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According to the legal case of Weber vs. The Commissioner in 1995, ministers are employees for everything except social security taxes. Therefore, they should receive a W-2 form. The ruling was based primarily on the fact that ministers receive paid vacation and health insurance and pension which a true self-employed person would never receive.

No. The unused portion can be carried over to the first three months of the next year. It CANNOT be paid out to the minister at the end of the year as regular income.

We get asked this question a lot. The best way to answer this is to say that social security covers Medicare, life insurance, disability insurance, and retirement. If you opt-out and spend all the extra cash on Hawaii trips then you will be in big trouble. If you take the saved money and invest it in life insurance, disability insurance, and pension, then you might come out ok. However, keep in mind medicare. You can still buy medicare even if you have opted out of social security but it is much more expensive. If you are second career or bi-vocational you may already have your 40 quarters in to be eligible for medicare so that decision may be easier to make.

Ah, so you got those ads in the mail too. The only churches that are losing their tax-exempt status are those that probably should not have had it in the first place. (If you can call those a church). Those are the churches losing their status.

Churches can withhold the taxes so that a minister does not have to send in quarterly payments. However, when the money is sent in by the church it is all sent in as federal and state taxes. The church does NOT send in social security money.