The separation of accounting duties
There are three functions of the accounting process that should be performed by different individuals: the recording of transactions, the authorization of transactions, and the custody of assets. As an example, when writing a ministry check, the functions of printing the check (recording), signing the check (authorization), and reconciling the bank statement (custody) should be…
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…
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…
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…
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…
IRS Issues Basic Guidance on Payroll Tax Deferral for Churches
The IRS has issued Notice 2020-65 deferring the withholding and deposit of the employee’s share of Social Security (OASDI) taxes on applicable wages. Specifically, the deferral applies to applicable wages paid on a pay date between September 1, 2020, and December 31, 2020. The availability of deferral is based on the date the employee is paid….
Is it a hobby or a business?
Whether it’s something they’ve been doing for years or something they just started to make extra money, taxpayers must report income earned from hobbies in 2020 on next year’s tax return. What the difference between a hobby and a business? A business operates to make a profit. People engage in a hobby for sport or…
Can a storage unit rental qualify for housing allowance?
Question – Can I claim storage unit rental as an expense related to housing allowance? Answer – No. IRS only allows expenses related to your primary residence. A separate storage unit is not attached to the home in any way, so it cannot be used as a housing expense. A similar situation occurs with utility…
Can I contribute to an HSA and an FSA at the same time?
Married clergy often have a choice of health options with their spouse. One common question is whether you can contribute to both an HSA and an FSA at the same time. The answer is usually no, but like most tax questions, there are a few exceptions. IRS publication 969 (https://www.irs.gov/pub/irs-pdf/p969.pdf) answers this question for us:…
What is the difference between vacation time and PTO?
Vacation policies are intended to be used for the specific purpose of vacation or leisure time, and churches who offer vacation time generally offer sick leave as well. The alternative to having two separate benefits is a singular Paid Time Off (PTO) benefit, which may be used for any purpose the employee chooses. Some states…
