Tax Rules Related to Ministers and Clergy

CPAs, EAs, CRTPs

Many practitioners overlook the unique tax rules that apply to ministers, which can lead to significant filing errors. This course clarifies the special tax treatments for ministerial services, including exemptions from gross income, self-employment tax, withholding requirements, and the parsonage allowance. Key definitions and common income and expense issues are also explored to strengthen practitioner understanding.

• Determine the difference in classification of out-of-pocket costs as business expenses or charitable contributions
• Identify all sources of income and determine which sources are included in gross income, and which sources are included in self-employment income
• Understand the concepts of burden of proof and donative intent in determining whether a payment is a gift or compensation
• Become familiar with the rules for payments to retired ministers, including the classification of payments received under a pension plan
• Understand the rules pertaining to the treatment and classification of the parsonage allowance, fair rental value, and amounts spent on utilities
• Calculate gross income for federal income tax purposes, as well as self-employment tax purposes
• Define various clergy-related terms such as religious order, vestments, and vow of poverty