Generally, most income you receive is considered taxable but there are situations when certain types of income are partially taxed or not taxed at all. All sources of income are fully taxable and must be included in your income unless it is specifically excluded by law. To help clergy understand the differences between taxable and…
On December 17, 2010, President Obama signed into law H.R. 4853, the Tax Relief Unemployment Insurance Reauthorization and Job Creation Act Of 2010, which will affect every U.S. employer and several areas of payroll, tax and benefits administration in January. Back in 2008, after the passage of the 2008 stimulus package, many taxpayers received $300…
2011 Standard Mileage Rates The Internal Revenue Service issued the 2011 standard mileage rates used to calculate the deductible costs of operating an automobile for ministry, business, charitable, medical or moving purposes. Beginning on Jan. 1, 2011, the standard mileage rates for the use of a car (also vans, or pickups ) are listed below….
The end of the year is the perfect time to switch payroll companies. Clergy Financial Resources offers an easy online payroll management service that specifically meets the requirements of religious organizations. We have an unparalleled tax expertise on the complex issues associated with church payroll and clergy compensation. Sixty percent of churches do not follow…
Reader Question: We (the church) pays for a cell phone and vehicle for our pastor. The church pays the insurance and owns the car but he is the only one that drives it. Do either of these “benefits” need to be taxable? P.A. Yes, both of these benefits are taxable. However, they are only partially…
Churches and religious organizations may engage in income-producing activities unrelated to their tax-exempt purposes, as long as the unrelated activities are not a substantial part of the organization’s activities . However, the net income from these unrelated business activities will be subject to the “Unrelated Business Income Tax” if the following three conditions are met:…
The proposed salary package will normally represent the previous pastor’s salary package or the guidelines set by your organization. 1- Does the church provide a social security allowance? 15.3% or 7.65% of salary and housing. 2- Does the church provide for the supplemental medical insurance? 3-Does the church provide a 100% professional accountable reimbursement plan?…
Ministers can arrange to have income taxes (but not social security taxes) withheld from their compensation by means of voluntary withholding agreements with their employers. If the employer agrees to such an arrangement, the minister must furnish the church with a Form W-4, and the church will then withhold on the basis of the standard…
In today’s economy, setting up a church budget can be a challenging task. The 2010-2011 Compensation Handbook will help make sure your church staff will be fairly compensated.
Accountable Reimbursement Plans Your church should establish an accountable reimbursement policy. Clergy are allowed to exclude all reimbursed expenses from their reportable income. The church reimbursement policy should include the following, but not limited to: office supplies, religious material, subscriptions and paperbacks, meals, entertainment, seminars, dues and memberships, library, educational expenses, camps, legal and professional…
