Avoiding Costly Tax-filing Mistakes
Avoiding Costly Tax-filing Mistakes
Ministers often make these 20 errors—here's how to avoid them.

Article summary. There are a number of errors that frequently appear on ministers' tax returns. These errors may be more common for ministers who prepare their own tax returns, but they also are often seen on returns prepared by professional tax preparers. This article will describe several of these common errors, and show how to handle ministers' taxes correctly.

The preparation of ministers' tax returns presents a number of challenging issues that often are not well understood. This can lead to innocent mistakes, which in turn can lead to unexpected additional taxes in the event of an audit. Let's review some of the mistakes that occur frequently. Ministers who understand these common errors are better equipped to prepare their own returns.

Error No. 1: Reporting Social Security taxes as an employee

Most ministers report their federal income taxes as employees. Many of these ministers naturally assume that they should report their Social Security taxes as employees too. Unfortunately, the tax law is not always logical. Ministers are always self-employed for Social Security with respect to services performed in the exercise of their ministry, even if they report their income taxes as an employee. This is sometimes called the "dual tax status" of ministers.

Log In For Full Access

Interested in becoming a member? Learn more.

View All
from our store
2020 Church & Clergy Tax Guide

2020 Church & Clergy Tax Guide

Find comprehensive help understanding United States tax laws as they relate to pastors and churches.
Planning the Pastor’s Retirement Package

Planning the Pastor’s Retirement Package

Use this guide to develop your pastor's retirement plan for all stages of life.
12 Law & Tax Guidelines for New Ministers

12 Law & Tax Guidelines for New Ministers

Essential knowledge to ensure legal and financial clarity and integrity in ministry.
20 Finance Questions Churches Ask

20 Finance Questions Churches Ask

Richard Hammar answers relevant tax and finance questions for church leaders.

ChurchSalary

ChurchSalary

Experience a whole new way to set compensation. Eliminate the guesswork – get access to detailed compensation reports in just minutes.