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.

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

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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.

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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

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Oct 18, 2021

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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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

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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

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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

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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

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Aug 31, 2021

Is there a fee for this service?

Hello - just checking to see if there is a fee to ask questions? Also, we can see questions from others, but when I click on them, I don't see the answers??

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Aug 13, 2021

housing more than box 1

Tax preparer here..I have a client that shows box 14, housing allowance. Box one, shows taxable amounts that are LESS than the amount in box 14. Should

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Aug 13, 2021

Social Security Offset

Can a church pay clergy housing and social security offset but no cash salary? Ex) Housing $22,000 & SS Offset $1683 & Cash Salary $0

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Jul 21, 2021

Free Financial Assessment for a Church

See a free financial assessment that will help churches learn where they are and where they need to be financially.

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Jul 16, 2021

IconCMO

Since 1992, Icon Systems has been developing high-quality software exclusively for non-profit religious organizations. The company was founded in 1992

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Jun 30, 2021

Can a missionary that is licensed to the gospel ministry still claim the exemption (see below)

I am a full time missionary for a missions organization. I get paid monthly by organization and they are offering to give me a housing allowance. My questions

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Jun 30, 2021

Reporting sale of fixed asset

Does a church need to report the sale of a fixed asset to the IRS?

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Jun 30, 2021

Taxable Liability for Love Offering/Severance Package

Our church has unfortunately been forced to sell our property and we are in the process of dissolution. Because our minister is in his early 70's, he

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Jun 20, 2021

In box 1 for W-2 for a minister... is the the gross minus the pre-tax items such as medical and dental

I need to know what is included in Box 1 on the W-2 for a minister... is it the gross salary and all the allowances minus the housing and 401K.. or is

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Jun 20, 2021

Car Expense

Previously our Pastor was receiving a car allowance. Which was the same amount each month and added to his salary check, along with his housing allowance.

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Jun 20, 2021

Dues paid for ministers

If a church pays offerings that is owed by a minister to a church district office, should this be withheld from the ministers gross pay? The minister

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May 31, 2021

1st year of a New Church Plant with all Pay designated as Housing

100% housing is paid to our pastor, we are a new church and are wondering what forms is the small church required to file with IRS or SSA. By the way,

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May 31, 2021

Uncashed Check Donated Back to the Church

We have recently been going through our bank accounts and dealing with a couple dozen checks that we have written out over the years that have never been

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May 31, 2021

Regular Financial help to a widow in our church.

We would like to give regular financial help to a widow in our church. Is that taxable to her and if so what form would we use to report it to IRS and

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May 31, 2021

Other donation from church

I received other donations from the church that is not a part of my salary, such as Pastor appreciation, vacation pay, birthday etc, from the church. It

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May 16, 2021

FICA being withheld from Housing Allowance.

I am working on a tax return for a minister who is an employee of the church and receives a housing allowance. On the w-2, the housing allowance in included

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May 16, 2021

If your actual housing amount is more than your designated housing allowance, are you able to deduct it on your tax return?

If you are a minister and you have designated a housing allowance but your actual housing expenses are more than your housing allowance, are you able to

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Apr 24, 2021

IRS Regulation regarding value of Computer kept upon leaving?

We are a very small church, trying to codify our Accountable Reimbursement Plan. When our pastor is reassigned, we want to give the option for them to

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Apr 24, 2021

Won't 100% housing allowance avoid the church having to pay FICA?

If board approval says that they are only going to pay the pastor 100% housing allowance, without payroll, than this would avoid the church having to pay

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Apr 24, 2021

Interim Pastor - Statutory Employee?

My father is an interim pastor for his church and received a W-2 amounts in Box 1 Wages and Box 2 FIT Withheld. Box 13 was also checked for statutory

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Apr 24, 2021

Can Housing Allowance be reduced from self employment tax (with an appropriate schedule)?

Is the entire housing allowance portion reported as wages for self employment tax, on schedule SE (box 5a of 2020 tax year) OR can I reduce the housing

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Apr 24, 2021

Prorated Final Paycheck - treatment of Housing Allowance

Our pastor has put in his notice and his last day will be in about a month (mid-May). He is not currently going to another congregation. He has asked

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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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