Taxpayers who report their federal income tax returns as self-employed persons are more likely to be audited by the IRS. IRS data show that self-employed people are less likely to report their income correctly than employees. Remember that ministers who have income from only one church are likely to be viewed as employees for income tax purposes by the IRS. Churches should issue a Form W-2, not a Form 1099, to minister employees. As explained earlier, ministers often have a dual tax status and will pay SECA taxes on their ministerial earnings, but most ministers should file their tax returns as employees and should receive a Form W-2 from their church.

For more information, view our Ministers Tax Guide.