Clergy are subject to estimated tax payments on a quarterly basis which include federal, social security and state taxes. For example, when you receive clergy income in the first quarter of the year, the taxes are due at the end of that quarter.
The year is divided into four payment periods, or due dates, for estimated tax purposes which are listed below. Clergy can also elect to have income taxes withheld from their compensation by means of voluntary withholding agreements which may simplify the budgeting. Contact Clergy Financial Resources for more information on optional withholding.
- Payment 1 – April 18, 2018 (January through March)
- Payment 2 – June 15, 2018 (April through June)
- Payment 3 – September 17, 2018 (July through September)
- Payment 4 – January 15, 2019 (October through December)
Generally, the Internal Revenue Service (IRS) requires you to make quarterly estimated tax payments for the calendar year 2018 if any of the following apply:
- you expect to owe at least $1,000 in federal tax for 2018, after subtracting federal tax withholding and refundable credits, and
you expect federal withholding and refundable credits to be less than the smaller of:
- 90% of the tax to be shown on your 2018 federal tax return, or
- 100% of the tax shown on your 2017 federal tax return (only applies if your 2017 tax return covered 12 months – otherwise refer to 90% rule above only).
If you do not pay enough tax in a timely manner either through withholding or making estimated tax payments, you may be required to pay a penalty.
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