15 Questions Related to a New Call
How does the church’s social security allowance compare to other similar-sized churches? Are there limits or guidelines for the accountable or nonaccountable reimbursement plan? What other travel-related expenses does the church cover besides auto mileage? Are there specific guidelines or a budget for ministry and professional-related expenses? What are the expectations for the pastor’s involvement…
Qualified Charitable Distributions
A Required Minimum Distribution (RMD) refers to the minimum amount that must be withdrawn annually from retirement accounts such as traditional IRAs, 401(k)s, 403(b)s, and other qualified retirement plans, starting in the year the account holder turns 73 (or 70½ if they turned that age before January 1, 2020). The purpose of RMDs is to…
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…
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…
How to set up a Qualified Charitable Distribution (QCD)
To set up a Qualified Charitable Distribution (QCD) from your IRA to a qualifying charity, follow these detailed steps and ensure you meet all IRS guidelines, limitations, and restrictions: Steps to Set Up a QCD Verify Eligibility: Age Requirement: Ensure you are at least 70½ years old at the time of the distribution. IRA Type:…
Donation of public traded securities
To facilitate the donation of publicly traded securities to your church, the process involves several steps to ensure compliance with IRS regulations and maximize the donors’ tax benefits. Here’s a guide on how to handle such a donation: Establish a Brokerage Account for the Church Open an Account: The church should set up a brokerage…
Non-deductible ministry meals & travel?
Non-deductible ministry meals & travel? Generally speaking, a deductible ministry expense must be “ordinary and necessary” for it to count as a write-off. Ordinary and necessary simply means it’s a common expense for someone in the ministry, and it’s essential for the operation of your church. Unfortunately, you can’t deduct all the food that you…
