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.

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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Feb 07, 2021

Utility/Parsonage Exclusion

My Church gives me a utility/parsonage exclusion. Should that amount appear on the W-2 and where?

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Feb 07, 2021

State Employer Identification Number

I am a new treasurer for our church which also has a new pastor. Our church has never given a W2 before. I have a federal tax Id number but not a state

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Feb 07, 2021

Amounts excluded from income limited my Monthly amount or annual amount?

If a minister spends more in one month than is designated monthly, can it be considered part of the annual amount and still excluded from taxable income?

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Feb 07, 2021

Can Box 1 include Housing Allowance?

I have previously read do not include clergy Housing Allowance in Box 1 taxable income so I know that's the recommendation. However, if this does happen

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Feb 07, 2021

who needs to sign the letter for taxes purposes regarding a pastors housing?

who needs to sign the letter for taxes purposes regarding a pastors housing?

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Feb 07, 2021

Property taxes of rental house which provides housing allowance

I live in Cook County, Illinois. Our church currently has a pastoral house which provides as the residence for our pastor. However, the pastor desires

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Feb 07, 2021

941 Form and W2 reporting for a Pastor

Our pastor's amount earned is broken down by his salary/insurance/housing. For the quarterly 941 form on line 2 for wages do I include his total amount

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Feb 07, 2021

counseling

Our church sent a pastor to a retreat to receive personal counseling and the church paid for it. It is all business (church) related. Is that a taxable

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Feb 07, 2021

Small Church & Forms 941/944

We are a very small church with two priests, both part time. We do no withholding of taxes for them but we do do a W-2 for them which is mainly a housing

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Feb 07, 2021

Should I file a tax extension?

April 15th 2021 will be the “2 year deadline” for me to file so I will be sending mine in this month (Jan 2021). If it takes longer than 3 months to

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Feb 07, 2021

How does a para church organization account for staff who raise their own support?

Is it an option to pay the staff as contractors and issue a 1099 to them? Or do they have to be employees and get W2s? And are there rules relating

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Feb 07, 2021

Worship Leader

We pay a worship leader $50 a week. Would we give her a 1099 or a W2?

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Jan 11, 2021

Income and Expense Reporting for small church

I need a simple way to record Income (member donations) and expenses for a very small church (less than 50 members.) I am not a bookkeeper in all fairness.

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Jan 11, 2021

What EIN is a pastor's income reported under with mulitple churches for 941 and W2

We have one pastor with 3 charges. We are looking having one lead church that pays his monthly salary and then the other 2 reimburse the lead church for

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Jan 11, 2021

Last year's Contributions

Can I add January 2021 contributions to 2020 contribution report?

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Jan 09, 2021

No Form Subscribe

I have not been able to find the form to subscribe in order to download free spreadsheet. Can someone help?

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Dec 24, 2020

Why not include housing allowance in W-2?

Is there some logical reason not to include housing allowance on the W-2 form? I know that the cleric is not required to pay income tax on the clergy

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Dec 24, 2020

Gift of Parsonage to Preacher

The church gave the preacher the parsonage via a Gift Deed. Value of the house/property is about $215K. At year end, do we need to provide a 1099

Continue reading "Gift of Parsonage to Preacher"

Dec 24, 2020

When is a love gift not considered income and considered a gift tax?

Our church for decades has collected a free will offering at the end of the year to gift to our pastor. It does not go through the church books at all,

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Dec 08, 2020

Can churches give a gift to try to get more money for Lottie Moon?

We were wondering if to try to get more money for our Lottie Moon Christmas offering our church wanted to give a coffee mug to those who give and it doesn’t

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Dec 08, 2020

Financial Gifts to an Unsalaried Pastor

Our pastor is not full time and holds another employment. The church gave him a love offering and financial gifts throughout the year that totals more

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Nov 18, 2020

online paperless billing conversion

I am attempting to set up online billing for the majority of our vendors. We have quite a lot and some may not have the ability. I am looking for some

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Nov 18, 2020

Can home renovations be used for UMC household furnishings allowance?

We are planning on renovating the kitchen which would include new cabinets and counters. I have a housing allowance but am wondering if I can make use

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Nov 11, 2020

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.

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Oct 23, 2020

How to Handle Clergy Tax

Clergy tax factors you need to know before setting up your pastor's payroll or to ensure you are doing it right.

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Oct 22, 2020

Opt Out of Social Security Form 4361

For a minister to opt out of social security there are several conditions that must be met before they can file an IRS Form 4361.

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Oct 15, 2020

Love offerings taxable from other churches?

I recently left my position as a worship pastor at a church in Maryland and are relaunching a church in Arizona as the senior pastor. In the process,

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Oct 15, 2020

Taxable for Pastor, but tax deductible for giver?

I'm still unsure about this. I've read quite a few articles and most tend to agree that the love offering donations are taxable income for the Pastor who

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