To the IRS a minister stands on both sides of the street at once, and almost everything churches get wrong in their payroll comes from that. Here's the rule and what the law doesn't allow.
Paying a staff pastor on a 1099 is one of the most common mistakes churches make, and it comes from reasoning that sounds airtight. Here's why it fails, and when a 1099 is in fact correct.
The housing allowance keeps the part of a pastor's salary that goes to his home out of income tax, and it costs the church nothing from the budget. How it's calculated and why it gets lost.
Form 4361 exempts a minister from the 15.3% for good, and there's no going back. What it actually requires, what it doesn't cover, and why most of the people who ask about it are already past the deadline.
