Searching For A New Clergy Tax Advisor?
Selecting a tax advisor or accounting firm may initially appear straightforward. However, it’s important to understand the two types of professional services available in our industry. The first type is a “Generalist”, which prepares various tax returns for the general public. These providers may have limited experience with clergy returns, if any. As a result,…
Easy W-2 and 1099 Filing for Churches
Simplify Your Church’s Tax Filing with Clergy Financial Resources Clergy Financial Resources provides an effortless online e-filing solution, whether your church is big or small. Our intuitive service supports W-2 and 1099 form submissions, making the process simple, cost-effective, efficient, and secure. Hassle-Free Filing No Software Required: Your information is securely saved, making each year’s…
2025 Standard Mileage Rates
The standard mileage rate for transportation or travel expenses for 2025 is 70 cents per mile, up from 67 cents in 2024 for all miles related to your ministry or business. The standard mileage rate for charitable use is 14 cents per mile. The standard mileage rate for medical care or as part of a…
Charitable Contribution Substantiation Guidelines
To substantiate charitable contributions, taxpayers must adhere to specific requirements based on the type and amount of the contribution. Here are the detailed substantiation requirements: General Requirements for All Contributions Cash Contributions: Cancelled Check: A cancelled check can serve as proof. Receipt from Donee: A receipt showing the name of the donee, the date, and…
How to report honoraria income?
The best way to report honoraria income for clergy is to include it on Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship). This allows you to report the income and deduct any related expenses incurred in performing the services. Here are the steps to report honoraria income: Gather Documentation: Collect all 1099-MISC…
Explain how qualified charitable distributions work
Qualified Charitable Distributions (QCDs) are a tax-efficient way for individuals to donate to charity directly from their Individual Retirement Accounts (IRAs). Here’s a detailed explanation of how QCDs work, including eligibility criteria, tax treatment, and limitations or special rules that apply: Eligibility Criteria Age Requirement: The IRA owner must be at least 70½ years old…
Determining Worker Classifications
Exempt or Non-exempt? Classifying exempt and non-exempt church employees is just as crucial as distinguishing between independent contractors and employees. Generally, this involves a straightforward separation between salaried (exempt) and hourly (non-exempt) employees, but that is not the only criterion. Organizations must adhere to the Fair Labor Standards Act (FLSA) guidelines to determine the classification…
Defining a minister’s tax home related to travel deductions?
The IRS defines a taxpayer’s “tax home” for travel deductions under IRC § 162(a) as the taxpayer’s regular or principal place of business. If the taxpayer has no regular or principal place of business, the tax home is considered the taxpayer’s regular place of abode in a real and substantial sense. This definition is crucial for determining…
Understanding Clergy Dual Tax Status
Clergy are defined as dual status because they are treated differently for various tax purposes under the Internal Revenue Code (IRC) and Treasury Regulations. Specifically, clergy members are considered self-employed for Social Security and Medicare taxes under the Self-Employment Contributions Act (SECA). Still, they can be regarded as employees for income tax purposes. This dual…
Clergy Housing Allowance and FAFSA
 Clergy housing allowance counts as income for FAFSA purposes. According to IRS guidelines, while the housing allowance is excludable from gross income for income tax purposes, it is not excludable for self-employment tax purposes. This means that the housing allowance must be included for the Free Application for Federal Student Aid (FAFSA), which considers both…
