W-4 Instructions for Clergy
The W-4 form consists of five steps. Since not every step applies to all employees, some sections may justifiably be left blank. Step 1 Clergy and non-clergy individuals must provide personal information, ensuring that the name, address, and Social Security number entered match the records on file with Payroll. This section also requires you to…
IRS guidelines on designating a housing allowance
The IRS guidelines on designating a housing allowance for clergy are detailed and specific. Here is a comprehensive overview: Designation of Housing Allowance Advance Designation Requirement: The housing allowance must be officially designated in advance of payment by the employing church or other qualified organization. This designation can be made in an employment contract, in…
Can I deduct ministry related meals?
Meals related to ministry activities can be deducted for tax purposes under certain conditions. The relevant IRS guidelines and criteria for deducting such expenses, including specific requirements or limitations that apply to clergy or ministers, are as follows: Ordinary and Necessary Business Expenses: Under § 162(a) of the Internal Revenue Code, ordinary and necessary expenses paid or…
History of dual status for clergy
History and development of dual status for clergy members: Early 20th Century Pre-1954: Initially, clergy were generally treated as employees of their religious institutions. However, this treatment didn’t fully address the unique nature of their ministerial income and work arrangements. Introduction of SECA (1954) 1954: The Self-Employment Contributions Act (SECA) was introduced, making it mandatory…
Searching For A New Clergy Tax Advisor?
Selecting a tax advisor or accounting firm may initially appear straightforward. However, it’s important to understand the two types of professional services available in our industry. The first type is a “Generalist”, which prepares various tax returns for the general public. These providers may have limited experience with clergy returns, if any. As a result,…
Easy W-2 and 1099 Filing for Churches
Simplify Your Church’s Tax Filing with Clergy Financial Resources Clergy Financial Resources provides an effortless online e-filing solution, whether your church is big or small. Our intuitive service supports W-2 and 1099 form submissions, making the process simple, cost-effective, efficient, and secure. Hassle-Free Filing No Software Required: Your information is securely saved, making each year’s…
2025 Standard Mileage Rates
The standard mileage rate for transportation or travel expenses for 2025 is 70 cents per mile, up from 67 cents in 2024 for all miles related to your ministry or business. The standard mileage rate for charitable use is 14 cents per mile. The standard mileage rate for medical care or as part of a…
Charitable Contribution Substantiation Guidelines
To substantiate charitable contributions, taxpayers must adhere to specific requirements based on the type and amount of the contribution. Here are the detailed substantiation requirements: General Requirements for All Contributions Cash Contributions: Cancelled Check: A cancelled check can serve as proof. Receipt from Donee: A receipt showing the name of the donee, the date, and…
How to report honoraria income?
The best way to report honoraria income for clergy is to include it on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship). This allows you to report the income and deduct any related expenses incurred in performing the services. Here are the steps to report honoraria income: Gather Documentation: Collect all 1099-MISC…
Explain how qualified charitable distributions work
Qualified Charitable Distributions (QCDs) are a tax-efficient way for individuals to donate to charity directly from their Individual Retirement Accounts (IRAs). Here’s a detailed explanation of how QCDs work, including eligibility criteria, tax treatment, and limitations or special rules that apply: Eligibility Criteria Age Requirement: The IRA owner must be at least 70½ years old…
