Guide to Clergy Compensation

Clergy Status is a person who has been granted ecclesiastical authority by an association, denomination, or state through the rite of ordination, commissioning, or licensing. 1. Generally, an ordained minister has a Master of Divinity from an accredited theological school and is recognized through the rite of ordination to preach and teach the gospel, to…

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Can I still claim my dependent if they live at school and are on scholarship?

In order to claim someone as your dependent, there are five tests: relationship, age, residency, support and joint return. Most of these tests are pretty straightforward, but we get a very common question about residency: “If my dependent is away at college for nine months out of the year and gets a scholarship, can I…

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Are student scholarships taxable?

If you or your dependent receives a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free. Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions: You or your dependent is a candidate for a degree at an educational institution that maintains…

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Should my church outsource our bookkeeping?

Church bookkeepers have for a long time been confused with accountants. They, however, carry very different responsibilities. Bookkeepers maintain the financial records of the church that includes income and expense records. They are supposed to keep records of the dates and amount of every transaction of the church. It is also their task to keep…

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I received an adjustment notice from IRS

IRS is starting to issue adjustment letters on 1040 returns that were filed back in April. If you receive one of these notices, don’t panic. Instead, follow these simple steps to figure out what to do. Read the letter in full. It should explain what part of the return they are adjusting, whether it is…

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Five Tips for Managing Your Church Budget During the COVID-19 Crisis

None of us could have anticipated what this spring was going to be like when 2020 church budgets were being prepared last summer or fall. Yes, we are in unfamiliar territory.  Two-thirds of self-identified church leaders say giving to their churches has dropped significantly since the COVID-19 pandemic became widespread nationwide in March—with sizable numbers…

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Use caution before making political statements

On July 28th of 2020, the IRS published the following guidance on Churches making political statements. “Under the Internal Revenue Code, all section 501(c)(3) organizations are absolutely prohibited from directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office. Contributions to…

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FAQ: 1040 Extension Deadline

We are one month away from the extended deadline for 1040 filings. Here are answers to many of the frequently asked questions we receive this time of year. When is the filing deadline? The extended filing deadline for the 2019 1040 return is October 15th. Can I get an extension past October 15th?                 No,…

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FAQ for Churches: Leave under the Families First Coronavirus Response Act (FFCRA)

Q. My employee’s child’s school is operating on an alternate day (or other hybrid-attendance) basis. The school is open each day, but students alternate between days attending school in person and days participating in remote learning. They are permitted to attend school only on their allotted in-person attendance days. Can the employee take paid leave…

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