Can a Church Give an Employee Loan? During times of economic hardship, individuals may approach their employer and request a personal loan in order to help make ends meet. If an employee of a church requests a personal loan from the church, there are several issues to consider. As a matter of policy, will the…
The three best ways to contribute to charity
The three best ways to contribute to charity Cash Donations Outright gifts of cash (which include donations made via check, credit card, and payroll deduction) are the easiest. The key is to substantiate them. To be deductible, cash donations must be: Supported by a canceled check, credit card receipt, or written communication from the charity…
What is the Tax Treatment of Forgiven Student Loans?
What is the tax treatment of forgiven student loans? Now that President Biden has announced student loan relief, the state tax treatment of forgiven loans is of interest to many ministers. Ministers who have student loans forgiven are spared a federal tax bill, but not all states treat forgiven loans the same. A forgiven loan amount is…
403(b) contribution limits
403(b) contribution limits Most workers have heard of 401(k) plans and their usefulness in saving for retirement, but other tax-favored retirement savings vehicles are available to certain employees. For those who work in education, medical professions, or nonprofit organizations, many employers offer 403(b) plans. 403(b) plans are similar in many ways to 401(k)s, and one thing they…
Can you modify housing allowance mid-year?
Can you modify housing allowance mid-year? The Housing Allowance can be amended (changed) as often as needed.  We always recommend overestimating when designating a housing allowance.  The goal would be to have enough of a buffer in the designation to end up with unused housing at the end of each year.  This eliminates the need to…
What Does Clergy Dual Status Mean?
What Does Clergy Dual Status Mean? Under federal law, most ministers have dual tax status. Dual tax status means a minister is an employee of the church for federal income tax purposes, and self-employed for Social Security and Medicare taxes. For ministers, wages are reported in two different ways: Federal Income Tax = Employee status…
Do you need to file a nonresident state return?
Do you need to file a nonresident state return? Generally, you’ll need to file a nonresident state return if you made money from sources in a state you don’t live in. Some examples are: Wages or income you earned while working in that state Out-of-state rental income, gambling winnings, or profits from property sales S…
Gathering documents for tax season
Gathering documents for tax season In preparation to file individual federal, state, and local income tax returns, this is the season to gather documents. Some of the documents need to be submitted with federal, local, and state tax returns, and will therefore be needed in the immediate future. Other documents should be retained by the…
Commuting expenses deductible?
Commuting expenses deductible? You cannot deduct the costs of taking a bus, trolley, subway, or taxi or driving a car between your home and your main church or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your church or regular…
Nontaxable income for clergy?
Nontaxable income for clergy These are examples of sources of income that are non-taxable: • Qualified love gifts (person-to-person and within limits) Cannot be solicited Must be spontaneous in nature Must be clearly ascertainable as a gift with no service attached Cannot qualify as a tax donation for the donor Are motivated out of affection…
