Flexible Spending Accounts
A flexible spending account (FSA), also known as a flexible spending arrangement, is one of a number of tax-advantaged financial accounts that can be set up through a cafeteria plan. An FSA allows an employee to set aside a portion of earnings to pay for qualified expenses as established in the cafeteria plan, most commonly…
Minister not allowed housing allowance exclusion.
A minister didn’t receive a salary from his church, but the church paid his personal credit card charges, his home mortgage and home utility expenses. He claimed these payments should be excluded from his income because he made a vow of poverty. The Tax Court upheld the IRS in finding the payments were taxable income….
All Legal Same-Sex Marriages Will Be Recognized for Federal Tax Purposes (IRS Press Release)
 Ruling Provides Certainty, Benefits and Protections Under Federal Tax Law for Same-Sex Married Couples WASHINGTON — The U.S. Department of the Treasury and the Internal Revenue Service (IRS) today ruled that same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes. The ruling applies regardless of…
Give Withholding and Estimated Payments a Check-up to Avoid a Tax Surprise
Some clergy are surprised to learn they’re due a large federal or state  income tax refund when they file their taxes. Others are surprised that they owe more taxes than they expected. When this happens, it’s a good idea to check your federal tax withholding or estimated payments. Doing so now can help avoid a…
How do you determine the fair rental value of the parsonage or pastor’s home?
In general, the fair rental value of the property is a question of facts and circumstances based on the local real estate market. If the pastor rents his home, the amount of the rent would be presumptive evidence of the fair rental value (assuming the rental agreement was an “arm’s length” transaction). Other methods of…
If You Receive an IRS Notice, Here’s What to Do
In the unlikely event you receive a letter or request for an audit from the IRS or state Department of Revenue relating to your tax return, one of our tax professionals will be available year-round to provide guidance on what to expect, how to prepare, and help answer your questions. Each year the IRS sends…
Atheist Minister? Oxymoron? The Federal government doesn’t think so…
The Tennessean recently published an article regarding the Freedom From Religion Foundation’s lawsuit challenging the clergy housing allowance exclusion. Their argument against the clergy housing allowance exclusion is that the tax breaks gives an unfair advantage to  religious organizations. Lawyers for the Federal government are now arguing that leaders of atheist organizations may qualify for…
Four Important Church Requirements
Prepare list of all church property for insurance purposes – include item description, serial number and value Prepare list of safety deposit box contents – update authority as needed – access should be allowed by two unrelated people Computer records are backed up and password protected for security Ideally, four individuals are required for regular…
Making A Charitable Contribution?
If you want to claim a charitable deduction, be sure the church or charity you select is a tax-qualified organization under IRS rules. Charitable purchases are only deductible in the amount exceeding the worth of the item purchased. For example, if you attend a $50 a plate dinner for children’s hospital, the deductible amount is…
Are your church workers classified correctly?
Churches may soon face increased scrutiny relating to employment classifications. The Treasury Inspector General for Tax Administration found in a recent study that 19 percent of small business employers didn’t comply with IRS rulings on worker status. This percent may be higher among churches. We recommended that your church review and increase compliance with employee…
