Because ministers are unique in the way they pay taxes, churches must be careful in the way they do salary administration and tax reporting, according to Lee Wright, coordinator of the Alabama Baptist State Board of Missions’ office of church compensation services.
Wright conducts five conferences around the state each year and directed the Church Financial Issues Conference at First Baptist Church, Pelham, on July 14. About 50 church treasurers and other leaders gathered to learn more about proper procedures, new regulations and tips for handling taxes.
Social Security
For example Social Security is navigated differently than federal income taxes, Wright said.
“An ordained minister is considered an employee for federal income tax purposes and self-employed for Social Security and Medicare taxes,” he said. “Churches can withhold federal and state income taxes if they choose, but they cannot withhold Social Security taxes. The minister pays the full 15.3 percent rate himself.” (Continued…)
Read the rest of the full story as originally posted at: http://www.thealabamabaptist.org/print-edition-article-detail.php?id_art=34619#sthash.AKAD7R0o.dpuf
by Dogwood