Employee tax question

[Donyea Jenkins]

If an employee told me he wanted to be a 1099 and have his wages sent to his church and they were going to take care of his needs, would the employee still have to pay takes on his wages?

[Jason Malabute]

Yes, the employee would still owe taxes. The IRS's assignment of income doctrine says earned income is taxable to the individual, even if paid to a third party (like a church).

Also, 1099 vs. W-2 status isn’t a choice—the IRS determines it based on work conditions. Misclassification can lead to tax penalties.

Donating to a church is fine, but tax-deductible donations have limits (usually 60% of AGI), so sending all wages wouldn’t fully offset taxes. And this deduction should be reported on the return of the employee requesting it. Consult a tax pro to avoid IRS issues!