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Wish I could be the lucky one asking this question, but a friend of mine has a wife that earns a lot of money. So he went to work for the Church School, as a monitor. Made only $2,900, but had more fun than you could imagine. If a Church is a Non-Profit Organization, is his wages taxable ?? They took out no Federal or State Income Tax, which could be a result of his W-4 and low earnings.

Is income earned from a non-profit (or is it a not-for-profit) organization exempt from Income Tax.

Thanks for your input, and hope all paid the $30.00 fee to help answer my question.

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Income earned from a non-profit organization is not exempt from income tax. However, certain church employees are exempt from income tax and social security/medicare withholding. These employees have to make estimated tax payments and treat their salaries as self-employment income. Finally, if your friend's projected annual earnings were low enough ($2900/year is low enough) and this were his only income, there would be no income tax due (below standard deduction and personal exemption amounts).

Ira
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Finally, if your friend's projected annual earnings were low enough ($2900/year is low enough) and this were his only income, there would be no income tax due (below standard deduction and personal exemption amounts).

The friend in question has a wife, so wouldn't this only be the case if they file married filing separately?
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The friend in question has a wife, so wouldn't this only be the case if they file married filing separately?

The point I was trying to make is that the payroll department of the church doesn't know anything about a wife or other income, unless the employee tells them by way of what is on the W-4. Without that knowledge, they can only assume that he is not earning enough to require withholding.

Ira
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