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Practice Management

Should a Self-Employed Minister Open a 403(b)(9)?

Q. A self-employed minister who receives Forms 1099 is considered to be their own 501(c)(3) employer and could have contributions made into only a 403(b)(9) account. But it might be just as easy for the pastor to open an individual IRA for what little he will be putting into it. Is there any benefit for him to open a 430(b)9?

A. The benefits of a 403(b)(9) would be: (1) housing allowance distribution; (2) all investments permitted; (3) special 415 contribution rules; and (4) naming a trustee from the church, in lieu of a custodian. If the minister is not going to use those benefits, then an IRA works.