IRS Tag

Should I Include my Housing Allowance for the Marketplace?

The Affordable Care Act (also called ACA, federal health care reform or sometimes “Obamacare”) expands health coverage to millions of previously uninsured Americans and makes significant changes to health insurance practices nationwide. The Health Insurance Marketplace is an online resource for comparing different plans and benefits...

06 June, 2019

Churches Can Pay Social Security Allowance to Clergy Staff

The IRS has ruled that clergy are self-employed for purposes of paying social security taxes. This means that they must pay both the employee and the employer share of social security tax under the Self-Employed Contribution Act (SECA). Churches are prohibited from paying FICA tax for...

30 May, 2019

Church Employees Vs Independent Contractors

Incorrectly classifying someone as an independent contractor instead of an employee can be very costly for the church based on IRS penalties. When in doubt, your best bet is to classify someone as an employee. If you really want to classify an individual as an independent...

23 May, 2019

Opting Out of Social Security for Clergy Staff

A minister who wishes to be exempt from social security/Medicare tax must file a Form 4361 with the IRS for approval. Before your application can be approved, the IRS must verify that you are aware of the grounds for exemption and that you want the...

16 May, 2019

Claiming the Housing Allowance During Interim Ministry

Churches normally hire an interim minister for the time between the departure of a pastor and the calling of a new pastor or a “sabbatical interim pastor” when a pastor is granted sabbatical leave. Full-time, interim ministers are usually paid on the same scale as...

09 May, 2019

Flat Dollar Reimbursements Considered Taxable by the IRS

Employees often use their personal cell phones for church business. The church requires that they submit monthly expense reports and they’re reimbursed through an accountable plan. The church board wants to ditch the paperwork and just pay flat-dollar allowances to employees every month. Would that be...

02 May, 2019

Do You Need an Official Designation to Receive a Housing Allowance?

The allowance must be officially designated in advance by the church. The designation should be stated in writing, preferably by resolution of the governing body and/or in an employment contract. In addition, the designation should be recorded in the church budget and payroll records. If the only reference...

25 April, 2019

Estimated Taxes Form and Publication Can Help Clergy Staff and Others Pay the Right Amount in 2019

WASHINGTON –The Internal Revenue Service recently reminded self-employed individuals, retirees, investors and others who pay their taxes quarterly that the first estimated tax payment for tax year 2019 is due Monday, April 15, 2019, for most taxpayers. A 2018 tax return and 2019 Form 1040-ES,...

11 April, 2019

Tax reform brings changes to fringe benefits that can affect an employer’s bottom line

The IRS reminds employers that several programs have been affected as a result of the Tax Cuts and Jobs Act passed last year. This includes changes to fringe benefits, which can affect an employer's bottom line and its employees' deductions. Here’s information about some of these...

06 March, 2019

IRS to highlight tax reform changes affecting small businesses; Small business owners, self-employed should plan now for new changes

WASHINGTON – With just a few months left in tax year 2018, the Internal Revenue Service today urges small business owners to learn about how the new tax law changes may affect them. The Tax Cuts and Jobs Act, passed in December 2017, made tax law...

15 October, 2018