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.

May 31, 2021

1st year of a New Church Plant with all Pay designated as Housing

100% housing is paid to our pastor, we are a new church and are wondering what forms is the small church required to file with IRS or SSA. By the way,

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May 31, 2021

Uncashed Check Donated Back to the Church

We have recently been going through our bank accounts and dealing with a couple dozen checks that we have written out over the years that have never been

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May 31, 2021

Regular Financial help to a widow in our church.

We would like to give regular financial help to a widow in our church. Is that taxable to her and if so what form would we use to report it to IRS and

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May 31, 2021

Other donation from church

I received other donations from the church that is not a part of my salary, such as Pastor appreciation, vacation pay, birthday etc, from the church. It

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May 16, 2021

FICA being withheld from Housing Allowance.

I am working on a tax return for a minister who is an employee of the church and receives a housing allowance. On the w-2, the housing allowance in included

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May 16, 2021

If your actual housing amount is more than your designated housing allowance, are you able to deduct it on your tax return?

If you are a minister and you have designated a housing allowance but your actual housing expenses are more than your housing allowance, are you able to

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Apr 24, 2021

IRS Regulation regarding value of Computer kept upon leaving?

We are a very small church, trying to codify our Accountable Reimbursement Plan. When our pastor is reassigned, we want to give the option for them to

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Apr 24, 2021

Won't 100% housing allowance avoid the church having to pay FICA?

If board approval says that they are only going to pay the pastor 100% housing allowance, without payroll, than this would avoid the church having to pay

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Apr 24, 2021

Interim Pastor - Statutory Employee?

My father is an interim pastor for his church and received a W-2 amounts in Box 1 Wages and Box 2 FIT Withheld. Box 13 was also checked for statutory

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Apr 24, 2021

Can Housing Allowance be reduced from self employment tax (with an appropriate schedule)?

Is the entire housing allowance portion reported as wages for self employment tax, on schedule SE (box 5a of 2020 tax year) OR can I reduce the housing

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Apr 24, 2021

Prorated Final Paycheck - treatment of Housing Allowance

Our pastor has put in his notice and his last day will be in about a month (mid-May). He is not currently going to another congregation. He has asked

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Apr 24, 2021

Accounting for Contributions earmarked for a specific project

With regards to the Main Question above, should such earmarked contributions be taken to Income or would it be acceptable to treat it as a Special Fund

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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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