Do I Have to Pay Tax on a Cash Gift?

by patricia
(Minnesota)

To honor my 25 years working at church as a secretary, the congregation secretly took up a collection to be used to pay for a trip overseas with the pastor and others from the church. This was a total surprise!


I do not have the money, it's in the church accounts now, and that is fine, but my question is Do I have to show that amount (approx. $5,000) as income?

At least 125 people donated various amounts-I don't know who gave how much. Does this go on my W2? If so, I can't even afford the trip, which was the intention of the givers, as I will have to make sure I can pay extra taxes and won't have any money to take with me on the trip to cover meals, etc. I know they meant to raise enough for the trip and expenses, but I'm sure they didn't think about tax.

So, will that have to go on my W2 for 2010?

Answer

Awww...Patricia...I do not want to answer this one. Please could one of the CPAs or Tax Preparers that have so generously contributed their expertise answer this one?

What your church did for you was so nice, and it sounds like it would be a trip of a lifetime :-) What an honor!

I will very reluctantly...tell you that most love offerings for employees are considered taxable. Sometimes if it is an award for longevity such as a watch...it is not taxable...but a cash gift is usually considered taxable; however, I would consult a CPA if I was you for something this big. They could tell you if it was definitely taxable or not and what your tax would be on it...if it was taxable.

Congratulations on your 25 years of service for the Kingdom of God!



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