See the church accounting blog below for questions, answers, and tips from church AND nonprofit staff and volunteers.
Please use the "Site Map" or "Site Search" (links to both are at the top of the home page) BEFORE submitting your own question as there are THOUSANDS of Q&A in this FAQ section and you can probably find the answer to your questions much quicker that way =) Plus... I won't post the same questions over and over again.
NOTE: Please consider adding a reply/comment on some of the readers' post below. My husband is having some medical issues and I am not able to reply to all of the questions that my awesome readers submit.
Do not worry about being "expert" on the subject matter! We love hearing your suggestions, advise, and past experience on the subject.
All of my readers know that they should always "research" for themselves or SEEK the ADVICE of a professional before taking the word of everything they read on the internet as I "remind" them of that very important fact in almost all of my replies =)
But many times, hearing how someone else has handled a similar issue, is a great help!
My church reimburses our Pastor for health insurance premiums paid through his wife's employer, which is a tax-free benefit under their cafeteria plan.
Is a benevolent payment made prior to an employee's start date taxable if that payment occurs in same calendar year as becoming an employee of the church
Continue reading "Is a benevolent payment made prior to an employee's start date taxable if that payment occurs in same calendar year as becoming an employee of the church?"
What would constitute being reimbursed for a meal? A pastor at our church likes to go out for lunch after church with church members, just to get together.
Our pastors are given a monthly reimbursment for part of their cell phone cost, but I know of no evidence as to the percentage of the phone being used
Our church is providing meals on Wednesday evenings for those who want to eat before the service. We cannot absorb the cost into our current budget.
If an older minister from a different state comes and preaches a few meetings for our local church, is the love gift, that the people gave the church to
Is the church required to send/file a W2 to the IRS or to the pastor when his church income is a round 21,000 but the housing allowance or fair market
Would you put the fair market value of the parsonage a pastor used in box 14 of his w2?
Continue reading "Do we include the FMV of the use of a parsonage on a W2? "
Our pastor is paid 43,000 a year base pay. Each month he has our secretary withhold 1,000 which he then turns in business receipts for and gets a check
So our pastor moved into a new home in September and had housing expenses. We are allowing him to claim housing allowance. I filed the quarterly 941
Continue reading "Housing Allowance reported on 941, file a 941-x to amend or just leave it?"
Currently, our youth pastor does not want to take pay. He would like to have the church take what he would get paid and move it from the youth pastor
Continue reading "How to legally move payroll funds to restricted line item"
Hi! I have purchased your books and spreadsheet. This is what I have setup and have been using for our small church for the past several months. My
Wondering how to account for a specific time restricted project like a mission's trip or summer camp? Can I set up a temporary fund just for that project?
Continue reading "How do I account for a mission's trip or youth summer camp?"
I'm setting up my Chart of Account in Aplos and have A LOT of restricted funds. I don't want to set them all up as separate funds, but I'm not sure how
I'm still learning about some basics for nonprofit accounting. We have a project that we have allocated some of our Unrestricted Funds for that is not
This year Pastor's insurance cost was lower than the amount budgeted from his package. At the end of the year do we: 1. let it expire, that budget balance
We gave our pastor a laptop computer for his 10th anniversary. Is this a taxable gift? We had donations from the congregation for $660.00 and the price
See a year end checklist for churches. Includes tasks that should be completed before the end of the year to ensure a smooth transition into the new year.
I have a client that opted out of paying in social security taxes on his clergy income. Now as he is approaching retirement, he would like to start
Continue reading "How to opt back in to paying social security taxes on clergy income"
In a little-known change, churches have access to a new round of COVID relief funding. Unlike the PPP (Paycheck Protection Program) program, a church qualifies if it suffered only operational impact stemming from a government order.
Proving a negative financial impact is not required to be eligible for Employee Retention Tax Credit (ERTC) relief.
In short, churches that cut back programs or services qualify for these refunds.
Consider whether during COVID your church experienced any of the following?
- Camps cancelled
- Youth group cancelled
- Small groups cancelled
- After service fellowship cancelled
- Training and meetings cancelled
If any of these things happened to your church for a period of time the ERTC may be available to your church.
So, what is the big deal with the ERTC?
Refunds available under the ERTC can be as large as $5,000 per qualified employee for 2020 and as large as $21,000 per qualified employee for 2021.
One of our CPA partners, Wisdom Over Wealth has helped claim over $4 million in ERTC relief for churches with over $1 million more in the process.
Wisdom is equipped to evaluate the benefit of the ERTC for your church. They will calculate the credits available and prepare the necessary forms for filing with IRS.
To learn more, click the link below and complete the "Contact" form and put “ERTC Program” in the MESSAGE box and I will get you in touch with Wisdom Over Wealth, so they can get started on your evaluation!
Continue reading "New COVID Financial Relief Available for Churches"
What would you suggest as best practice for paying someone for pulpit supply/ or filling the pulpit from time to time? What taxes are necessary? How should
Continue reading "How should we account for paying someone for guest preaching?"
Is Housing Allowance included on Form W-2, Box 1 (Wages, Tips, Other Compensation)
What day can I start counting expenditures towards housing allowance? First official start day at work or before that? I moved from one state as a pastor
Continue reading "What day can I start counting expenditures towards housing allowance? First official start day at work or before that?"
Due to COVID, receipts of cash contributions were low. The church had me do a W2 for pastors housing allowance. The fact is they now are asking me
Continue reading "Can a pastor give back/donate his housing allowance to the church as a charitable contribution?"
Can our youth minister have his entire salary in housing allowance since he is bi-vocational?
We are a small congregation less than 40 persons. In the past we have not designated a 'Housing allowance' and given the pastor a 1099-Misc for the
if we give a love gift to members of the worship team will we have to issue a 1099-misc if it is over $600.00? Susan
Can we give a contribution receipt to a family that made a monetary donation to the church that used the building for a wedding? They are not members
Our Church owns a Parsonage which our newly chosen ordained pastor and his family will live in. It is my understanding that the fair market (utilities
Continue reading "Church owned Parsonage plus housing allowance, can the same Pastor have both?"
Is the 7.65% social security allowance hard and fast or can a different amount be offered?
Continue reading "Is the 7.65% social security allowance hard and fast or can a different amount be offered"
If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.
Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)