I have been offered a job at a church working in an office.?

Question

i will have to pay my own federal and other taxes, how do i find out what forms and how much I pay. I Know at the end of year I will File a 1099 misc. but can I pay quarterly so it is not such a big amount at the end of the year. I went to the IRS site but could not make since of it. Any help would be greatly welcome. Thanks

Answer 1

A church can elect to be exempt from FICA taxes (social security and medicare) on the paychecks they give their employees. Church employees in this situation pay self-employment taxes using form SE. These employees pay both sides of the FICA taxes. From a legal standpoint, these employees are still an employee (not a contractor), and they do NOT use schedule C to report their church income.

Some churches choose to withhold FICA. If they do this, 7.65% is withheld for FICA, and the also pays in 7.65% of the wages (the matching portion).

In both these cases, the income by church employees is subject to federal income tax, and the church can and should withhold federal taxes from the paychecks they issue.  Also, in both situations the church is required to give the employees a W2, not a 1099.

I don't see this as a reason to not take the job.  However, if the church has opted out of social security, it will cost you an extra 7% (or so) in taxes.  You simply need to plan accordingly, and negotiate the wages higher by 7-10% if you feel they are not high enough for the work that will be performed.

Answer 2

First, you should determine if you should be classified as an employee (W-2) or a contractor (1099). http://www.irs.gov/pub/irs-pdf/p15a.pdf will help you in this regard. Many employers try to treat workers as if they are contractors in order to avoid paying taxes on them. Just because the church is tax exempt itself, doesn't mean it's exempt from paying and withholding taxes associated with employees.

If you will be treated as a contractor, the see Publication 505, http://www.irs.gov/pub/irs-pdf/p505.pdf.

Answer 3

If you are an office worker at a church, you are an employee, get that--EMPLOYEE--and should have income tax withheld from you wages.  Your church may have declared that it has moral objections to Social Security and opted out.  This means they are cheap so and sos who are willing to cheat their employees by hiding behind a moral facade because their employees can't opt out and have to pay both halves of social security--this will work out to about 14% of your income before income tax.  Make sure this 14% is covered by extra income tax withholding or look for another church.