The new minister does not have any tax liability for the previous year since he is new to the country. Does he still have to pay estimated taxes?
The minister has just arrived USA on R1 full time employment work permit visa. He is provided with lodging at the church and his taxes are not withheld.
As Mr. Nielsen suggests, it is not a matter of what is required so much as what is prudent.
If you go all year without paying estimated taxes each quarter, your going to potentially have a large tax obligation at year's end. As life happens, most people fail to put aside enough money to pay these amounts in one shot. Therefore it is much better to put the money aside as you are paid.
One caveat is that if you meet with an accountant and go over the amounts you earn and the amounts of exemptions/deductions you'll likely qualify for and your tax burden will be small at year's end, then perhaps you can plan for it throughout the year and save that money without doing the estimated payments.
There are too many unanswered questions. What is the "new minister's" immigration status? Does the minister have a work visa? What is the nature of his employement agreement with his church? Is being provided a "parsonage allowance." Has he made the appropriate elections to avoid being taxed?
The taxation of ministers is a highly specialized area which is complicated by the minister's immigration status. You should contact a tax attorney and a immigration attorney before you will have a complete answer to this questions.
Phillip M. Smith Jr.
Los Angeles Tax & Business Attorney
Licensed in the United States Tax Court
Main: 323-292-4116 ❘ Cell: 562-505-1004
THESE COMMENTS ARE NOT LEGAL ADVICE. They are provided for informational purposes only. Actual legal advice can only be provided after consultation by an attorney licensed in your jurisdiction. The answer to question does not create an attorney-client relationship or otherwise require further consultation. Mr. Smith is licensed to practice law throughout the state of California with offices in Los Angeles County. He is authorized to handle IRS matters throughout the United States, and is also licensed to practice before the United States Tax Court. His phone number is 323-292-4116 or his email address is firstname.lastname@example.org.
Generally, estimated taxes are only required when there is a pattern of prior tax liabilty but if you anticipate owing taxes and they're not withheld then you'd probably want to make estimated tax payments even if you're not required to do so to avoid any potential penalties at the end of the year. As noted, a consult with a tax attorney would probably be warranted.
Evan A. Nielsen is licensed to practice law in California. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.