Limitations on the Housing Allowance
Limitations on the Housing Allowance After reading about the Housing or Parsonage / Manse Allowance, you may be thinking, “if I designate my entire salary as a Housing Allowance, would it all be excluded from federal income taxes?” IRS has already addressed this by limiting the Allowance to the least of the following: 1. The…
Should You Start a Nonprofit Organization?
Should You Start a Nonprofit Organization? There are numerous legal, financial, and administrative details required to start a nonprofit organization. A corporate entity must be formed with the appropriate state agency. This requires selecting an available corporate name. An Employer Identification Number is needed from the IRS, which will require some knowledge of anticipated activities…
Do you need to file a nonresident state return?
Do you need to file a nonresident state return? Generally, you’ll need to file a nonresident state return if you made money from sources in a state you don’t live in. Some examples are: Wages or income you earned while working in that state Out-of-state rental income, gambling winnings, or profits from property sales S…
Gathering documents for tax season
Gathering documents for tax season In preparation to file individual federal, state, and local income tax returns, this is the season to gather documents. Some of the documents need to be submitted with federal, local, and state tax returns, and will therefore be needed in the immediate future. Other documents should be retained by the…
Don’t miss the 100% meals deduction
Don’t miss the 100% meals deduction The Consolidated Appropriations Act, 2021, increased the business-meal deduction for the cost of food and beverages provided by a restaurant from 50 percent to 100 percent in 2021 and 2022 if certain conditions are met. The IRS on April 8 issued Notice 2021-25 to provide guidance on the higher limit for…
Can the church pay student loans tax-free?
Can the church pay student loans 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. The Coronavirus Aid Relief and Economic Security Act (the “CARES Act”) of IRC Section 127 allows churches to reimburse up to $5,250 per employee, per…
Commuting expenses deductible?
Commuting expenses deductible? You cannot deduct the costs of taking a bus, trolley, subway, or taxi or driving a car between your home and your main church or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your church or regular…
Understanding Clergy W-2 Form
Understanding Clergy W-2 Form By January 31st, an employer must give or mail an employee’s copies to each employee from whom the tax was withheld during the year or wages paid for services. For employees whose employment ends before the end of the year, W-2 Forms can be supplied any time after employment ends, but…
Nontaxable income for clergy?
Nontaxable income for clergy These are examples of sources of income that are non-taxable: • Qualified love gifts (person-to-person and within limits) Cannot be solicited Must be spontaneous in nature Must be clearly ascertainable as a gift with no service attached Cannot qualify as a tax donation for the donor Are motivated out of affection…
Should we have a COVID section in our employee handbook?
Should we have a COVID section in our employee handbook? While COVID will continue to affect our workplaces for some time, we generally recommend not adding COVID policies directly to your handbook. Guidance from the Centers for Disease Control and Prevention (CDC) continues to evolve, and federal and state laws related to the pandemic will…
