DALLAS — Ministers for tax purposes will receive a small
financial benefit from the recent tax compromise legislation signed by
President Barack Obama December 17. Their SECA Social Security tax rate will
fall from 12.4 percent to 10.4 percent for 2011 only.
The additional Medicare
tax rate of 2.9 percent remains in effect. Ministers for tax purposes will see
their total SECA tax rate drop to 13.3 percent for 2011 only.
American workers in general will also receive a one-year 2
percent cut in their Social Security taxes under the Tax Relief Unemployment
Reauthorization and Job Creation Act of 2010. The bill — a compromise between
Republican congressional leaders and the White House — keeps the “Bush tax
cuts” in place through 2012. Additionally, it extends some unemployment
benefits and reduces the 6.2 percent OASDI (old age, survivors and disability
insurance) tax rate to 4.2 percent for 2011 only.
Ministers normally pay the 12.4 percent OASDI portion of
their SECA tax because of their “dual tax status” as self-employed for Social
Security tax purposes. The total OASDI portion of their SECA tax represents the
combined employer and employee OASDI tax rates.
The cut in Social Security taxes is for the 2011 tax year
only and will not impact any SECA taxes owed for income earned in 2010.
GuideStone will be releasing the annual Ministers Tax Guide
in February 2011, which provides specific information regarding ministers’
unique tax status as well as tips on filing a minister’s 2010 tax return. It
will be found online at www.GuideStone.org/taxguide, and participants can
request a free printed copy by calling GuideStone at (888) 984-8433. Orders can
be placed now for the tax guide, and they will be shipped once they are
For specific information regarding the 2011 Social Security
tax reduction, GuideStone encourages its participants to consult with a tax or
legal adviser who is versed in ministerial tax issues.
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