The year is already half over and many people are travelling to see family for the Fourth of July. Small adjustments to your estimated payments mid-year can be the difference between being on target with your estimates or owing the IRS a lot of penalties and interest.
It is especially important to check your estimates if your income has increased or decreased significantly since the beginning for the year. For example, if you just started a new call, you should adjust your estimated tax payments.
But how much should you expect to pay over the year?
Clergy are treated like self-employed individuals in regards to Social Security and Medicare taxes. In general, you should expect to pay 15.3% of your Clergy income towards these self-employment taxes by the end of the year. Remember, this INCLUDES anything you receive as housing, since housing allowances are only removed for income tax calculations.
If your estimated tax payments are well above or below this 15.3% mark, then you may want to consider adjusting your estimates.
Did you have a large increase or decrease in your self-employment compensation? Are you starting a new call? Do you need your estimated tax payments recalculated? Clergy Financial Resources can help.
As part of our annual 1040 return service, we can recalculate your estimated tax payments in the middle of the year. For more information, visit our website at https://www.clergytaxnet.com/services/clergy-tax-preparation/
Not a current 1040 client? Not a problem! We also offer one-time estimated payment calculations under our Pro-Advisor Premium support. Visit our website at https://www.clergytaxnet.com/resources/proadvisor/ for details and pricing.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in 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 need additional assistance, please use the contact information below.
Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369
Tel: (763) 425-8778
Fax: (888) 876-5101