MinistryCPA - Corey A. Pfaffe, CPA, LLC

Question:   Is it possible to opt out of Social Security after the 2-year deadline? Answer:  Unlike other employees, a licensed or ordained minister has the option to opt out of Social Security and Medicare (FICA). If a minister wants to opt out they must file Form 4361 by the tax deadline including extension, in the second year in which they have received ministerial income of $400 or more. This election is final, and the minister cannot opt back into FICA taxes.  At MinistryCPA, we have received questions from ministers who have exceeded the two year deadline and desire to opt-out. There have been several court cases which provide guidance in answering this question. Some have argued that the minister was unaware of the deadline, had mistakenly believed they had filed a timely election, were given incorrect advice by an IRS employee, or their opposition to participate in Social Security and Medicare did not arise until after the 2-year deadline had passed. In each of th...

Since the start of Covid-19, there have been several relief and forgiveness programs to help organizations and individuals that have experienced difficulties during the height of the pandemic. One of the relief programs is focused on forgiving penalties for individuals and organizations that did not file their tax returns on time. On August 24, 2022, the IRS extended the penalty relief for many who filed late tax returns. Individuals and organizations that file their 2019 or 2020 returns by September 30, 2022 will not have failure to file penalties assessed on their taxes. Not all individuals and organizations are eligible for the relief. Eligible returns include Forms 1040, 1041, 1120, 1120-S, 1065, 990-PF, and 5471.  Failure to file penalties will be automatically forgiven, and payments already made will be refunded by the IRS. If you have not filed your 2019 or 2020 tax return please contact us for assistance.