The IRS will begin issuing refunds this week to eligible taxpayers who paid taxes on 2020 unemployment compensation that the recently-enacted American Rescue Plan (ARP) later excluded from taxable income. These corrections are being made automatically in a phased approach. The first phase of adjustments is being made for single taxpayers who had the simplest…
Quarterly Tax Payment Deadline & Voluntary Withholding Now that the May 17 deadline for filing federal tax returns has passed, the next deadline that is relevant to many ministers is the quarterly estimated tax payment due on June 15, 2021. Ministers are Exempt from Withholding Requirement: Ministers are exempt from having employing churches withhold…
The approaching summer season is often a time of transition. During this time of year churches frequently hire new employees who relocate to serve the church. Ministers and other church employees sometimes find new opportunities and make a change during the summer months, between school years. Coming out of the disruptions caused by COVID-19, many…
There are certain documents all churches should keep in an important place for future reference. File-Stamped Formation Document, and Amendments: For any church that is incorporated, it is important to retain a copy of the Articles of Incorporation, or Certificate of Incorporation, that was filed with the state or county. Once filed, this document will…
Important Documents for Ministers to Keep There are certain documents all people should keep in an important place for future reference, such as a birth certificate, a social security card, or a last will and testament. For ministers, there are a few other important documents that should be retained and kept in a safe place….
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…
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…
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…
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…
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…
