What can happen to ministers who incorrectly file their income tax returns as self-employed instead of as employees?

The IRS can reclassify ministers as employees for income tax purposes if the IRS decides they should have filed their returns as employees instead of as self-employed taxpayers. Remember that employees can deduct business expenses only if they can itemize and only to the extent their business expenses exceed 2% of their adjusted gross income. If the IRS reclassifies a minister as an employee, the minister may lose business expense deductions and could owe back taxes and penalties to the IRS.

For more information, visit GuideStone.org/TaxGuide 

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