Hi,
I attend a small church (50 or so members.) OUr pastor does not receive a W2. He has always claimed using a Schedule C. He has found out that by doing this, he is not getting the standard deduction credit nor is he getting credit for the 4 dependents he has.

We want to have him listed as an "employee" and start issuing a W2 so he will get these deductions.

Question 1. How would we go about setting him up on a W2 (what does the church need to do)

Question 2. Is it too late to do this for this past 2007 year for the taxed we are now filling?

Thanks,
Cory

MukatA

Your pastor is making some mistake. Even if he files Schedule C (Form 1040) with his tax return form 1040, he will get standard deduction and all the dependent exemptions.

AtlantaTaxExpert

I agree with MukatA; your paster is probably not filing correctly.

Further, tax returns for ministers requires submission of special documentation. He should get professional help from a tax professional with experience filing returns for ministers.

Mobea

I totally agree with ATE. My daughter is a youth minister and her's is one of the hardest returns that I have to work on. LOL

Fr_Chuck

Yes, very hard return, I will note, that the income is shown as income, and it gets harder if they funish his home or any transpertation.

But it is recorded as income regardless if he gets a W2 or not, it is still income. So his deductions make no difference and his deductions would be the same with or without a W2, so if it is not working now, it is his method of doing the tax

OR, he is trying or wanting to claim things not allowed under current laws.

I make mine real easy now adays, I refuse any pay for my services to the church, and have them make it a donation to some charity or just a dontaion to our church.

AtlantaTaxExpert

Smart idea, Fr Chuck. Of course, most ministers cannot afford to do that!