If you’re a pastor who occasionally speaks at a conference, teaches a seminar, performs weddings, or receives honorariums outside your church — congratulations!
That’s influence.
That’s impact.
It’s also taxable income.
And if you don’t track it properly, it can quietly create a tax problem you didn’t see coming.
Let’s talk through this in a simple, practical way.
First: Yes, It’s Self-Employment Income
When you earn money outside your church salary — even if you’re a full-time pastor — the IRS treats that income as business income. You can’t treat it like an under the table side hustle.
You’ll typically report it on:
- Schedule C
- And calculate self-employment tax on Schedule SE
That means it’s subject to:
- Federal income tax
- Self-employment (SECA) tax (15.3%)
And no — your housing allowance does not apply to this income.
The Biggest Mistake Pastors Make
They deposit the honorarium into their personal checking account…
Forget about it…
Then scramble at tax time trying to reconstruct what happened.
That’s stressful. And unnecessary. (I’ve made this mistake!)
Churches are not required to provide you with a 1099 form unless they pay you for services exceeding $2000 in the calendar year. Don’t count on them to track income for you.
A Better Way: Treat It Like a Small Ministry Business
You going to think this is crazy, but it really is the best option.
If you speak more than a few times a year, think of it as a small side ministry. Not complicated. Just organized.
Here’s what that looks like.
Step 1: Separate It
The cleanest move? Open a simple checking account just for outside ministry income.
Deposit:
- Speaking honorariums
- 1099 payments
- Teaching fees
Pay related expenses from that account.
Now everything is in one place. No digging through months of personal transactions.
You can also utilize accounting software or use spreadsheets.
The key is to accurately record income and expenses.
Step 2: Track Income Immediately
Every time you speak or teach, record:
- Date
- Organization
- Amount received
- Payment method
Keep digital copies of:
- Checks
- Payment confirmations
- Any 1099-NEC forms
Simple tracking prevents major headaches later.
Step 3: Don’t Forget Mileage (It Adds Up Fast)
Mileage is often the largest deduction pastors miss.
Track:
- Date
- Where you drove
- Purpose
- Miles driven
Use a mileage app or a simple spreadsheet. Just be consistent.
Step 4: Track Legitimate Expenses
You can deduct ordinary and necessary expenses related to that outside ministry, such as:
- Travel
- Lodging
- Business meals
- Conference registration
- Books and research
- Supplies
- Website costs
If the expense exists because of that speaking engagement, it likely belongs in your tracking system.
Keep receipts (digital is fine).
I’ve been through an IRS audit. I can’t tell you how important this is! Imagine having to find three years worth of receipts!
Step 5: Plan for the Tax Bill
Here’s where many pastors get surprised.
There is usually no withholding on speaking income.
That means you may need to:
- Make quarterly payments using Form 1040-ES, or
- Increase withholding from your church paycheck (Best option)
Many pastors prefer increasing withholding because it avoids quarterly estimates and reduces penalty risk.
Why This Matters
When tracked correctly, outside income:
✔ Lowers taxes through legitimate deductions
✔ Reduces audit risk
✔ Makes planning easier
✔ Keeps your ministry finances professional
When tracked poorly, it creates:
✖ Surprise tax bills
✖ Penalties
✖ Stress
And no pastor needs that in April.
A Simple Rule of Thumb
If you speak more than 5–10 times per year, treat it like a small business.
Not complicated.
Just organized.
Just documented.
Your future self (and your tax preparer) will thank you.
*Denominational district offices consider this as ministerial income subject to their tithe requirements.
Need help with tracking honorariums? Give us a call!