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.

Aug 14, 2018

Are tithes made by church staff tax deductible?

I'm wondering if the tithes I donate to my church would still be eligible for tax deductions if I become an employee of the same church.

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Aug 14, 2018

Misclassification of Workers in a Church or Nonprofit

Misclassification of workers is a big issue with many small churches and nonprofits.

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Aug 08, 2018

Hourly employee being paid for hours worked with her husband

We have an hourly custodian employee who would like to have her husband help her clean and be paid for the hours that they both do together. For example

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Aug 08, 2018

HA for independent or assisted living facility in retirement?

If a retired minister lives in an independent or assisted living facility, can the HA be used to pay for the expense of the facility, since that it is

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Jul 26, 2018

What's the difference between form 4361 and form 4029?

Every I see says to fill out form 4361 to opt out of social security. However this form doesn't say social security, it says Exemption from Self-Employment

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Jul 21, 2018

Missions Trip Contributions

We've recently received contributions for our church's mission trip. For some checks received though, the memo line contains the name of the individual

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Jul 21, 2018

Define "reasonable" for a Pastor's salary.

What is considered by the IRS reasonable compensation for a pastors salary? Or can reasonable be whatever a church memer/pastor petsonally feels is appropriate

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Jul 12, 2018

"Gifts that flow from the church ...

I don't want to make any assumptions: 1.Pastor announces a special collection to help his colleague(a visitor to the church) start a new church. Cash

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Jul 07, 2018

Tax Cuts and Jobs Act (TCJA) Effect on Churches and Nonprofits

How is the new tax reform laws in the TCJA affecting churches and nonprofits? Read how some of the new laws could require some them to file and pay taxes for the first time.

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Jul 07, 2018

Accountable Reimbursement Plan Guidelines

Review the 3 requirements for accountable reimbursement plan reimbursements to be considered accountable.

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Jul 07, 2018

The hospital I am a chaplain for withheld social security on my housing allowance!

The hospital I am a chaplain for (I am an ordained minister) withheld Social Security on my entire salary, including the housing allowance. The IRS responded

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Jun 29, 2018

Still an ordained minister but not employed by the church

My question is if I'm still an ordained minister and registered with the state but no longer employed by a church, can I still receive housing allowance

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Jun 29, 2018

Facilities director AND Campus Pastor

I am interested in learning more about when a pastor is considered a minister as determined by the IRS. I My full-time facilities manager has recently

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Jun 29, 2018

Sending Flowers

under IRS Rules for 501c3 organizations, can a church send flowers to an individual with its fund, whether to a member or nonmember of church? In doing

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Jun 29, 2018

Pastor Payroll Help

I have just started doing the bookeeping for our small church. I am unfamiliar with pastoral payroll. I have three main questions outstanding following

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Jun 29, 2018

Accountable Reimbursement Plan

Can this type of plan be set up for a volunteer in the church? Say the Pastors wife?

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Jun 17, 2018

Understanding Financial Statements for a Church

Preparing and understanding financial statements for a church or nonprofit.

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Jun 03, 2018

W2 Box 1 negative when including Housing Allowance and Retirement Contribution

My denomination allots a housing allowance of 75% of gross income, for which I can fully utilize by making additional house payments toward the mortgage

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Jun 01, 2018

Compensation Package with Prepaid Debit Card

Can you tell me if there are any stipulations to offering a prepaid debit card for an allotted amount of hospitality to a church employee as part of their

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Jun 01, 2018

Housing Stipend to minister/pastor and equity share that amount to the church?

If the church gives a housing stipend of say $2,000/mo ($24K/year) can there also be an equity share agreement with the church for that contribution.

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Jun 01, 2018

Does the Housing Allowance belong anywhere on the 941 Form?

Does the Housing Allowance belong anywhere on the 941 Form? Vickey's Reply: NO. Do not include housing allowance payments on the 941 form. The only

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Jun 01, 2018

Housing Allowance and Medical ONLY

I am a bivocational pastor of a small church. The church has grown to the point where they are able to start thinking about a small compensation package

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Jun 01, 2018

School Scholarship Donation

We recently started a private christian school under the umbrella of our church. We had someone donate a scholarship to the school. How would you

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May 30, 2018

Sell of Church Dished

We recently sold some dishes from the church. What kind of entry needs to be made? The women's ministry bought them 30 to 35 years ago and we no longer

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May 30, 2018

Donations made monthly to specific missionary family in a foreign county

We receive monthly donations for missionaries in foreign countries. We send the money direct to them from our contributions funds according to donors request.

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May 30, 2018

Clarification on Earmarking Donations

If I cannot earmark my donation to a specific person that I want to benefit from my donation, how is it possible that at Christmas Time when the newspaper

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May 02, 2018

Form 941 and What is Reported on W-2

Our church reports income tax on Pastor's Gross Salary quarterly on the 941. When the W-2 is completed, $0 is entered for Box 2, Federal Income Tax.

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May 02, 2018

HA is not approved for a Mortgage Loan

We were just denied a mortgage loan because our HA has not been effective for 12 months. Apparently this was written into effect in Trump’s new law as

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May 02, 2018

Ways to reimburse buyers of supplies

I have been one of the main buyers for our temple for many years, and recently the bookkeeper has told me (and others) that, to protect us in the case

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May 02, 2018

Opt back in to SECA

Is there an IRS form for clergy to opt back into SECA? Or do they simply start paying self-employment taxes on Schedule E? Will this trigger an audit?

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