Time for Reform?
From 1984 through 2008, the Social Security payroll taxes paid by Americans exceeded the benefit payments made by Social Security. However since 2009, benefits paid have exceeded taxes collected, including a $51 billion shortfall in 2013 (source: Social Security). Clergy Financial Resources Home Clergy Financial Resources is a national accounting and finance organization serving churches…
Looking into the future?
More than half (56%) of 1,000 Americans at least age 25 that were surveyed earlier this year have never attempted (nor has their spouse attempted) to calculate how much they will need to accumulate for their eventual retirement (source: Employee Benefit Research Institute). Clergy Financial Resources Home Clergy Financial Resources is a national accounting and…
Increased Payroll Audits for Churches
The frequency of payroll audits has surged over the last five years and churches are facing increased payroll scrutiny. Most payroll audits have traditionally focused on whether or not a church is misclassifying an employee as an independent contractor, thus avoiding Social Security, Medicare and other payroll taxes. Churches misclassify anywhere from 10 percent to…
What New Clergy Need To Know – Opting Out of Social Security
File Form 4361 by the date your income tax return is due, including extensions, for the second tax year in which you have net earnings from self-employment of at least $400. This rule applies if any part of your net earnings for each of the 2 years came from your services. We also suggest to…
Update Your Church Information with the IRS
Beginning January 1, 2014, churches must file Form 8822-B to report any of the following changes: -business mailing address -your business location -identity of your responsible party* The purpose of this form is to streamline communication and update contact information in case the IRS needs to contact your church. When filing the 8822-B form, churches…
Is your hobby really a business?
The Internal Revenue Service defines a hobby as an activity you pursue without expecting to make a taxable profit. Basically, you do it because you like it, regardless of the cost. But if you demonstrate that you are involved in an activity with the expectation of making money on it, the IRS will consider it…
Ministry Mileage – Best Practices
Almost all clergy use their personal vehicle for ministry purposes. And there’s nothing wrong with that, as long as they keep proper records. If you are chosen for an audit, you can bet the auditor will take a good look at the vehicle mileage. This is sometimes the red flag that caused the audit. Every…
Health Insurance Reimbursement Laws Have Changed…Is Your Church Still In Compliance?
Churches are prohibited from reimbursing employees for the cost of their individual health insurance policies on a nontaxable basis, regardless of whether the coverage is purchased through a Marketplace or directly from a carrier. Any payment for individual health insurance will be taxable income. Group health insurance premiums for employees paid directly by the church…
What are the IRS implications for honoraria, “love offerings,” and fees received separately from compensation?
For the most part, any income received in exchange for services rendered is taxable for both federal income and Social Security taxes, regardless of how it was received. The only exceptions are income paid for certain employer-provided benefits and housing allowances. If income comes through a source other than your employing organization, and it is…
Year-End Tax Tips to Help You Save – Make Charitable Contributions
If you plan to give to charity, consider donating before the year ends. That way you can claim your contribution as an itemized deduction for 2013. This includes donations you charge to a credit card by Dec. 31, even if you don’t pay the bill until 2014. A gift by check also counts for 2013…
