Court Rulings Regarding Charitable Contributions—
Tax Court Denies Deduction for a Member’s Contributions to His Church A tax court denied a church member’s charitable contribution deductions to his church for lack of substantial information. The church member claimed that his bank savings account register was proof that he made charitable contributions because it showed these withdrawals. The court denied these…
What is the Difference Between FICA and SECA?
Social Security taxes or contributions are collected under the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act (SECA). Many people refer to contributions to Social Security as either FICA or SECA taxes. While FICA and SECA may sound similar, they are just two different ways for the government to collect Social Security and Medicare taxes. The big…
Property Tax Exemption for Parsonages
Some states exempt parsonages from property taxes which can either be homes owned by churches and occupied by clergy who serve a local church. California California property tax laws provide for three exemptions that may be claimed on church property: • The Church Exemption, for property that is owned, leased, or rented by a religious…
How to Write a Church Donor Acknowledgement Letter
The IRS sets out that acknowledgments must be provided “in writing, at the time of solicitation or when the payment is received, and in a way that will come to the attention of the donor,” according to IRS Publication 1771. For the letter to be considered “contemporaneous” with the contribution, “a donor must receive the acknowledgment by…
What Is Self-Employment Tax?
When a church hires a worker, one of the initial decisions that must be made is whether to treat the worker as a minister, non-minister employee or contractor. This decision may seem insignificant, but it has huge implications when it comes to payroll. Ministers have what is commonly referred to as “dual tax status.” For…
Can a church offer a Health FSA without a medical plan?
If the church has a group health plan, you may want to consider a Health Flexible Spending Account (FSA). A health flexible spending account (FSA) is a type of tax-advantaged medical account that reimburses employees for eligible health care expenses that are not covered by their health plans. Both employees and employers can contribute to a…
How to Value Noncash Charitable Contributions
If you donate property to a nonprofit such as clothing, electronics, books, or furniture, you need to determine how much it is worth when you donate it. The basic rule is that you may deduct no more than the property’s “fair market value” at the time of the donation. But fair market value can be…
How to Survive an IRS Audit
An IRS audit can be a very frustrating process. With that said, it is important to understand that it is nothing personal. In other words, it is not as if this particular IRS agent singled you out and decided he or she wanted to audit you. Therefore, try to stay calm and keep in mind…
Strategic Management of Vacation Requests
You want to support employees by providing the opportunity for work/life harmony, but you also have a church to run. Sometimes it is difficult to juggle multiple vacation requests around popular vacation times, especially during the summer months and other holiday times throughout the year. Below we have provided a few tips, suggestions and best…
Advantages of a Premium Only Plan
If your employees pay a portion of their group insurance premiums, you may be able to reduce your payroll taxes, and give workers a little extra in their checks each and every payroll, by setting up premium only plan (POP) through payroll deductions for their share of insurance premiums. The Section 125 POP program is a…
