IRS Releases New Tax Withholding Estimator
The IRS has released an enhanced Tax Withholding Estimator that incorporates changes from the redesigned Form W-4, Employee’s Withholding Certificate. The new Form W-4 includes changes that can affect employees’ refunds or the amount of tax they owe. For example, income tax withholding is no longer based on the employee’s marital status and withholding allowances,…
Who qualifies for “Clergy Status”
The employing congregation, denomination, integral agency of a denomination or a church, or religious organization is responsible to determine whether an individual qualifies as clergy status under the federal law definition. Having “minister” in the title or ministerial duties in a job description is not enough. The IRS uses the five criteria listed below to…
Common Payroll Errors to Avoid
Let’s face it. Managing church payroll – and the avalanche of payroll regulations – means you’re under a lot of scrutiny, and you have to get it right. Each year sixty percent of the church W-2 forms are reported with errors. This is created by the lack of understanding of the reporting requirements of taxable…
How do I report income that straddles two years?
With the end of 2019 approaching, we frequently receive questions about income split between different years. “My church is paying for my moving expenses. They gave me a two checks for $1,000. Can I wait to cash one or both until January 1st so the payments go on next year’s tax return?” “My Church was…
FAQs on the 2020 Form W-4
1. Why redesign Form W-4? The new design reduces the form’s complexity and increases the transparency and accuracy of the withholding system. While it uses the same underlying information as the old design, it replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees. 2. What happened to withholding allowances? Allowances are no…
It’s here! IRS rolls out final Form W-4 for 2020
The IRS has released the final 2020 version of Form W-4, Employee’s Withholding Certificate. The IRS stood its ground and dropped the word “Allowance” from the title of the form, as well as dropping withholding allowances from the body of the form. Filling out and submitting a Form W-4, Employee’s Withholding Allowance Certificate, the Employee’s…
Handbook Purpose
This Employee Handbook is intended to inform employees about the philosophy of the church, employment practices, policies, and benefits, as well as the conduct expected from employees. While this handbook is not intended to be a contract, it does include important guidelines that employees are expected to understand and follow. Except for the at-will employment…
The Ins and Outs of Conducting Background Checks
Have you considered conducting background checks as part of your hiring process? The practice is fairly typical within the church and for those who work with children, the elderly, or people with disabilities. If you’re wondering whether you should do so as well, check out our overview of the process below. Identify the reason for…
How does an inheritance get taxed?
If you recently received an inheritance, you may be wondering if you have any tax obligations. Fortunately, except for very large estates, most people will never have to pay any sort of tax on their inheritance. Estate tax is calculated based on the value of the deceased’s assets at time of death. This is usually…
What is the Housing Allowance?
The Clergy Housing Allowance is a portion of a Minister’s pay that has been designated to pay housing expenses. It is considered one of the best tax benefits currently available to Clergy because this portion of income can potentially be exempt from income taxes. In order to determine how much of the Clergy Housing Allowance…
