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.

Sep 10, 2022

Housing Allowance

Is Housing Allowance included on Form W-2, Box 1 (Wages, Tips, Other Compensation)

Continue reading "Housing Allowance"

Sep 10, 2022

What day can I start counting expenditures towards housing allowance? First official start day at work or before that?

What day can I start counting expenditures towards housing allowance? First official start day at work or before that? I moved from one state as a pastor

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Sep 10, 2022

Can a pastor give back/donate his housing allowance to the church as a charitable contribution?

Due to COVID, receipts of cash contributions were low. The church had me do a W2 for pastors housing allowance. The fact is they now are asking me

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Aug 21, 2022

Youth minister housing allowance

Can our youth minister have his entire salary in housing allowance since he is bi-vocational?

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Aug 21, 2022

What is the housing allowance cap?

We are a small congregation less than 40 persons. In the past we have not designated a 'Housing allowance' and given the pastor a 1099-Misc for the

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Aug 21, 2022

Love gift to worship team

if we give a love gift to members of the worship team will we have to issue a 1099-misc if it is over $600.00? Susan

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Aug 14, 2022

Pastor "donates" his own 401k(k) to a church to build him a "parsonage" which will be reconveyed back to him when he leaves the church.

Can a pastor donate his own 401(k) or 403(b) assets to the church, thereby, avoiding the taxes on the withdrawal of the funds then get the church to build

Continue reading "Pastor "donates" his own 401k(k) to a church to build him a "parsonage" which will be reconveyed back to him when he leaves the church."

Aug 14, 2022

Wedding use of building -- donation

Can we give a contribution receipt to a family that made a monetary donation to the church that used the building for a wedding? They are not members

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Jul 03, 2022

Church owned Parsonage plus housing allowance, can the same Pastor have both?

Our Church owns a Parsonage which our newly chosen ordained pastor and his family will live in. It is my understanding that the fair market (utilities

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Jul 03, 2022

Is the 7.65% social security allowance hard and fast or can a different amount be offered

Is the 7.65% social security allowance hard and fast or can a different amount be offered?

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Jun 20, 2022

Housing Allowances from 2 Different Work Places

I work in two places, one is a hospice chaplain and a church pastor. These two places that offer housing allowances, is it legally correct to receive housing

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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

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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

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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.

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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

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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

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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.

Continue reading "HA pay is only recorded in church financial books and not declared elsewhere except by letter to the clergy...correct?"

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?

Continue reading "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

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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

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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:

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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

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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?

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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

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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

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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

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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

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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

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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

Continue reading "Hourly Employee Housing Allowance"

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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