Clergy

[HV Ken]

We have a clergy client - opts out of Social Security, receives a housing allowance. Went through 1040 Clergy worksheets.

Anyway, client tells us he was told he could deduct his charitable giving against his SE tax calculation.

We want to make sure we aren't missing something here. Is this legit?

Thanks!

[grandmabee]

but I thought he opted out of SE?

[chadlonetree]

It depends upon the structure. Many denominations or individual churches count the "tithe" of a minister as a required fee (must be stated in bylaws or resolution). In this case it isn't SCH A charitable contribution but a "license fee" that can be claimed on 2106.

[MAMalody]

While I agree with the conclusion of chadlonetree, I must admit that I have never seen where a church required in writing any specific amount of contributions and the only denomination that comes close to the required contributions mentioned by chadlonetree has been the AGs. This is just an observation and does not change the answer.

[kcjenkins]

If he has a valid 4361 to opt out of SS taxes on file, then there is nothing to offset, now is there? You just check the box at the top of the Sch SE.

If he does not have an approved 4361 then he can not avoid the SE tax, but he MIGHT be able to put the tithes on his Sch C or 2106, IF his denomination REQUIRES that he tithe in order to be employed as a minister, as some do, then he can deduct them as a business expense. In such cases, I put them on the line for 'Returns and Allowances'.

[HV Ken]

Thanks for all the replies. I mis-spoke about opting out. What I meant was he has no taxes or social security withheld. At any rate, the question was answered with the replies - so thanks to all! Too tired and typing too fast....