Social Security Tax for Ministers
Social Security can be many ministers biggest tax liability.
Two things will help significantly to reduce social security tax for all ministers who have not opted out: Properly using your Accountable Plan and using the correct kind of 403(b) retirement plan with strategies to help reduce the amount of Social Security tax you pay or even remove it all together.
Make sure your retirement plan is a clergy 403(b) plan that allows for tax-free housing allowance distributions. A properly set up clergy 403(b) reduces a minister’s tax on contributions and distributions. Learn more about the Clergy Advantage 403(b) plan if you’re not sure whether or not you have these fetures in your current plan.
And if you don’t currently have an Accountable Plan-now’s the time to start. It’s pretty simple and won’t cost your church anything to set up or maintain. Better yet, it will put money in your ministers pocket and provide social security tax reductions at the same time! We can help you set one up very quickly and simply. View our Ministry Expenses video to learn more or Social Security for Ministers for a more complete explanation of ministers Social Security issues. Contact us if we can answer any questions.