IRS Processing Delays
The Internal Revenue Service closed the most recent filing season with more than 35 million in unprocessed tax returns, as the agency’s backlog grew markedly amid a crush of challenges related to the pandemic and economic relief efforts. The National Taxpayer Advocate indicated about 17 million paper tax returns are still waiting to be processed and approximately…
Can you prohibit personal phone?
Q: Employees are spending a lot of time on their phones (scrolling social media, browsing the internet, listening to music or podcasts). Can we prohibit personal phone use during work hours? A: Yes, you can limit or prohibit the use of personal devices during work hours. Employees can be expected to give their undivided attention…
Paid Preparer or DIY Software?
Tax Software For Ministers A frequent mantra that I often repeat is “Minister’s taxes are not hard, they are just different.” Of course, easy is a relative term. For us, many tax returns are not difficult because we have prepared thousands of minister returns. Most people, including many preparers, do not know the differences…
Charitable Contribution Bundling
Charitable Contribution Bundling Recent changes in the federal tax code have raised the amount of the standard deduction compared to past years. At the time of this writing, the federal standard deduction is $12,400 per year for single taxpayers, and $24,800 per year for married couples. One of the implications of claiming the standard deduction…
Ministers Versus Non-Ministry Employees
Ministers Versus Non-Ministry Employees Churches should make a careful distinction between their paid workers who are acting as ministers versus those who are non-ministry employees. There are several considerations that can only apply to those who qualify as “ministers.” First, ministers can receive a clergy housing allowance, if properly designated, which shields a portion of…
Sabbaticals and Compensation
Sabbaticals and Compensation Clergy members are among the professionals who are commonly given an opportunity to take a periodic break labelled as a “Sabbatical” after a a number of years of ministry service to their church. With the spiritual and emotional demands that often come with pastoring a church, it is indeed a good practice…
Church Governing Documents
Much like the United States government traces its authority back to the U.S. Constitution and subsequent statutes, each church traces its authority from its primary governing documents: Formation document (Articles or Certificate of Incorporation) and Bylaws. The formation document acts like a church’s constitution, and the bylaws act like the church’s statutes. These governing documents…
5 Questions on Church Payroll
Setting up and managing payroll for a church can be complex. There are several questions a church should ask in order to stay compliant with tax and legal requirements. Question 1: Does the church follow standard employment protocols? Like any employer, a church should obtain and keep standard information and documents (including Form W-4 and…
13 IRS Audit Red Flags
There’s no sure way to avoid an IRS audit of your tax return, but these red flags could increase your chances of drawing unwanted attention from the IRS. The IRS audited only 0.4% of all individual tax returns in 2019. The vast majority of exams were conducted by mail, which means that most taxpayers never…
New W-4 questions on church compliance
Since we don’t want the IRS to put a target on your back or your employees to be under-withheld this year, here are the most frequently asked questions about the new W-4 to help you better understand it and be in compliance. Why did the 2020 W-4 change? The 2020 Form W-4 changed to simplify…