Improving Compensation for Church Staff

A Holistic Approach In the landscape of church leadership and ministry, ensuring that staff are adequately compensated is not just a financial necessity but a spiritual and moral imperative. Church staff members dedicate their lives to serving the congregation and community, often working long hours with a deep sense of calling and commitment. To sustain…

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Are Churches Automatically Tax Exempt?

Churches are automatically considered tax-exempt under IRC Section 501(c)(3) and are not required to apply for and obtain recognition of tax-exempt status from the IRS. However, many churches seek formal recognition of their tax-exempt status from the IRS to assure church leaders, members, and contributors that the church is recognized as exempt and qualifies for related tax…

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Church Administrators: Managing Clergy Reimbursements

A church office administrator should handle reimbursement for clergy through an accountable reimbursement plan. Here are the key steps to follow: Establish a Written Policy: Create a written expense reimbursement policy that outlines which expenses are eligible for reimbursement. This policy should include ministry-related expenses such as travel, office supplies, religious materials, meals, and professional…

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Can a church rent space to a for profit business?

Renting to a profit-oriented business by a church is categorized as an unrelated business activity, which is not directly aligned with the purpose of the organization’s exempt status. Such activities must be reported on Federal Form 990-T and will be subject to tax. However, certain expenses can be allocated to reduce the income, including utilities,…

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Church Meal Expense Reimbursement Guidelines

All meal expenses for church pastors and staff should not automatically be reimbursed. The reimbursement of meal expenses must comply with specific IRS guidelines to ensure they are deductible and not considered taxable income. Here are the key considerations: Business Connection: The meal expenses must have a direct business connection. This means the expenses must…

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Church Board Duties

Church Board Duties The start of the year is a good time for church boards to ensure that they have remained compliant with all of their duties to the organization. Of course, church entities are not all structured the same. Some are set up with broad congregational membership authority. Others are largely board governed. There…

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Employee Handbooks for Churches

Employee Handbooks for Churches  Churches sometimes lean toward avoiding too much formality around hiring practices and employment procedures. There can be a bias against seeming too “corporate” or running the church “like a business.” Heightened formality may seem natural when a church is hiring a previously unknown candidate for a pastoral position. But in other…

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Automatic Exemption for Churches

Automatic Exemption for Churches Churches that meet the requirements of IRC Section 501(c)(3) are automatically considered tax-exempt and are not required to apply for and obtain recognition of tax-exempt status from the IRS. Although there is no requirement to do so, many churches seek recognition of tax-exempt status from the IRS because this recognition assures…

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Can a Church Give an Employee Loan?

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…

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Can all church employees qualify for housing allowance?

Q. Can all church employees qualify for housing allowance? A. No. Section 107 of the Internal Revenue Code allows only a “minister of the gospel” to have a housing allowance. Thus, only taxpayers who are serving as clergy under IRS rules for tax purposes are eligible for a housing allowance. These rules state that the…

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