Understanding Your Pay
Church workers, like employees of any organization, usually receive a “pay stub” each time they are compensated. The pay stub may be a physical attachment to a paper paycheck, or it may be an electronic form if payment is made by direct deposit. This document may seem similar to a piece of junk mail after…
Who is a Minister for Tax Purposes?
A minister occupies a unique niche in the United State tax code. He or she is considered an employee for income tax purposes, but self-employed for social security and Medicare. In addition, a minister is eligible for a housing allowance that is not subject to income tax and has the choice to opt-out of social…
Refund delays, stimulus check errors foreshadow rough tax season
Tax-refund delays and stimulus-payment hiccups could spill into the upcoming tax season as the Internal Revenue Service continues to face challenges related to the coronavirus pandemic and as Congress considers yet another round of direct payments. Millions of Americans waited months for refunds in 2020, and millions also have yet to receive some or all…
Tax Season Start Date
The IRS announced it will begin accepting and processing returns on Friday, Feb. 12, 2021. The decision was made to push back the start date by a month to allow the department extra time to prepare following the Dec. 27, 2020 tax law changes. The tax filing deadline remains April 15, 2021.
When are credit cards purchases deductible
Credit card statements are necessary to prepare your taxes. They have a record of items that were purchased with the credit card some of which may be tax-deductible on your tax returns. There is a belief that you deduct your purchases as you pay off your credit card: This belief is incorrect. When you put…
When are credit card purchases deductible?
Credit card statements are necessary to prepare your taxes. They have a record of items that were purchased with the credit card some of which may be tax-deductible on your tax returns. There is a belief that you deduct your purchases as you pay off your credit card: This belief is incorrect. When you put…
Bunch your itemized deductions
You choose every tax year whether to itemize or claim the standard deduction. With the standard amounts almost doubled by the Tax Cuts and Jobs Act, the trend definitely is toward the standard amount, which for 2020 returns is $12,400 for single filers this year, $18,650 for heads of households, and $24,800 for jointly-filing married couples. If,…
The Parsonage Allowance
IRC § 107 provides an exclusion from gross income for a “parsonage allowance,” housing specifically provided as part of the compensation for the services performed as a minister of the gospel. This includes the rental value of a home furnished to him or her as part of compensation or a housing allowance, to the extent…
Non-taxable benefits for ministers
Disability Insurance – The church can reimburse its pastor for this premium or pay it directly. Health Insurance – Group health insurance plans are a qualified fringe benefit. If the church does not qualify for a group plan because there is only one employee, you will need to establish either a One Person Health Reimbursement…
One Week to 1040 Extension Deadline
We are only seven days away from the final extension deadline for the 2019 1040 tax return. Once this deadline passes, there are no further extensions. IRS will consider your return late, and could assess late filing penalties if you haven’t already paid the tax on the return. If you still haven’t gotten started on…
