Should Ministers Prepare Their Own Tax Returns?

Discover whether ministers should prepare their taxes themselves or hire a professional, plus tips to avoid mistakes.

Last Reviewed: January 9, 2025

Ministers can prepare their own tax returns. While ministers’ taxes include unique rules, they are not overly complex. Unfortunately, many people confuse uniqueness with complexity. With some effort, most ministers should be able to comprehend these rules sufficiently to prepare their own tax returns. Resources like the Church & Clergy Tax Guide and IRS Publication 17 (Your Federal Income Tax) provide essential guidance.

When Should Ministers Prepare Their Own Taxes?

  • Ministers who want to save on tax preparation fees may consider doing it themselves.
  • Unique rules for ministers’ taxes can be managed with proper resources and study.
  • For simpler cases, following trusted guides is often sufficient.

When to Hire a Professional

Some ministers may prefer hiring a professional tax preparer for convenience or confidence. If this is your choice, keep the following in mind:

  • Select someone with experience preparing ministers’ tax returns—ideally a tax attorney or CPA.
  • Share resources like the Church & Clergy Tax Guide to ensure accuracy.

What to Know Before Hiring a Tax Preparer

Consider these factors before deciding to have someone else prepare your taxes:

  • An IRS study found more than half of returns prepared by paid preparers contain errors.
  • Common mistakes include:
    • Failing to claim the standard deduction.
    • Entering incorrect amounts or filing with the wrong status.
    • Filing unnecessary schedules, such as Schedule SE when earnings are below $400.
  • Paid preparers face penalties for filing returns with unreasonable positions, discouraging aggressive strategies.

Risks with Nonprofessional Preparers

Be cautious when working with nonprofessional or mail-order tax preparers. Avoid those who promise excessive tax savings or lack qualifications, like attorneys or CPAs. The IRS Return Preparer Program audits preparers who disregard federal tax laws.

Key Takeaways

  • Ministers can confidently prepare their own taxes using reliable resources.
  • If hiring a professional, ensure they are qualified and familiar with clergy-specific rules.
  • Avoid preparers who lack professional credentials or make unrealistic promises.

For comprehensive guidance, refer to the Church & Clergy Tax Guide.

FAQs

1. Can ministers deduct expenses if they prepare their own taxes?

Yes, ministers may deduct eligible expenses like resources or software used to prepare their taxes.

2. What are the risks of filing taxes without professional help?

While ministers can self-prepare, they must carefully follow clergy tax rules to avoid errors that may trigger audits or penalties.

3. Should a minister file taxes if they earn below $400?

Yes, ministers must still report earnings, even if their net self-employment income falls below $400.

4. Are mail-order tax preparers safe for clergy taxes?

No, it is best to work with licensed professionals, like CPAs or tax attorneys, experienced in clergy-specific tax rules.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.
ChatGP4o, Team Gloo Workspace
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This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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