Tips on Selecting a Tax Preparer

Choose a person with experience preparing ministers’ tax returns.

Richard R. Hammar

Let’s assume you’ve decided to have your tax return prepared by a professional. The next step is to find someone who is experienced and competent in the preparation of ministers’ tax returns. Here are some tips to help you find such a person:

  • If possible, stick with a CPA or tax attorney. These professionals have completed a rigorous educational program, passed a difficult qualifying examination, and are subject to a comprehensive body of professional ethics.
  • Try to use someone local.
  • Find other ministers in your community who have their tax returns prepared by a professional, and ask questions. Who do they use? Are they pleased? What is the cost? How many ministers’ tax returns does the person prepare?
  • Call CPAs listed in your telephone directory; ask if they prepare ministers’ tax returns and, if so, ask how many they prepare.
An Enrolled Agent is another option to consider. Find out what some experts have to say.

When you find one or more possible candidates, consider asking a few simple questions that should be answered easily by anyone with any experience in handling ministers’ tax returns. Here are four examples:

  1. Are ministers employees or self-employed for Social Security purposes? Ministers always are self-employed for Social Security purposes with respect to their ministerial income.
  2. Can I claim my housing allowance exclusion in computing my self-employment taxes? No.
  3. If I report my church wages as an employee, are my wages subject to FICA taxes? No. Ministers pay the self-employment tax rather than FICA taxes on their ministerial income.
  4. If I report my church wages as an employee, are my wages subject to income tax withholding? No, unless a minister elects voluntary withholding.
  5. What is the minister’s housing allowance?The portion of a minister’s salary designated in advance by an employing church for housing expenses. This amount is not taxable in computing a minister’s income taxes to the extent it is used to pay housing expenses and does not exceed the home’s fair rental value.

    6. Persons who are familiar with ministers’ taxes should be able to answer these questions.

    Adapted from chapter 1 of the Church & Clergy Tax Guide. Order it now for tax help throughout the year.

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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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