As your church grows, the way you conduct your church business may change and therefore the procedures of your employees may change as well. Employee handbooks are always a working document with natural change due to federal and state laws. Your employee handbook should be reviewed and updated no less than annually to avoid your…

2018 Housing Allowance Form The allowance must be officially designated in advance by the church. The designation should be stated in writing, preferably by resolution of the governing body and/or in an employment contract. In addition, the designation should be recorded in the church budget and payroll records. If the only reference to the housing allowance is…

When the United States began, most pastors lived in church-owned parsonages, and the US carried over the common European practice of not taxing that as income. The basis of the housing exclusion from taxable income is deeply rooted in our nation’s tax history. In 1954, the provision was expanded to include the “cash” rental allowance paid…

Churches normally hire an interim minister for the time between the departure of a pastor and the calling of a new pastor or a “sabbatical interim pastor” when a pastor is granted sabbatical leave. Full-time, interim ministers are usually paid on the same scale as other fulltime clergy. For part-time service, the percentage of time…

Generally, any expense to provide or maintain the home can be used to justify the housing exclusion. Regulations do specifically state that expenses for groceries, paper products, personal toiletries, personal clothing, and maid service cannot be used. You may legitimately include the following: (1) rent, principal payments, or down payments plus the cost of buying…

Yes, an employee may submit a new W-4 anytime they have changes. Often, they’ll submit a new form when they know they’ll be changing exemptions, adjustments, deductions, or credits on their return. For example, an employee may want to increase their withholding by decreasing the number of dependents they claim. Or they might want to…

Contributions to charity and deductible expenses are deductible when charged to your credit card, rather than when you pays the credit card bill (Rev. Rul. 78-38; Rev. Rul. 78-39). Such expenses charged in December will be deductible in 2017, even though the credit card bill is not paid until 2018.

I can’t file my return on time You’re allowed to get an automatic six-month extension if you file Form 4868 by April 15th, the due date of your return.  Instead of filing Form 4868, you can apply for an automatic extension by making an electronic payment by the due date.  Keep in mind that an…

This decision does not come as a surprise as the same judge issued a similar ruling back in 2013 before the case was dismissed by a higher appeals court on the technical grounds of standing. At this point, the court has issued its ruling simply declaring the housing allowance is unconstitutional but without any damages…

The IRS says taxpayers who have a filing extension through Oct. 16 should check their returns for often-overlooked tax benefits. When they are ready to file, the IRS recommends they file their return electronically using IRS e-file. Both are still available for taxpayers who still need to file their return. Although Oct. 16 is the…