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.

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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Oct 15, 2020

A Pastor who is collecting Social Security retirement benefit, but still works for the church...

If a Pastor is retired from secular work and is collecting Social Security, is he still limited to what the church can pay him without interfering with

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Oct 15, 2020

Tax Deferred Retirement Account

We have a new interim pastor who wants $19,000 cash salary, $20,000 housing allowance, and $26,000 deferred compensation. He has set up an account with

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Oct 15, 2020

Non-requested Donations?

I am a commissioned counseling minister and also ordained by a church and act as a pastor with no salary. When I begin a counseling relationship, I take

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Oct 15, 2020

Local church giving money to parishioners to invest

A local church in mt are gave parishoners thousands of dollars to invest for the next several weeks. Then they give it back, and interest collected goes

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Oct 15, 2020

Should all types of giving be recorded on the end of year contribution statement.

My church accepts Tithes and Offering 3 different ways. In person giving during service, through Givelify an online giving site, and through cash app.

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Sep 17, 2020

Does your church or denomination have to sign anything when you inform them of the opting out?

We are paying someone to help us with the completion of form 4361. They are asking me to send a 'letter of intent to exempt'. This form needs a signature

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Sep 17, 2020

Non-Cash Gift for Pastor

Our pastor announced his resignation earlier this month. Our deacon board decided to hire someone to paint a painting of our church as a farewell gift.

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Sep 09, 2020

Need a official W-2 and W-3

How do I obtain a W-2 and W-3 to complete for my pastor? I have signed up thru the IRS several times but it will not let me download the forms. Tired

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Sep 09, 2020

Accountable reimbursement plan vs. church credit card

If each pastor has a credit card in the church's name that is paid for by the church, to be used for church/ministry expenses, is there any reason to also

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Aug 24, 2020

How to record donations by check

How should a nonprofit record donations by check, specifically when it is from a joint bank account? Should they be recorded as being from the person who

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Jul 14, 2020

H&R Block Housing Allowance for pastors

I had to go back and file my 2018 taxes. I am using H&R Block software. The church I pastored did not report my housing allowance on the W-2, which was

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Jun 01, 2020

With Aplos, are there transaction fees for using online giving in addition to the monthly subscription?

Are there transaction fees for using online giving in addition to the monthly subscription? Many sites charge 2%-5% of the transaction amount plus .30

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Jun 01, 2020

2 year rule

My husband and I went into ministry 6 years ago. When I filed our taxes with H&R Block, I inquired about why we were paying self-employment taxes. I

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May 08, 2020

State Sales Tax - LA

Louisiana does not exempt churches from sales tax. Sales tax not collected at time of purchase on items used in the operation of the church such as bibles,

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May 05, 2020

Accounting for PPP Funds

Bookkeeping for PPP funds for churches

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May 03, 2020

Housing Allowance in year of retirement.

My housing allowance of $25,000 for 2020 was adopted by the Board in December 2019. I will be retiring on July 31. Can I claim on my 2020 tax return

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May 03, 2020

Housing Allowance and the 941 Form

We do not provide a salary for our pastor, only a weekly $200.00 housing allowance. Should we include this amount on the 941 Quarterly form?

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May 03, 2020

How to handle voluntary Fed and State tax withholding for pastors with 100% salary as housing allowance

I am the treasurer for a small church. We have 2 employees, both pastors, who have elected to be employees for tax reporting purposes. Due to their housing

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Apr 22, 2020

Pastor Employed with HA & recieving retirement with designated HA ???

Can a minister who is 69 and presently an employee of his church and receiving a housing allowance also use a housing allowance designated by his retirement

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Apr 22, 2020

Down Payment on New home & Housing Allowance

When a pastor moves to a new church and buys a new home, does the down payment on a new home factor into minister’s housing allowance?

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Apr 22, 2020

When to report FMV of church owned property for minister

We have a new minister joining our staff. The plan is for he and his wife to use dual living space - their primary home and a church owned property - until

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Apr 22, 2020

Question concerning how church organist is paid

As pastor, I have just become aware that we are paying our church organist by sending her pay to her landlord for a partial on her rent. A lawyer that

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Apr 22, 2020

Unemployment compensation

As independent contractor, organist, now that churches are closed during pandemic. Can I collect unemployment?

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Apr 22, 2020

Designated Accounts

Our church borrowed money for a building. Debit Bank / Credit Note Payable This makes my bank balance but ... How do I get the money into the designated

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Apr 22, 2020

Part Time Youth Minister - Full Time Secular Job

Our youth minister is part time. We have been treating him as an employee withholding SS, State tax, and Fed Tax. He has a full time secular job where

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Apr 22, 2020

Tax return software that will accept a clergy W2 with box 1 empty

For a minister working part-time and all of his salary is designated housing allowance, what software program will accept a clergy W2 with box 1 empty?

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