Do you need to file a nonresident state return? Generally, you’ll need to file a nonresident state return if you made money from sources in a state you don’t live in. Some examples are: Wages or income you earned while working in that state Out-of-state rental income, gambling winnings, or profits from property sales S…
Gathering documents for tax season In preparation to file individual federal, state, and local income tax returns, this is the season to gather documents. Some of the documents need to be submitted with federal, local, and state tax returns, and will therefore be needed in the immediate future. Other documents should be retained by the…
Don’t miss the 100% meals deduction The Consolidated Appropriations Act, 2021, increased the business-meal deduction for the cost of food and beverages provided by a restaurant from 50 percent to 100 percent in 2021 and 2022 if certain conditions are met. The IRS on April 8 issued Notice 2021-25 to provide guidance on the higher limit for…
Can the church pay student loans tax-free? The Coronavirus Aid Relief and Economic Security Act (the “CARES Act”) provides a way for churches to provide both tuition, books, supplies, and student loan payments tax-free through January 1, 2026. The Coronavirus Aid Relief and Economic Security Act (the “CARES Act”) of IRC Section 127 allows churches to reimburse up to $5,250 per employee, per…
Commuting expenses deductible? You cannot deduct the costs of taking a bus, trolley, subway, or taxi or driving a car between your home and your main church or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your church or regular…
Understanding Clergy W-2 Form By January 31st, an employer must give or mail an employee’s copies to each employee from whom the tax was withheld during the year or wages paid for services. For employees whose employment ends before the end of the year, W-2 Forms can be supplied any time after employment ends, but…
Nontaxable income for clergy These are examples of sources of income that are non-taxable: • Qualified love gifts (person-to-person and within limits) Cannot be solicited Must be spontaneous in nature Must be clearly ascertainable as a gift with no service attached Cannot qualify as a tax donation for the donor Are motivated out of affection…
Should we have a COVID section in our employee handbook? While COVID will continue to affect our workplaces for some time, we generally recommend not adding COVID policies directly to your handbook. Guidance from the Centers for Disease Control and Prevention (CDC) continues to evolve, and federal and state laws related to the pandemic will…
What Are Credits and Deductions For Tax Purposes? Tax documents are currently arriving in mailboxes and inboxes, reminding us all that tax season is rapidly approaching. A recent blog article discussed the subject of what is income for tax purposes. This article will give a brief and broad overview of what credits and deductions are…
Reporting the Housing Allowance The designated housing allowance may be reflected on Form W-2 in Box 14 with the notation, “Housing Allowance.” Though not required, this reporting method is suggested by Publication 517. Or, a church can report the designated housing allowance to a minister by providing a statement separate from Form W-2. This may…
