Can you modify housing allowance mid-year?
Can you modify housing allowance mid-year? The Housing Allowance can be amended (changed) as often as needed. We always recommend overestimating when designating a housing allowance. The goal would be to have enough of a buffer in the designation to end up with unused housing at the end of each year. This eliminates the need to…
2022 meals and entertainment deduction
2022 meals and entertainment deduction As part of the Consolidated Appropriations Act signed into law on December 27, 2020, the deductibility of meals changed. Food and beverages will be 100% deductible if purchased from a restaurant in 2021 and 2022. Here are some examples: Type of Expense Deduction Entertaining clients (sport events, club membership, golf games, etc.) 0%…
IRS raises standard mileage rate effective July 1
IRS raises standard mileage rate for second half of 2022 The IRS announced that it is increasing the optional standard mileage rate for the second half of 2022. Effective July 1, 2022, the standard mileage rate for ministry and business travel will increase by four cents per mile, to 62.5 cents per mile. The medical…
What if you don’t have the money to pay the tax?
What if you don’t have the money to pay the tax? The IRS will allow you to file an extension without paying the tax. You are still required to include an estimate of the tax due on the form. (The extension will not be accepted without this amount being entered.) The late filing penalty will…
What Does Clergy Dual Status Mean?
What Does Clergy Dual Status Mean? Under federal law, most ministers have dual tax status. Dual tax status means a minister is an employee of the church for federal income tax purposes, and self-employed for Social Security and Medicare taxes. For ministers, wages are reported in two different ways: Federal Income Tax = Employee status…
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…
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…
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…
What is Considered Income For Tax Purposes?
What is Considered Income For Tax Purposes? Tax season is right around the corner. Employers are preparing and sending out W2 forms to their employees and 1099 forms to their contractors. Individuals are receiving a wide variety of tax-related documents. A threshold issue for proper individual tax reporting is understanding what is considered taxable income….
