Top Three Clergy W-2 Mistakes

Listing wages or withholdings in Boxes 3 through 6. Clergy are treated like self-employed individuals in regards to Social Security and Medicare taxes. They should not have taxable Social Security or Medicare wages, and they should not have Social Security or Medicare withholdings.  Including the Housing or Parsonage allowance in places that it shouldn’t be….

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No Time Like the Present to Make Amends (to your Tax Returns!)

If you find out that you forgot to report something on your tax return or you get a corrected W-2, it’s not the end of the world. You will probably just have to amend your tax returns to include the correct information. However, there are some very important reasons why you should submit amendments as…

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Church Responsibilities – I-9 Audit

In accordance with federal law, all individuals hired by the church are required to establish and certify their identity and right to work in the United States. Individuals employed in the United States are required to complete Section 1 of the Form I-9 no later than their first day of employment. This may be completed…

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What happens if I overspend my housing allowance?

A very common question in Clergy Tax Preparation is “If I designated X as my housing allowance, and I overspend it, what happens?” Many believe that overspending your housing allowance will result in a penalty or getting into trouble with the Internal Revenue Service. This is not true. Let’s look at a scenario to show…

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What is Honoraria?

The dictionary defines honoraria as “a payment given for professional services that are normally rendered without charge” or “a payment in recognition of acts for which custom or propriety forbids a price to be set”. This would include payments made for things like weddings, baptisms, funerals, pulpit supply or speaking engagements. In most situations, it…

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Payroll Compliance – Form I-9

We receive a lot of questions about the I-9—the form used to verify the identity and employment authorization of all individuals hired for employment in the United States. Here are some of the most common: 1: How Should I-9s Be Stored? Separately. We recommend that you keep all I-9s in either a separate master file or…

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Cut-Off Date for 1040 Documents

This message is intended for Clergy Financial Resources clients who extended their 1040 return to October 15th. If you turn in your 2018 tax organizer and supporting tax documents by close of business on Mon, Sept. 16th, Clergy Financial Resources can guarantee filing by the October 15th deadline. If you miss the Sept. 16th cut-off,…

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Safeguard against Church Embezzlement

One of the last places you would expect embezzlement is within the financial offices of a Church. However, if you search the news for “church embezzlement”, you will find it is actually becoming a very common event. Many of these stories begin with a financial crisis. An employee has a mortgage that can’t be paid,…

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A New Benefit: Student Loan Repayment

Churches looking for new ways to compensate their clergy or attract new clergy must distinguish themselves from other churches. Creative benefit packages often do the trick, particularly if they address specific needs. With more and more seminary graduates entering the workforce and more and more of them graduating with substantial debt, some churches have created…

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Refunds Lost After Three Years

IRS does not charge any penalties for filing your 1040 return late if you are due a refund, but don’t put off filing for too long. IRS has a three year statute of limitations on refunds, starting with the original due date of the return. This means that if you file after the three year…

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