How does the IRS decide whether a taxpayer is a Minister for Tax Purposes?
The IRS considers individual facts and circumstances to decide if a taxpayer is a Minister for Tax Purposes. Court cases and practices of different denominations have influenced IRS decisions. These five questions will help determine if a person is a Minister for Tax Purposes: Is the person ordained, licensed or commissioned? Does the person administer…
When Paying the IRS, Handle Checks With Care
Always provide the reason for the payment, the form number, and tax year on the front of the check – for instance, “balance due on 2015 Form 1040” or “2016 estimated payment.” Also include your daytime telephone number and Social Security number (joint filers should enter the number shown first on their return). Writing separate…
How Do I Get a Copy of a Social Security Earnings Report?
In the past, the Social Security Administration sent an annual statement of your earnings to you by mail. In 2011, the administration discontinued this service to workers younger than age 60. However, you can still access a basic earnings report for free online or request one by mail. A basic report lists your combined earnings…
Best Practices for Churches with 1099 Individuals
IRS Form 1099 reports to the Federal government various types of taxable income paid to contractors and vendors. There are versions of the 1099 to report payments for services as well as interest, dividends, and real estate sale proceeds. This form is issued by churches to guest speakers, pulpit supply, etc., who provide services in…
The True Cost of Online Tax Software
The research is in. You can get a larger tax refund by using a Clergy Tax Advisor. The initial price of tax software ranges from $29.95 to $104.99. While that doesn’t sound expensive, it’s a small part of the total cost. The true cost of tax software is more than just the price you pay…
7 Steps to Avoid a Tax Audit
One of the most dreaded outcomes of filing your taxes is receiving notification that the Internal Revenue Service would like to administer a tax audit on you. In the simplest terms, a tax audit is an examination of your tax returns to verify that your income and deductions are accurate. The IRS examines your tax…
How do you know if someone has filed a tax return using your Social Security number?
This is happening more and more—the latest General Accounting Office (GAO) report says that IRS paid out over $5.8 billion in fraudulent returns in 2013. The IRS does have security measures in place to verify the accuracy of tax returns and the validity of Social Security numbers submitted, but that hasn’t stopped the bad guys…
IRS Dumps Proposal to Ask Charities for SSNs of Donors
The Internal Revenue Service has dropped a proposed regulation giving tax-exempt organizations the option of providing the Social Security Numbers of their donors. The rule, which the IRS and the Treasury Department proposed last September, called on charities to ask for additional personal donor information, including Social Security numbers for any donation of $250 or…
Clergy Estimated Tax Payments
Clergy are subject to estimated tax payments on a quarterly basis which include federal, social security and state taxes. For example, when you receive clergy income in the first quarter of the year, the taxes are due at the end of that quarter. The year is divided into four payment periods, or due dates, for…
Beware – Clergy Audits are on the Rise!
During tax season and throughout the year, IRS agents carefully review every tax return that comes across their desks. However, agents take a second glance if they catch something on a return that seems abnormal. These categories often include charitable contributions, ministry expenses reported on form 2106, SE income, IRC 265 and other business expenses. This…
