Tax season can be overwhelming, especially for ministers who navigate unique tax rules. While we’re not tax experts, we work with clergy finances every day and understand the challenges you face. Our goal is to provide helpful insights and point you in the right direction. If you have specific tax questions, we’re happy to recommend trusted professionals who can offer expert guidance. In this season of tax preparation, Rev. David Boots takes a look at a couple of tax issues applicable to ministers:
Estimated Tax Payments
As credentialed, working Clergy, we are considered “self-employed” when it comes to Social Security and Medicare taxes, meaning we are solely responsible for the full 15.3% tax due on our total income (Salary + Housing Allowance). To be clear: churches cannot withhold Social Security/Medicare taxes for Clergy.
One way to meet the obligation of paying taxes to avoid any late fees or penalties is by way of estimated quarterly taxes (these can be paid online via IRS.gov/payments). Include your 15.3% liability, plus your estimated Federal tax liability (on salary only), divide by 4 and make payments on the 15th of each April, June, September, and then January (next year) for the current year’s taxes.
Another way which may be easier for many is to voluntarily ask your employer (by completing IRS Form W4) to withhold per pay period an “other amount” which is your total estimated annual liability (15.3% plus your estimated Federal Tax liability on salary/Box 1 income). Divide this amount by your total pay periods in the year to complete the form. Again, churches cannot withhold Social Security taxes for Clergy, but you can have the church voluntarily withhold the amount you estimate you will owe for Social Security, Medicare and Federal Income liability.
Keep in mind that your SECA (Self-Employment) and federal income tax liability are combined on your tax return, so just combine the total estimated for these as your payments throughout the year.
Lowering your tax liability
There is one way you can lower your annual tax obligation during your working years, and that is to increase the amount you have withheld “pre-tax” to put into your retirement account! Anything you send to your retirement 403b savings is not included as taxable income on your IRS Form W2 and thus, not reportable. Contributions to a Roth account are made after tax, meaning they are taxable.
Required Minimum Distributions (or RMD’s)
The “age trigger” for RMD’s has slowly crept upward and, as of 2025, in the year you reach the age of 73, the IRS requires withdrawing a minimum amount of your retirement savings (so they can receive taxes on it!) each year. The amount of your RMD is calculated annually by the IRS based on your total account balance for the current year. If you turn 73 this year be sure to seek guidance from a tax professional to guide you in this area. RMD’s are not applicable to Roth investments (you paid taxes before saving into a Roth), but they do apply to your tax-deferred retirement account(s).
We know that tax matters can be complex, but you don’t have to figure it all out on your own. While we can’t provide tax advice, we’re always here to help connect you with professionals who can. If you have questions or need a referral, don’t hesitate to reach out—we’re in this together!