2 or 1099 form. Many of the items summarized below apply equally to non-minister staff members as well.

Assignments of income. Sometimes a minister or other staff member will refuse to accept payment for services rendered. Consider two examples:

• Rev. G conducts services for two weeks at another church whose pastor is on vacation. ...

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  • December 1, 1995