Children's Minister

[LCP]

Fifteen hour a week job earning around $9000 reported on a W-2 with no FWT or SWT.

What kind of special tax treatment might she qualify for in 2006 or in the future if her deal is re-structured? She is not ordained or licensed ....... I'm not sure what "commissioned by her church" (TaxBook p14-6) means.

TIA

[veritas]

Was

Fica tax withheld?

[Bird Legs]

Childrens Minister

If this person is not an ordained or licensed minister, then she is an employee subject
to FIT WH, FICA & M/C tax.

[Chief]

Bird Legs

You haven't answered this person s question. What is a commissioned individual. The definition lies within the denomination or church that the children's minister is a part of.
We are not given that information in the posting.

[veritas]

LCP needs to answer

my question. I have often seen w2s for part time church workers and their was no federal or state witholding but they had fica taxes witheld.

[MAMalody]

You haven't answered this person s question. What is a commissioned individual. The definition lies within the denomination or church that the children's minister is a part of.
We are not given that information in the posting.

If the questions is what is a commisioned individual, I read Salkov v. Commissioner, supra, 46 TC at 190 (1966) and JM Ballinger, US Court of Apeals, 10th Circuit, No 82-1928, 2/7/84 (I think I typed those correctly) to say that when selected by the church s their minister, that constituted commissioning the individual as their minister. Therefore, this individul when selected as the minister of the church would be considered "ordained, licensed or commissioned." This would make them the typical dual-status minister elgible for a designated housing allowance and the church would not take out SS/MC. Sounds to me like the church handled it correctly.

Mike

[Bird Legs]

Childrens Minister

If this person can perform the same duties as the regular minister, ie. perform marriages,
administer at the communion service, etc. then, yes, it was handled properly. No
fica or m/c.
Or is this individual commissioned only to minister to the children?
These are some things that were not mentioned in the original post.

[LCP]

Thanks for all of the interest and input....

FICA and MCare was withheld (or at least shown on the W-2).... no FWT or SWT though.

My guess would be that the individual is not allowed to perform marriages, administer communion etc

Taxpayer's husband indicated that others like his wife were going to a tax preparer in the big city and getting some kind of favorable tax treatment (right or wrong).

[jainen]

claiming several exemptions

>>Fifteen hour a week job earning around $9000 reported on a W-2 with no FWT or SWT<<

Maybe the income is below the withholding limit, especially if the minister is claiming several exemptions.

[veritas]

Since fica taxes were witheld

I would assume this is a church worker subject to the same rules as all other employees.

Often I have seen organists and janitors where no federal or state taxes are witheld. I have been involved with the internal workings of churches and they are often misinformed when it comes to taxes and payroll, not to mention just about everything else business related. They are very reliant on volunteer help and don't always seek professional advice.

[sandysea]

LCP by favorable tax treatment...

Do they mean the tax preparer is going to file the w-2 as self employed for the minister? This is the only type of "favorable" treatment I can think they are willing to give. If the minister got a W-2 with WITHHOLDING of FICA/MED, then they are not considered a self employed minister for tax purposes. If the W/H was not made, then another tax accountant may take the position that they are ministers and to be treated as Sch C for tax purposes with Form SE....either way, the employee seems to be an employee at this point and just because FWT and SWT was not w/h could mean that her W-4 did not indicate it was necessary

[WhiteOleander]

Do they mean the tax preparer is going to file the w-2 as self employed for the minister? This is the only type of "favorable" treatment I can think they are willing to give. If the minister got a W-2 with WITHHOLDING of FICA/MED, then they are not considered a self employed minister for tax purposes. If the W/H was not made, then another tax accountant may take the position that they are ministers and to be treated as Sch C for tax purposes with Form SE....either way, the employee seems to be an employee at this point and just because FWT and SWT was not w/h could mean that her W-4 did not indicate it was necessary

If they are actual ministers, they are considered "dual status" T/Ps. They do not have the option of having FICA withheld.

They are considered employees for income tax purposes, and Self Employed for SE purposes. They cannot get a W-2 for their pay from their church/es and deduct their expenses on a Sch. C. They have to deduct their expenses on Sch A as any other employee. Then they report their W-2 income on the Sch SE and pay the SE tax.

If they also earn income on their own separate from their church, then that income is filed on the Sch C with all the rules that go with that.

[Bonnie]

If they are actual ministers, they are considered "dual status" T/Ps. They do not have the option of having FICA withheld.

They are considered employees for income tax purposes, and Self Employed for SE purposes. They cannot get a W-2 for their pay from their church/es and deduct their expenses on a Sch. C. They have to deduct their expenses on Sch A as any other employee. Then they report their W-2 income on the Sch SE and pay the SE tax.

If they also earn income on their own separate from their church, then that income is filed on the Sch C with all the rules that go with that.

I agree with this reply. Ministers should receive a W-2 with wages in box 1 and possibly an amount for housing allowance in box 14. Other than that they do not have anything else withheld. Income goes on 1040 line 7 and they do a Sch SE to pay the SS and MC tax. Possibly the church is not handling things correctly.