Health Insurance Reimbursement Laws Have Changed…Is Your Church Still In Compliance?
Churches are prohibited from reimbursing employees for the cost of their individual health insurance policies on a nontaxable basis, regardless of whether the coverage is purchased through a Marketplace or directly from a carrier. Any payment for individual health insurance will be taxable income. Group health insurance premiums for employees paid directly by the church…
Year-End Tax Tips to Help You Save – Make Charitable Contributions
If you plan to give to charity, consider donating before the year ends. That way you can claim your contribution as an itemized deduction for 2013. This includes donations you charge to a credit card by Dec. 31, even if you don’t pay the bill until 2014. A gift by check also counts for 2013…
Clergy Housing Allowance Ruled Unconstitutional
BREAKING NEWS: Friday, November 22, 2013, U.S. District Judge Barbara Crabb in Wisconsin ruled that the “clergy housing allowance” portion of the Internal Revenue Code(IRC-107(2)) is unconstitutional. This ruling could have a enormous impact on clergy around the country. According to a 2002 statement by former U.S. Rep. Jim Ramstad (MN-R), the clergy housing allowance exclusion saves…
Give Withholding and Estimated Payments a Check-up to Avoid a Tax Surprise
Some clergy are surprised to learn they’re due a large federal or state income tax refund when they file their taxes. Others are surprised that they owe more taxes than they expected. When this happens, it’s a good idea to check your federal tax withholding or estimated payments. Doing so now can help avoid a…
Tax Tips for Clergy Moving this Summer
Tax Tips for Clergy Moving this Summer If you make a work-related move this summer, you may be able to deduct the costs of the move. This may apply if you move to start a new call or to work at the same job in a new job location. In order to deduct moving expenses,…
Can clergy living in a parsonage receive a parsonage allowance?
Pastors living in parsonages should be provided with a “parsonage allowance.” Even in a parsonage, every pastor has some expense in maintaining his or her home. The amount of the allowance may depend on several factors: whether or not the parsonage is furnished, who provides the upkeep, pays the utilities, etc. When the parsonage allowance…
Tips for Clergy Who Missed the Tax Deadline
Clergy Financial Resources has some advice for clergy who missed the tax filing deadline. File as soon as possible. If you owe federal income tax, you should file and pay as soon as you can to minimize any penalty and interest charges. There is no penalty for filing a late return if you are due…
Health Insurance Payroll Deduction…Taxable or Not?
In order for the payroll reductions for health insurance to be tax-free for employees, the church has to establish a POP (premium only plan) or FSA (flexible spending account) or a cafeteria plan. These benefit plans offer the employee the option to forgo part of his or her compensation on a tax-free basis in order…
Housing Provided for Student Clergy – Taxable or Not?
Like other fringe benefits, free or discounted church-provided lodging is usually subject to income and other taxes. To determine the fair market value of the housing provided to an intern, the church may check local newspaper listings for comparable rental properties or ask a local realtor for an estimate of the property’s rental value. The…
Online Tax Software and Your Clergy Tax Return
Online tax software are great programs for basic secular returns but is often times challenged by the complexity of a clergy return. These software packages do not address some of the tax rules unique to ministers which will greatly affect the accuracy of your return. Therefore, clergy using an online tax software package will require…