CLERGY TAX

            We are at the beginning of a new year. Of course, in the church world, the appointment year started July 1^st. The church year started at the beginning of Advent, but the rest of the “world” looks at January as the beginning of a new year.

            In the “world of taxes”, look at December 31^st as the end of the year, and realize that what has happened before is going to affect what goes on in the new year. Taxes, tax forms, etc. all come into play.

            Now that the 2022 year has finished, you will be receiving a W-2 form, reporting your taxable wages, any housing allowances and exclusions, and any federal or state income taxes that you had withheld. What has been and has been reported will be used to prepare your income tax returns. There’s really no chance to make any changes that will help you at this point.

            However, now is the time to work your tax professional to do a projection for 2023, and see what you can do to minimize any payments you have to make.

• ·         Should you have federal and state income taxes withheld from your paychecks?
• ·         Should you pay quarterly estimated taxes?
• ·         Have you claimed enough as housing allowance/housing exclusions?
• ·         What is the amount of self-employment tax you’ll have to pay, and how can you spread out the payment of those taxes?
• ·         Are you tracking your business expenses, submitting them to the church for reimbursement, and providing unreimbursed amounts to your tax preparer?
• ·         Are you tracking your “business” mileage?

            All of these questions are important to consider and answer and work on now while you can make changes and decisions that will help you for 2023!

 

           

Please feel free to contact me at (315) 427-3668 or susanranous@unyumc.org if you’d like help with projecting tax consequences based on your income, deductions, etc.!