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…
What is the Gift Tax Exemption in 2020?
If you gave a large gift or received a large gift, you may be wondering about gift tax. Here’s the details on this rare tax: Gift tax is never paid by the recipient. If someone gifts you $30,000, you don’t have file a gift tax return or pay gift tax. The giver is responsible for…
Tax-Filing in 2020: What Is My Tax Bracket?
If you are keeping an eye on next year’s taxes, you should know that the tax brackets for 2020 are available. All of the brackets are the same as 2019 (37%, 35%, 32%, 24%, 22% and 12%), but the thresholds have slightly increased. This means if you are earning the same taxable income in 2019…
Now what! I received a letter from the IRS.
The first reaction by most taxpayers when they find out they are being audited by the IRS is crippling fear. An audit occurs when the IRS has reason to believe that the tax you paid is not what should have been collected. The IRS wants to investigate how you calculated your tax due for the…
