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 20, 2022
Are Grants Tax-deductible?
A member in our church has his private ministry to the marginalized but has no NPO. Can our church or NPO receive donations for this guy’s ministry and
May 20, 2022
Contribution for Future Pledge Period
We started our pledge campaign for the upcoming July - June fiscal year (it is now May). We are receiving donations for these future pledges, most are
Apr 11, 2022
Church Embezzlement and Credit Cards Policies
Church embezzlement is on the rise. Learn what you can do to protect your church against this financial crime.
Continue reading "Church Embezzlement and Credit Cards Policies"
Apr 08, 2022
Pastor's Utilities Paid by Church
In a situation where our pastor has an agreed upon housing allowance, but the church also has a budget line where we pay his utilities. Should the utilities
Apr 08, 2022
Housing Allowance and 1st Position HELOC
I recently qualified for housing allowance and have my mortgage set up under a 1st position/lien HELOC. I would guess the interest payments on the HELOC
Apr 08, 2022
HA pay is only recorded in church financial books and not declared elsewhere except by letter to the clergy...correct?
Our part-time clergy receive their full pay as designated HA. My understanding is that it is NOT included in the wages reported on our Qtrly 941s.
Apr 08, 2022
Does my church have to file a 990-T or any tax form for profit from an investment used to further its nonprofit mission?
Does my church have to file a 990-T or any tax form for profit from an investment used to further its nonprofit mission?
Apr 08, 2022
Question
I am employed by my church as the senior pastor. For nearly 30 years they have outright paid for my health insurance plan. I am turning 65 and the church
Mar 06, 2022
Housing Allowance and SE Tax for Retired Ministers with Second Ministry Career
If a Minister retires from the Govt/Military (was a military minister) and receives a 1099-R for retirement pay, but then starts a second career as a minister
Continue reading "Housing Allowance and SE Tax for Retired Ministers with Second Ministry Career"
Mar 06, 2022
College paying Minister employee housing allowance.
I am a tax professional who does many clergy tax returns and think I know all the rules but... Several years ago I had a client start teaching at a
Continue reading "College paying Minister employee housing allowance."
Feb 23, 2022
What parts of pastor's compensation is included on 941 line 2?
I would like to make sure I am completing my quarterly 941 correctly with regard to our Pastor's compensation. Here are sample (not actual) amounts:
Continue reading "What parts of pastor's compensation is included on 941 line 2?"
Feb 23, 2022
How to transfer funds from one one class to another class in QBO
I use QBO for our church accounting. I need to transfer funds from our general fund to our designated building fund. I use classes in QBO. Both funds
Continue reading "How to transfer funds from one one class to another class in QBO"
Feb 23, 2022
Accounting Manager
The pastor is an employee of the church but he receives donations outside of his W2. Shouldn’t the pastor receive a 1099 as well?
Jan 22, 2022
One EIN, Two Accounting Firms File 941
The church has one EIN. One accounting firm will file 941 for the church's mission employees. A second accounting firm will file a 941 for the church's
Jan 22, 2022
Weekly designated gift to pastor & W2
This past year, a new member started designating gifts to our two pastors each week. One is a close relative to whom he gives a couple hundred each
Jan 22, 2022
941-difference between housing allowance and fair value of parsonage
Last yr the Pastor was part-time and not yet qualified as a licensed pastor, so he got a housing allowance and Fica was taken from his wages which the
Continue reading "941-difference between housing allowance and fair value of parsonage"
Jan 22, 2022
Allowable business reimbursement account - used for health costs
One accountant stated that the allowable business reimbursement arrangement for the pastor could be used to cover medical expenses. The church provides
Continue reading "Allowable business reimbursement account - used for health costs"
Jan 22, 2022
Full-Time RVer
My denomination designates my pension as housing allowance and has an IRS letter confirming that designation. Beginning in June 2020 we live full time
Dec 24, 2021
Hourly Employee Housing Allowance
We have a part-time associate pastor who we are looking to convert to hourly (rather than PT salary). Currently, a portion of his salary is allocated as
Dec 24, 2021
Pastor's use of Church owned Parsonage AND Housing Allowance for Primary Residence
Our new pastor lives in a different city from where our church is located and drives here for the weekend and stays the weekend in our church-owned parsonage.
Dec 24, 2021
I don't have my commissioning certificate
We are commissioned missionaries that could claim a housing allowance, but are being told we need a certificate/letter with details of our commissioning,
Continue reading "I don't have my commissioning certificate"
Dec 24, 2021
Issuing a 1099
we are a small Wisconsin Church and we are looking to pay a women about $200.00 per week for secretarial work as a non-employee. what must the church
Nov 14, 2021
Housing Allowance on Paycheck
I am an ordained minister and part of my compensation plan agreed upon in June 2021 was to move half of my pay to a housing allowance amount. My paychecks
Nov 14, 2021
Year End Checklist for Churches
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.
Nov 14, 2021
Individual (not group) life insurance premiums-fringe benefit?
Are premiums paid by church, paid directly to the insurance company, for a Pastor's individual (not group) life insurance policy considered taxable income
Continue reading "Individual (not group) life insurance premiums-fringe benefit?"
Oct 18, 2021
Misclassification of Workers in a Church or Nonprofit
Misclassification of workers is a big issue with many small churches and nonprofits.
Continue reading "Misclassification of Workers in a Church or Nonprofit"
Oct 06, 2021
100% of salary as housing allowance.
I am moving to a congregation that is providing a monthly salary of $4200. I have some disability income, social security as well as my wife works and
Oct 06, 2021
Interim Ministry Question
We hired an interim pastor who resides out of our area. He is requesting that based upon the fact that his employment will be less than 12 months, an
Sep 20, 2021
Question: Carry temp restricted balances to next FY?
We have several temporarily restricted accounts, for example Youth Summer Trip where the money is designated (NTD) towards a youth trip and the costs for
Continue reading "Question: Carry temp restricted balances to next FY?"
Aug 31, 2021
Retired Pastor still working but not being paid.: what tax advantages are there?
Enjoyed reading your useful advice for pastors. I’m a retired pastor who still evangelizes, disciples, counsels, mentors, consults, and coaches a minimum
Continue reading "Retired Pastor still working but not being paid.: what tax advantages are there?"
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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