Clergy Mileage Reimbursement or Auto Allowance
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
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 for Overtime Employees
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…
New Innovative Ways of Tracking of Receipts
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…
All Tax Preparers Are Not Created Equal For Clergy Returns
All Tax Preparers Are Not Created Equal For Clergy Returns It is not unusual for a minister to rely solely on a general tax professional who may or may not specialize in church and clergy tax matters. It is not enough anymore to just ask if the tax preparer does ministers’ taxes, but ask the tax…
Church Employee Benefits
With the exception of wages and salaries, employee benefits are the primary tools by which churches attract and retain qualified personnel. Most churches voluntarily provide a variety of benefit packages or benefit dollars. Reasons for providing such benefits range from a desire to be competitive in the relevant labor market to a genuine concern for their…
Writing Effective Job Descriptions
Job descriptions are essential in the church hiring process. After all, they are the first thing potential applicants see about your church. Job descriptions can say a lot about your church, and they ensure that applicants and future employees fully understand what the job is about, what their role involves, and what they will be…
Employee vs Contractor
There is no single test for determining if an individual is an independent contractor or an employee. Employee misclassification has always been an important issue and often can trigger IRS attention. Generally, an employee has an ongoing relationship with the church which includes a job description and compensation paid by the hour or salary. A…
Can I Estimate Ministry Miles on My Return?
The IRS requires that you have adequate records backing up your mileage deduction. If you’re audited, the IRS examiner will ask to see your records or log. If you don’t have exact, reliable records, the IRS will ordinarily disallow your entire mileage deduction. This is true even if it’s clear that you did in fact drive…
Timekeeping Requirements for Churches
The federal Fair Labor Standards Act and similar state wage-hour laws require churches to maintain accurate timekeeping records and to pay nonexempt employees for all hours worked in a workweek and to pay overtime for all hours worked in excess of 40 hours per week. Some states also impose daily overtime requirements. To pay employees…
