Dual-status. Housing allowance. We know the rules.
Housing-allowance designations that hold up. SECA vs. FICA called correctly. Form 4361 advised on its real consequences. A tax preparer who has actually read §107 and §1402.
An undocumented housing-allowance designation is fully taxable. A Form 4361 filed without understanding what it really gives up — Social Security retirement, disability, survivor benefits — is a decision that can't be reversed. Dual-status (W-2 for income, SE for SECA) misread by a generic preparer is a CP2000 every other year.
How we fix it.
Status review
Common-law employee for federal income, self-employed for SECA. Confirmed and documented annually. Form W-2 properly coded.
Housing allowance
Designation by the church board IN ADVANCE, in writing. Excluded from federal income but included for SECA. Tracked against actual housing costs.
Form 4361 counsel
For ministers considering the SECA exemption — full counsel on what is given up. Filed only when the trade is informed.
Annual return
1040 with proper clergy Schedule SE, dual-status reconciliation, mission/love-gift income parsed, professional expenses on Schedule C where appropriate.
Why us for pastors & clergy.
IRS Enrolled Agent, enrolled to represent taxpayers before the IRS in all 50 states, alongside CPAs and attorneys.
Finance training: the math behind every recommendation we make. Currently in law school.
§107 housing allowance — exclusion done right.
Three rules: designated in advance and in writing by the employing church; actually used for housing; capped at the fair rental value. Any one missed, the entire exclusion goes. We help the church board document it.
Form 4361 — the irreversible SE exemption.
Form 4361 exempts you from SECA on ministerial earnings — but it's permanent, and it forfeits Social Security retirement, disability, and survivor benefits. We do not file 4361 without a full counseling conversation. Many ministers regret it.
SECA on housing — the surprise most preparers miss.
Housing allowance is excluded from federal income tax. It is NOT excluded from SECA. Most non-specialist preparers exclude it from both, and the IRS catches the SECA underpayment two years later via CP2000.
Pricing, on the page.
Published prices · Quoted in writing before any work startsHow it works: one annual fee, half paid at engagement and half before your return is filed. Everything past the package baseline is a published add-on at a fixed price, so nobody counts forms. Books, payroll and sales tax are the only monthly items, because they are the only monthly work. See the full grid and every add-on or get your price in a minute.
One practitioner. Every file, personally led.
Cody is an IRS Enrolled Agent with an MBA — a solo practitioner with a small support team, working out of Lakeland, Florida. He is also currently in law school.
Every client engagement is led by Cody personally. The firm stays deliberately small so the work stays deliberately careful — and so when the IRS calls, the person who picks up is the person who filed your return.
Common questions.
If yours isn't here, ask it on the intake — we read every one before the first call.
How do I set up housing allowance?
The employing church's governing body designates the allowance in advance, in writing, before any pay period it covers. We draft the resolution. Retroactive designations don't work.
Should I file Form 4361?
Rarely. It exempts you from SECA on ministerial earnings — but forever, and it removes you from Social Security. Most ministers come to regret it later. We counsel before we file.
What's dual-status?
Clergy are employees for income-tax purposes (W-2) but self-employed for SECA (Schedule SE). It's not optional — it's how the code is written. Most preparers don't know this.
What if I get love gifts or honoraria?
Generally taxable income. Honoraria for weddings, funerals, speaking engagements are 1099 / Schedule C income — and SECA applies.
Can I deduct ministry expenses?
Work-related business expenses generally yes, but with reduction for the housing-allowance ratio. We compute it.
My church doesn't know how to do my W-2.
We provide guidance to the church's bookkeeper or treasurer. Box 1 is wages, Box 14 has the housing allowance reported but not included. Boxes 3, 4, 5, 6 are typically blank for clergy. Common errors; easy to fix.
Related
Ministry is calling. The tax code shouldn't ruin the call.
Send last year's W-2 and return. We'll review on the first call.