Taxes

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

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

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

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

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

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

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