Incorrectly classifying someone as an independent contractor instead of an employee can be very costly for the church based on IRS penalties. When in doubt, your best bet is to classify someone as an employee. If you really want to classify an individual as an independent contractor, you can’t dictate how much time they spend working or how they do their work. You also can’t provide them any church paid benefits and should not pay them an hourly rate or salary; you must pay them based on their contract fee. Source: Clergy Financial Resources
Clergy Financial Resources is a national accounting and finance organization serving churches and clergy since 1980. They have an unparalleled tax expertise on the complex issues associated with clergy tax law, clergy taxes, clergy compensation and church payroll. Clergy Financial Resources is a valuable resource for clergy, churches and denominations.< Back
Clergy Financial Resources’ National Tax Office serves as a resource for clients to help analyze complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends through various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
For more information or if you prefer to make an appointment over the phone or need additional assistance, please use the contact information below.