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Social Security - Part 1

• Feature articles in the previous two issues of Church Law & Tax Report have discussed a significant change in the "self-employment tax" (i.e., the social security tax for self-employed persons) that takes effect on January 1, 1990. According to the article appearing in the previous issue of Church Law & Tax Report, the self-employment tax rate increased from 13.02% in 1989 to 15.3% in 1990 (i.e., self-employed persons now pay the combined FICA tax), but clergy and other persons deemed self-employed for social security purposes are permitted a deduction of half their self-employment tax for both income tax and self-employment tax purposes. This position was based on private discussions with representatives of the IRS chief counsel's office. In a recent letter to Washington, DC attorney Charles Watkins, a representative of the IRS chief counsel's office confirmed that clergy will be ...

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  • March 1, 1990

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