"Love Offerings" for Guest Speakers, Singers, Musicians, Pastor's Birthday

David, I was looking through old posts and saw your questions were left unanswered. I apologize and here are my replies (maybe your questions and my replies can help others wondering the same thing):

Question 1 - Are designated contributions for a needy church member or family deductible by the donor? (I'm thinking 'no')

Vickey: Depends =) If you have a benevolence fund set up and someone gives a donation to that "fund" (not specifying that it goes to a certain individual) ...their donation is considered a tax-deductible charitable contribution and the church can issue a donation receipt for it. But if they tell you they want their gift to go to certain needy member or family... it is NOT a tax-deductible contribution and should be excluded from their annual giving statement

Question 2 - Are designated contributions for guest speakers, singers, musicians deductible by the donor? (Again, I'm thinking "no" because it is designated).

Vickey: Yes. Those donations can be considered tax deductible contributions...if the church is in "control" of those "gifts". For example, the church takes up a love offering and all of the monies received are deposited into the church's account. Then the CHURCH decides how much to give that individual for an honorarium or love offering... then the donor's gift is tax deductible and should be issued a giving receipt AND in turn... the "payment for services" to that guest speaker is taxable income for them and if $600 or more …a 1099 must be filed.

Question 3 - Are designated contributions reportable income by the needy member or family and therefore require the issuance of a 1099-MISC? (I'm thinking "no" because it was not for services rendered and not solicited).

Vickey: Benevolence (if handled correctly) is NEVER taxable income to the recipient and should NOT require a 1099.

Question 4 - Are designated contributions reportable income by guest speakers, musicians, etc. and therefore require issuance of a 1099-MISC? (I'm thinking "yes" because it was for services rendered)

Vickey: Yes. Payments to guest speakers, singers, musicians (careful on this one as they may be classified incorrectly… *see more below) are taxable income to the recipients and if you pay them $600 or more "collectively" in a calendar year, a 1099-NEC will be required.

*Guest speakers, evangelists, singers, etc. that come to your church and speak, sing, teach, etc are usually considered IC (Independent contractors-1099NEC recipients) for the service that they render at your church; however, a musician that plays at your church ONLY and doesn’t perform that same type of service at other places are usually classified as employees by the IRS. Same thing goes for janitors and nursery workers.

What are the specifications regarding fundraising money collected by pastor's aide committee with 100% of the money made going directly to the pastorpastor and none to the church

What if I decide to give $100 cash to the visiting preacher as a love gift; should the $100 flow through the church and then given to the preacher or can the cash be given directly to the preacher?

Cyndi, all donations should be made payable to the church and deposited into the church bank account and entered into the church's accounting records.

If a donor wants to write a check directly to the musician, then they need to do it personally and not thru the church.

Issue a check to the guest musicians only AFTER a W-9 has been completed and signed. Make sure they indicate on the W-9 if the check should be issued to an individual or a nonprofit organization.

You are correct about the "no W-9 withholding" too.

I too, am looking for clarification on the church's responsibility when offerings are taken for guest musicians. Is it ok for attendees to write checks directly to the musician? Or must the donations go through the church books, along with a W9 indicating 501(c)3 status? AND, if there is no W9 presented, are we required to withhold backup taxes at 38%? It has been a source of repeated consternation in our church. Thanks for any and all help!