Don’t Miss the Oct. 15 Tax Extension Deadline
Don’t miss the Oct. 15 Tax Extension Deadline Did you file an extension for your 2020 federal income tax return? If so, you have about 2-weeks remaining to file your individual return, as it is due on or before October 15, 2020. A tax extension gives you additional time to file but does is not…
I Haven’t Received Our Stimulus Check
I Haven’t Received Our Stimulus Check Many clergy are finding that they are getting direct deposits for only a portion of what they think their stimulus payment should be. Some have gotten half of their payment deposited one week and half the next, and others are finding that their dependents’ share of the stimulus money…
Understanding Form 941
Understanding Form 941 Churches file Form 941 four times a year to report income taxes, social security tax, or Medicare tax withheld from employees’ paychecks. As the IRS explains: “Federal law requires you, as an employer, to withhold certain taxes from your employees’ pay. Each time you pay wages, you must withhold — or…
Church Budgeting
Church Budgeting As the fourth quarter of the year approaches, churches that follow the calendar year as their fiscal year should begin the 2022 budgeting process. Especially for churches with large and complex budgets, the process should begin early in the fourth quarter. The church’s bookkeeper can help take the current year-to-date income and expense…
Tax responsibilities with starting a business
The tax responsibilities with starting a business Small business owners have a variety of tax responsibilities. The IRS knows that understanding and meeting tax obligations are vital to the success of all businesses, especially a new one. IRS.gov has the resources and information to help people through the process of starting a new business. Here…
How to Set Church Compensation Amounts
How to Set Church Compensation Amounts How does a church go about determining the amounts it should pay its ministers and other employees? Church boards, or those to whom they delegate, must determine what amounts to pay each staff position. The experience and competence of those making the decisions vary greatly from church to church….
Repairs vs. Improvements – Rental Property
Repairs vs. Improvements When you rent out a room in your home or you become a landlord of rental property, you’re entitled to deduct or depreciate your landlord expenses. Among these are the cost of improvements and repairs to the space you rent out. Whenever you fix or replace something in a rental unit or building…
Should I have a Social Security Allowance?
Should I have a Social Security Allowance? While ministers are employees for federal income tax reporting purposes, they are self-employed for Social Security purposes with respect to services they perform in the exercise of their ministry. This means that they must pay both the employee and the employer share of social security tax under the…
Repay student loans up to $5,250 tax-free
The Coronavirus Aid Relief and Economic Security Act (the “CARES Act”) provides a way for churches to provide both tuition, books, supplies, and student loan payments tax-free through January 1, 2026. Generally, a Section 127 Education Assistance Plan only allows the church to pay or reimburse tuition and other qualified educational expenses. Section 2206 of the CARES Act modifies…
What is exempt and non-exempt employee?
Exempt and non-exempt are classifications under the Fair Labor Standards Act (FLSA). That’s the federal law requiring that most employees receive at least minimum wage for each hour worked and overtime pay for hours worked over 40 in a workweek. Usually, employees who are entitled to both minimum wage and overtime are called non-exempt. Those…
