Nonprofit and Church Accounting Blog

This accounting blog...

  • informs you when any new web pages appear on my site,
  • shows you the latest question, comment, or tip posted by readers...(please feel free to browse the questions below and answer the ones you feel comfortable answering),
  • let's you know when an error is found in my free financial spreadsheets and how to correct them.

Apr 11, 2021

Social Security tax

Can a church give their pastor who is receiving Social Security and is being paid a housing allowance a personal retirement amount and he doesn't have

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Apr 11, 2021

pastor and his wife working together

If a pastor and his wife work together can their salaries be combined and filed together on the pastors w2? Vickey's Reply: No. In no shape or form is

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Apr 11, 2021

We have a minister who we pay $250 for each time he speaks at our church, so he is not an employee.

We have a minister who we pay $250 for each time he speaks at our church, so he is not an employee? He has asked that instead of making the check out

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Apr 11, 2021

Can you take a housing allowance if you own your home free and clear?

If a pastor owns their home free and clear (no mortgage), is the housing allowance then limited to only the actual expenses - insurance, taxes, utilities,

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Apr 11, 2021

Possession of Reimbursement

If a church reimburses a pastor for the purchase of a computer or any other church related technological device, does that make the computer property of

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Mar 29, 2021

Housing Allowance on a Church owned house

We have a church owned mission house. At this time, we have a previous IMB missionary living in the house. He has joined our staff for now and has

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Mar 29, 2021

If Pastor is already gainfully employed full time...

We are a small church and we have a parsonage that we are just remodeling for our new pastor. She has a fulltime job with another company with full

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Mar 29, 2021

Clergy housing allowance and SE status for hospice chaplains

I currently work as an ordained hospice chaplain and the scope of the work qualifies me to receive the clergy housing allowance for ordained ministers.

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Mar 29, 2021

how can church pay social tax for a pastor who only receives housing allowance

We are a brand new church. we only pay a pastor for housing allowance. In this case, how can church report social tax (medical tax) for pastor? or

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Mar 29, 2021

treated pastor's pay as regular wage & filed 941

My husband & I started a church years back & in 2020 we decided that he should start receiving a small salary To make long story short, we took out fica

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Mar 29, 2021

One Time Gift to a Pastor

If our church wants to give the Pastor's wife a one time gift designated by the Board of Directors from our General Fund but specific offerings were not

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Mar 25, 2021

Depreciation on New Sound Equipment

Does one depreciate new sound equipment, total $3,000, but have individual prices? Church Building? I'm new at non-profit accounting and I see no depreciation

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Mar 07, 2021

Is approval needed on any unbudgeted items?

Our Ministry Council has no policy on how to manage unbudgeted items and wondered if anyone has a guideline. Do you have a maximum amount that you will

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Mar 07, 2021

Minister Housing Down Payment Loan

Our church bylaws provides an incentive of making available a $20,000 loan to help our new pastor purchase a home. The loan must be paid back with interest,

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Mar 02, 2021

church pays minister's medicare tax

Should that amount be be included in his w-2 wages?

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Mar 02, 2021

What tax document do we give at the end of the year for a monthly pension?

Our former pastor is deceased. We give his wife, the former first lady a monthly amount of support. What tax documents should be given at the end of

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Feb 21, 2021

Health Insurance

We have a new Sr. Pastor coming this May. Included in his financial package is an amount to cover health insurance for him and his family. Is this amount

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Feb 21, 2021

Retirement Benefit and Payroll

Should I run the Pastor's retirement that the church pays, through his payroll? Our church provides a retirement benefit for the pastor. The church pays

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Feb 07, 2021

Utility/Parsonage Exclusion

My Church gives me a utility/parsonage exclusion. Should that amount appear on the W-2 and where?

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Feb 07, 2021

State Employer Identification Number

I am a new treasurer for our church which also has a new pastor. Our church has never given a W2 before. I have a federal tax Id number but not a state

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Feb 07, 2021

Amounts excluded from income limited my Monthly amount or annual amount?

If a minister spends more in one month than is designated monthly, can it be considered part of the annual amount and still excluded from taxable income?

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Feb 07, 2021

Can Box 1 include Housing Allowance?

I have previously read do not include clergy Housing Allowance in Box 1 taxable income so I know that's the recommendation. However, if this does happen

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Feb 07, 2021

who needs to sign the letter for taxes purposes regarding a pastors housing?

who needs to sign the letter for taxes purposes regarding a pastors housing?

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Feb 07, 2021

Property taxes of rental house which provides housing allowance

I live in Cook County, Illinois. Our church currently has a pastoral house which provides as the residence for our pastor. However, the pastor desires

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Feb 07, 2021

941 Form and W2 reporting for a Pastor

Our pastor's amount earned is broken down by his salary/insurance/housing. For the quarterly 941 form on line 2 for wages do I include his total amount

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Feb 07, 2021

counseling

Our church sent a pastor to a retreat to receive personal counseling and the church paid for it. It is all business (church) related. Is that a taxable

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Feb 07, 2021

Small Church & Forms 941/944

We are a very small church with two priests, both part time. We do no withholding of taxes for them but we do do a W-2 for them which is mainly a housing

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Feb 07, 2021

Should I file a tax extension?

April 15th 2021 will be the “2 year deadline” for me to file so I will be sending mine in this month (Jan 2021). If it takes longer than 3 months to

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Feb 07, 2021

How does a para church organization account for staff who raise their own support?

Is it an option to pay the staff as contractors and issue a 1099 to them? Or do they have to be employees and get W2s? And are there rules relating

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Feb 07, 2021

Worship Leader

We pay a worship leader $50 a week. Would we give her a 1099 or a W2?

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