Tuesday, April 17, 2012
Render Unto Caesar: The DIY Edition
Today is everybody’s favorite day: our tax forms are due! Since April 15 fell on a Sunday this year, and April 16 is a holiday in D.C., it means we got a two-day reprieve in 2012.
Because I am an enterprising, vaguely intelligent person (but also because I’m thrifty), I decided to do my own taxes for this year. So in January, I gave myself a birthday present and ordered a clergy tax guidebook to help me create my own do-it-yourself clergy taxes kung fu.
See, not to toot my own horn, but I’m one of those (apparently rare) clergy who is NOT comically inept at math. I actually got pretty good grades in math until high school, by which point I had stopped caring entirely about what x equals if y is equal to 47 bajillion over 6z.
But…I told myself that doing my own taxes would be NOTHING like algebra. I told myself, “Eric! You exercise the verbal parts of your brain every day for work, but you only do heavy mathematical lifting during budget season! It’ll be a good stretch of your mental muscles!” And perhaps most importantly, I told myself that I simply did not want to shell out the money to hire an accountant (see also: I’m thrifty).
Now, I alluded to this reality in a previous entry a few months ago, but…it turns out that clergy taxes are really, really, complicated. As in, algebra-on-steroids complicated.
There are parsonage allowances and costs of ministry, but the biggest tax complication for clergy is that we’re considered employees for income taxes, but self-employed for Social Security and Medicare taxes (why are we considered self-employed when the name portion of the remitter on my paychecks says, “First Christian Church?” I don’t know. I’m just the pastor). Functionally, this means that it is illegal for my parish to withhold taxes from my paycheck for Social Security and Medicare AND for them to pay the 7.65% employer portion of those taxes. Instead, I make quarterly tax payments to the IRS which cover the entire 15.3% myself, using the 1040-ES form.
But I didn’t realize that when I started here back in September—that I was supposed to file a 1040-ES. So, I was thrilled when I saw that my SS/Medicare taxes were due on January 15 of this year and I hadn’t had any paperwork—W-2’s, anything—attesting to my earnings.
And that’s how I spent the first two weeks of 2012 frantically ensuring I didn’t owe any back taxes/wondering if I would get pinched for tax evasion in my first year as a senior pastor.
The funny thing is, now that I have done it all once, and feel like I have some semblance of an idea of what I am doing, it makes me even less willing to pay for an accountant to do my taxes.
Because I’m thrifty. And possibly masochistic.
Please feel free to draw your own conclusions about my mental faculties and my ability to objectively evaluate the limits of said mental faculties based on this story.
Happy Tax Day to all my fellow rendering-unto-Caesar worker bees out there!
Yours in Christ,