Below is a To Do list for churches and nonprofits that you can and should start on right now. I know that December and January is 2 of the busiest months of the year for us church and nonprofit administrators, so write down your To Do checklist now and make sure you don't miss any of the important tasks due before January 31st!
(Joining my monthly newsletter mailing list will help keep you informed each month=)
As in years past ...you should furnish Form W-2 to employees who worked for you during the past year by Jan 31st.
HOWEVER, your transmittal form W-3 (cover page for all your W-2s) is now due the end of January as well...even if you file electronically! (This should be a top priority o your January to do list!) Read More!
ALSO by January 31st, you must furnish Form 1099-MISC to individuals that you paid amounts $600 or more to last year for performing a service for your church or nonprofit. AND just like the W-3s...your transmittal form 1096 (cover page for all your 1099s) is now due by Jan 31st as well! Read More!
A few years ago, the first of the year fell on Sunday and caused some misunderstandings on which year a contribution is recorded in. For future years' reference: a donation is recorded when received ...even if the check is dated for the previous year. The only exception to that rule is if you receive a check in the mail and it and the envelope is dated Dec 31st or before. Read More!
If you haven't done it yet...make sure you review your pastor's compensation package. See this Year-End Checklist for important factors to remember when reviewing or setting up this package.
Review and adjust your minister's housing allowance. Even if you already have a housing allowance set up for your minister, you need to review it and adjust it if applicable before the end of January. Read More!
If you don't have an accountable reimbursement policy in place...make this number one on your to do list! With the new tax laws and the loss of the ability for your employees/ministers to claim unreimbursed employee "business expenses", it is imperative that you have an Accountable Reimbursement Plan set up! Read More!
The Church Accounting: How To Guide devotes a whole section of the book to payroll for churches. It covers payroll terminology and forms and then takes you through the steps necessary to set up a payroll, calculate and file the necessary taxes and forms, and even details how to handle the minister's payroll. It also includes sections on filling out IRS forms: 1099 and 1096.
If you have QuickBooks or are considering using it in the future, go ahead and purchase the QuickBooks for Churches and the How To Guide combo for a complete package on setting up and administering a payroll using QuickBooks.
Ministers--your estimated taxes are due for the fourth quarter (Oct – Dec) of last year. You can usually skip this fourth quarter payment if you intend to file your return and pay all the taxes due by January 31. Read More!
Now is the best time to implement a new accounting system. If you are uncomfortable with setting up your own accounting system, consider hiring a company that specializes in setting up effective accounting systems for churches such as my bookkeeping company: Vickeys Bookkeeping. Read More!
Send out annual contribution statements to your donors on or before January 31. Make sure you let your donors know that they should not file their federal income tax return before they receive a written acknowledgement of their contributions from the church....especially if they are claiming charitable contributions tax deductions! So put on your December to do list to post a notice on the bulletin board telling donors NOT to file their personal income tax returns until they receive their annual giving statement if they plan on claiming charitable contributions as a tax deduction. Other ways to inform your donors is to send out letters, include a notice in your December newsletter, post on your website, etc. Read More!