How do I calculate my Self-Employment Taxes?

The Self-Employment Taxes that most members of the Clergy must pay quarterly are actually made up of two different taxes: Old-age, survivors and disability insurance (also known as “OASDI” or the more commonly used term “Social Security”) Medicare taxes OASDI taxes are calculated as 12.4% of your income. The maximum wage limit on OASDI is…

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What are Self-Employment Taxes?

If you are new to Ministry, it’s possible that you’ve never heard of self-employment taxes before, much less paid them. One common mistake for new Ministers is filing the 1040 without taking self-employment taxes into account, which can result in a big bill later when your 1040 return gets corrected by IRS. When you work…

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Clergy pay social security as self-employed

Determining the correct social security tax for clergy is often confusing. Clergy pay social security tax under the Self-Employment Contributions Act (SECA), not under the Federal Insurance Contributions Act (FICA). Clergy engaged in the exercise of ministry are always treated as self-employed for social security tax purposes. A congregation should never deduct FICA tax from the pay of a…

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