taxes Tag

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

How Valuable is the Housing Allowance for Ministers?

For qualifying ministers, the housing allowance is an invaluable tax benefit—in fact, according to attorney and Church Law & Tax senior editor Richard Hammar, it’s “the most important tax benefit available to ministers.” In October 2017, however, a federal judge in Wisconsin ruled the ministerial housing...

30 August, 2018

One Easy Way to Increase Your Pastor’s Pay

The most important tax benefit available to ministers who own or rent their home is the housing allowance exclusion. To the extent the allowance represents compensation for ministerial services, is used to pay housing expenses, and doesn't exceed the fair rental value of the home, including...

23 August, 2018

Six Common Penalties Churches Face for Failure to Comply with Payroll Reporting Requirements

Churches that fail to comply with the federal payroll tax reporting requirements face a range of potential penalties. The six most common penalties are summarized below. Churches that are required to withhold taxes from the wages of an employee are responsible for the payment of...

16 August, 2018

Understanding Tax Differences Between Secular and Clergy Employees

Churches are required to classify each person that is hired as either a secular or clergy employee. This is a very crucial step in the hiring process. Clergy Staff are taxed differently than secular employees and this treatment is mandated by law. It isn’t optional,...

02 August, 2018

Monitoring Your Outsourced Payroll Tax Duties

Many employers hire third-party payroll service providers to perform their payroll processing functions and tax-related duties, including making employment tax deposits. Watch Monitoring your outsourced payroll duties on EFTPS to learn about: Using an EFTPS Inquiry PIN to monitor tax deposits The benefits of creating a...

31 July, 2018

Understanding the Housing Allowance for Ministerial Staff

In the complicated world of ministerial pay, it is important to know that pastors and other ordained employees can receive a certain amount of money in compensation for basic living expenses. This is called a housing allowance, also known as a parsonage allowance or a...

24 August, 2017

Understanding the Difference between an Employee and an Independent Contractor

Many businesses nowadays get in trouble for not properly identifying and differentiating employees from independent contractors. Defining what it means to be an employee or independent contractor can be tricky. According to the IRS, an organization must withhold income taxes, withhold and pay Social Security and...

04 April, 2017