There is an old saying that pairs death and taxes together as the two things that are the most certain. But for whatever reason seminary prepared me ten times better for death than for taxes. During school, taxes came up briefly and sporadically, enough to convince me that a pastor’s tax situation is more complex than the doctrinal fine points under consideration at the Third Council of Constantinople. Still here is what I have gathered so far:
As a pastor I am considered self employed at points and employed at others. I get a housing allowance that affects one part of the tax code but is totally null and void on the other. If I work from home I might get some deductions or I might not. I don’t pay in monthly and my church doesn’t deduct taxes on my paycheck. Instead, under particular and very vague circumstances, I am required to pay in quarterly. If my church doesn’t reimburse me for all my mileage and expenses I can deduct the remaining, but only if I kept certain records all throughout the year, except in other cases where there are “standard” deductions. Oh and if you live in a parsonage it just throw the whole thing caddywhompus. To make things worse last year my wife and I lived in two states and had 4 different incomes.
To make a long story short, we should have just hired an accountant but our beloved accountant lives a couple state lines away and we were unable to find a new one that didn’t charge us less than $250. Since we didn’t do the quarterly payments, we figured we owed something and didn’t want to pay more than that to have an accountant tell us we owed something.
So we bought Turbo Tax.
For those of you unfamiliar with Turbo Tax, the program keeps a very enlightening running tally of your “refund” at the top of the screen that changes with each data you input. It started by having me list my dependents. After doing so the “refund” tally drove up into the tens of thousands. Then it had me put in the W-2s, after which the “refund” very quickly decreased down to 0 and kept going into the red for several more thousands of dollars, passing “the shirt off your back” until it eventually bottomed out at “One arm and one leg.”
I made a snap judgment that we would give Uncle Sam my wife’s leg and my son’s arm. I worked some more on trying to find other deductions without much luck until my wife entered the room and I explained to her that she would have to give her leg to Uncle Sam. She was notably taken aback and asked, “Why MY leg?”
“Well I need mine,” I scoffed because it was obviously true. She didn’t find it either obvious or true or funny. So we settled on my daughter’s leg and my son’s arm. After all, I heard somewhere that if you lose a limb before a certain age it grows back. They would be fine.
But be that as it may our “refund” eventually came to $6500 that we owed. We went over that number two or three times and found no solace. So we stewed about it for a couple days as I came to peace with it all and went to pay the amount.
Very reluctantly and with tears in my eyes I hit the “file” button on Turbo Tax thinking that would settle it. It didn’t.
After getting my banking information, my online pin and signature, and having me save a PDF of all forms, I went to hit the “file” button again, only to have it list three errors that were needed before I could file. The first had to do with the EIN number of my daughter’s preschool. The second had to do with a misunderstanding of a state rebate last year. The last had to do with some obscure worksheet whose very existence confounded me. I studied it and entered the number I thought most accurate and miraculously saw our payment halve.
This threw me into a panic because I had little to no idea what had happened. So we started over from scratch, did the whole thing again, got to that form again and entered the number we thought most accurate only to see it give us roughly the same amount.
To do this day I have no idea what happened with that form or even if what I did was technically legal. So I googled “odds of getting audited by IRS” and found scores of articles claiming that the IRS’s budget has been cut so drastically that they could no longer afford auditors! This was a welcome relief. To add to it, Turbo Tax claimed my “risk of audit” was incredibly low, presumably because a few thousand dollars isn’t worth the audit when you don’t have many auditors lying around.
Still, because I am one of those Evangelical Millenials with a perpetually guilty conscious, I am almost certain I am going to get audited. I can just picture it now. My wife and I sitting in the IRS office as a very skinny and short man in a gray suit with small rimmed glasses pours through our financial documents looking for the justification to remove our limbs for King and Country. My wife and I will sit there nervously babbling about why we did what we did, trying to make light of the whole thing with nervous laughter.
He won’t be amused but I am not scared. After all, while he digs through those documents, I am sure he will find a sermon in there somewhere!