Five Quick Facts about Gift Tax
Gift tax is paid by the giver, not the recipient. If Uncle Bill decides to give you $20,000, you do not need to pay any tax on it. It would be Bill’s responsibility to report that gift to the Federal Government and to pay the taxes. In 2019, the annual exclusion limit is $15,000. This…
Housing Allowance: What if I have two homes?
Even if you own two homes, you can only use housing expenses of one home for the housing allowance. A federal appeals court in 2012 ruled that only housing expenses for your principal residence can be used for your housing allowance, even if you are paying on two homes. However, this does not prevent you…
Outside Employment Policy – Employee Handbook
Employees may engage in outside employment during non-working hours, provided doing so does not interfere with their job performance or constitute a conflict of interest. Prior to accepting outside employment, employees should notify their manager in writing. The notice must include the name of the Company, the title and nature of the position, the number…
Church-Owned Parsonages- Don’t Forget the Fair Rental Value and Utilities!
Members of the Clergy who live in church-owned parsonages get to exclude the fair rental value of their home and utilities paid by the church from their income when calculating income tax. However, they must add these amounts back into income when calculating self-employment taxes. This can come as a surprise to those who have…
Clergy can still deduct unreimbursed business expenses
It used to be that if you paid for business expenses out of your own pocket, you could deduct them on Schedule A. When the Tax Cuts and Jobs Act passed, it eliminated the ability to deduct unreimbursed business expenses on Schedule A for all taxpayers… Fortunately, there is still another way to deduct some…
Employee Expense Reimbursements
The compliance and financial risks of mishandling employee expense reimbursements have spiked in recent years. And the IRS is in the middle of a wide-ranging audit crackdown on employment-tax issues. Would your books survive an IRS spot-check? Do you know which reimbursements for employee expenses should be treated as expenses … and which as compensation?…
3 Tips for Paying Estimated Taxes
Tip # 1: Make your payment on time. The US has a pay-as-you-go tax system, meaning the IRS expects you to make smaller payments of your tax liability through-out the year rather than waiting until the end of the year. If you don’t make quarterly payments and just decide to pay in a lump sum,…
Hobbies versus Businesses
Many of us engage in arts or crafts, but when do you have to start reporting your work as a business to IRS rather than a hobby? The key feature that sets a business apart from a hobby is that a business is done in order to make a profit. The IRS will generally treat…
Home Equity Loans and Second Mortgage Loans Must be Used for Housing Expenses to Qualify for the Housing Allowance
If you managed to pay off your home mortgage this year, congratulations! However, you may notice that you have a lot fewer expenses to claim for your housing allowance at the end of the year. With less housing expenses, you also have less income exempt from income tax, and your tax bill may go up…
Turbocharge your 403(b) Savings
In 2019, you can elect to contribute up to $19,000 to your 403(b) account out of your salary. If you are age 50 or older at the end of the year, you can also make a catch-up contribution of $6,000. In total, you could contribute up to $25,000 to your 403(b) account. Why is this…
