Every year, millions of Americans become victims of identity theft. Identity theft occurs when someone steals your personally identifiable information and pretends to be you. They can use this information to open bank or credit card accounts, file taxes, or make new purchases in your name. It is important that you take steps to protect…
FICA stands for “Federal Insurance Contributions Act.” This is the law that funds both Social Security and Medicare through payroll taxes. Churches share this cost with their employees. Your FICA contributions earn Social Security credits. For 2016, you need to make $1,260 in wages to earn one credit. You can earn up to four credits a…
Clergy Financial Resources has been the leading provider of tax, payroll and HR solutions exclusively for religious organizations and clergy for over 36 years. Every client is unique, every situation is different. https://www.clergyfinancial.com/
Clergy Continuing Education Churches should expect pastors to be involved in continuing professional and theological education programs which provide opportunities for personal development, enrichment of devotional life, and growth in pastoral effectiveness and competency. The purpose of continuing education is “professional growth” and “self renewal” as distinguished from program development, vacation, or pastoral leadership retreats….
Designate a Clergy Parsonage Allowance (for clergy living in unfurnished parsonages) Designating a portion of salary as a “Parsonage Allowance” provides the single best tax advantage offered to clergy living in a parsonage. A parsonage and/or furnishings allowance may be designated as a portion of annual salary and may be used by a pastor for maintaining and furnishing…
Payment to Supply Pastors Generally, the payment to supply pastors is $175 for one worship service, and $75 for each additional service/adult forum/Bible study on the same day and at the same location. Travel should also be reimbursed at the current IRS rate per mile, plus applicable parking, ferry, and road or bridge tolls. The payment…
Mileage Reimbursement/Auto Allowance A church and its pastor(s) can work together to maximize the reimbursement of professional expenses, which are typically paid out–of–pocket with after–tax wages by the pastor. These expenses can include mileage, cost of periodicals, books, professional supplies, conferences, etc. Using methods that meet the IRS requirement for “Accountable Reimbursement” plans, a pastor can…
Clergy Social Security Allowance The IRS has ruled that clergy are self-employed for purposes of paying social security taxes. This means that they must pay both the employee and the employer share of social security tax under the Self-Employed Contribution Act (SECA). Churches are prohibited from paying FICA tax for clergy but are encouraged to pay…
Implementation strategies There is no one-size-fits-all strategy to comply with these new overtime regulations. Every church will have different needs, but among the options are: Maintaining current salary levels and paying overtime Bumping salaries over the threshold to prevent paying overtime Changing staffing levels to reduce overtime needs Preparing for change If you get started well…
One thing you learn over the years is that keeping receipts is essential. Whether it’s to double-check an odd entry in the accounting software or to know you’re covered if the IRS comes calling, you have to have them. Of course, this can create a mountain of receipts every year, so you need a plan…
