Ministers can also have a combined employment status requiring two different types of reporting when filing taxes with the IRS. For instance, a minister may be employed by a congregation, but may also provide services on a freelance basis. This could include presiding over weddings, funerals and baptisms on a private basis. In these cases, a family or client commonly pays the pastor for services rendered. These earnings would be considered self-employment income. When completing Form 1040 at tax time, the IRS requires business income, such as pastor earnings for services outside duties required by the church, to be reported on a Schedule C attachment. If a housing allowance is provided by the congregation, the church should separate this amount when issuing an income statement to the pastor prior to tax time as it is only required to be reported on the Social Security income section.
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