Why Is My Tax Refund Delayed?

This is no ordinary tax season. The Internal Revenue Service is struggling through this filing season unlike any other in history. The agency is under tremendous strain thanks to the enormous extra burden associated with sending out three rounds of stimulus checks; coping with other pandemic-related changes to the tax code (such as the belated exemption…

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Do Churches Pay Taxes?

Tax season is upon us as individual taxpayers. But when it comes to churches as organizations, do they pay taxes? Like so many things in life, the answer to this question is rather complex. In fact, the real answer to this question is: “Yes, and no.” While it is true that churches, merely by the…

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Reminder – Estimated payment Due on April 15th

Notice 2021-21, issued on March 29, 2021, does not alter April 15, 2021, deadline for estimated tax payments; these payments are still due on April 15. Taxes must be paid as taxpayers earn or receive income during the year, either through withholding or estimated tax payments. In general, estimated tax payments are made quarterly to…

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Charitable Contribution Bundling

Charitable Contribution Bundling  Recent changes in the federal tax code have raised the amount of the standard deduction compared to past years. At the time of this writing, the federal standard deduction is $12,400 per year for single taxpayers, and $24,800 per year for married couples. One of the implications of claiming the standard deduction…

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Ministers Versus Non-Ministry Employees

Ministers Versus Non-Ministry Employees  Churches should make a careful distinction between their paid workers who are acting as ministers versus those who are non-ministry employees. There are several considerations that can only apply to those who qualify as “ministers.” First, ministers can receive a clergy housing allowance, if properly designated, which shields a portion of…

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Employee Retention Credit – Expanded Eligibility

The Employee Retention Credit (ERC) offered relief to certain employers affected by COVID-19 in 2020, in the form of a fully refundable federal payroll tax credit. It was later extended to all four quarters of 2021, with certain changes – most notably the fact that Paycheck Protection Program (PPP) loan recipients can now claim these…

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Surviving spouses not eligible for housing allowance

The housing allowance exclusion is available only to ordained clergy-not to surviving spouses. The tax return for the year in which a clergyperson dies may include, as an exclusion from the gross income of the clergyperson, a housing allowance exclusion for the full period of time the clergyperson was alive. That is, the death of…

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Housing – Fair Rental Value Limitation

In 1971, the IRS issued a Revenue Ruling which imposed the third factor upon clergy who own their own home: the amount excluded from gross income cannot exceed the fair rental value of the housing. This rule was added to Code section 107(2} itself in 2002. According to the above-referenced Revenue Ruling and current publications…

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