FAQS and Church Accounting Blog

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!

Feb 14, 2024

1099 or W-2 for working minister

If a minister is employed full-time with another job and receives a $500 housing allowance from the church, he pastors, would he receive a 1099 and or

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Jan 09, 2024

Christmas Bonus

Our Pastor received a Christmas bonus under $200.00. Do I put the full amount on his W-2 since no taxes were taken out? He qualifies for his regular salary

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Dec 18, 2023

Do I still have to do a letter to the Minister's for housing allowance if its on their W2 ?

If the housing allowance is on the W2 do I still need to give them a letter for the amount of the allowance?

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Dec 08, 2023

Christmas Bonus

Our Pastor's salary this year has been designated to Housing Allowance. Will his Christmas Bonus go on a W-2 even if it's only a small sum? Thanks, D

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Oct 22, 2023

Alms Giving Directly by the Church to the Community

What contributions can the church make to individuals under an alms program? (i.e. payments for Food, housing, etc).

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Oct 04, 2023

Love Gift to Pastor - not related to services performed - reportable?

If a pastor is experiencing high medical costs not covered by insurance and the Board wants to provide them a small love gift (< $3,000) to show support

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Sep 18, 2023

Accounting for Online Donations Issue

I went through the process of of the sales receipt and bank deposit to account for on-line processing fees. But when I run a Statement of Activity by

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Sep 14, 2023

Is a Pastor required to file a w-2

A pastor of a small church the He pioneered. He only receives a honorarium each month. Is he required to file a w-2?

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Sep 14, 2023

Pastor in church provided parsonage

The pastor lives in a church provided parsonage. The church pays for the utilities (not transferred to the pastor's name). Let's say the pastor is paid

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Sep 05, 2023

Can the Church pay the minister’s rent directly to the landlord? (This question applies for the state of Virginia)

1. Can the Church pay the minister’s rent directly to the landlord? (This question applies for the state of Virginia) 2. In what cases is permitted that

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Aug 11, 2023

How to categorize a Women's Group offerings?

Our church has a Women's Group that collects money. Usually, from this money, we send checks to friends/family for wedding gift, baby shower gift, etc.

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Aug 07, 2023

Post retirement contributions to 401k for pastor

Is it legal to contribute to the 401k of a retired pastor for the church?

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Aug 02, 2023

Can a church volunteer about to receive a 1099Misc form donate it back to the church

Can a church volunteer about to receive a 1099Misc form choose to donate it back to the church to avoid receiving a 1099-Misc?

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Jul 18, 2023

Payroll has been deducting SS and Medicare from Pastor's pay check, is that correct?

Screenshot of weekly paystub from may

I'm a volunteer at a small church helping with finances and in reviewing the books I noticed the Pastor is having SS and Medicare taxes withheld from the

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Jul 18, 2023

How do you handle inkind donations for expense items

How do you record a donation of items purchased for an expense. (cash basis, quickbooks intuit desktop) Someone gave me a list of items purchased for

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Jul 14, 2023

Buying Capital Assets with Restricted Funds

Our church is going through mold remediation. Our total restricted earmarked funds are currently at $65,000. I know how to handle restricted funds.

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Jun 22, 2023

Are contributions for associate pastor compensation tax-deductible?

A local church receives donations to provide for an associate pastor in the future. Are these tax-deductible? A local church used a limited-term grant

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Jun 14, 2023

Requested refund of a contribution

Can I put a disclaimer on contributions that they can not be refunded?

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Jun 14, 2023

Church accounting for contribution paid to pastors retirement fund

How should you treat a board approved amount of funds to be given to the pastor? The church does not have an existing plan, but will give pastor a certain

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Jun 06, 2023

Housing allowance for bi-vocational minister

Our assistant pastor receives is a bi-vocational licensed minister. His monthly compensation is $1,000 per month ($500 designated as salary, and $500

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May 09, 2023

Love offering for a pastor retiring on disability.

I retired the first week in January of 2023. The church took up a love offering and sent me a check for $27,800 which was collected from the members of

Continue reading "Love offering for a pastor retiring on disability."

May 04, 2023

Last day of the month is Sunday. Which month does the offering belong

When the last day of the month is Sunday, do you include the offering in that month or the next. The deposit in the bank will be posted for the next

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Apr 08, 2023

Guidelines for providing food at church activities

I can’t find good source that explains the does and don’ts on what is allowable when providing food at church events paid for from church funds. Pizza

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Apr 03, 2023

required backup paperwork Contributions

Are churches still required to maintain paper or digital records of contributions? i.e. copies of checks, OR do the records of church and annual statements

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Apr 03, 2023

WHERE DO I FIND THE INFORMATION AT?

I WOULD LOVE TO KNOW WHERE YOU CAN FIND THIS INFORMATION FOR LEGAL PURPOSES YOUR THEORY ON BI-VOCATIONAL MINISTERS ALL THEIR WAGES GOING INTO HOUSING.

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Apr 03, 2023

A non-minister church employee becomes ordained as a minister in the middle of the year.

An existing church empoyee becomes ordained as a minister in the middle of the year. I understand that a housing allowance can be established mid year,

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Apr 03, 2023

Sign nullifies donation?

Our church hosts a golf tournament that raises money for four specific mission organizations. A “hole sponsor”, giving a $100 gift, has a sign posted

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Apr 03, 2023

Long Term Care Insurance

Is it possible for the church to pay long term care premiums for a minister as a fringe benefit?

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Mar 21, 2023

Health Insurance Reimburesement

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.

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Mar 21, 2023

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?

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

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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 =)



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