All posts from “tax”

Monday Church Management Roundup: 4/14/14

April 14, 2014 8:00 AM

Tax season is year round. April 15 may be Tax Day, but as this new infographic demonstrates, tax season really is year round. Numerous one-time and ongoing filing and reporting requirements exist for churches and clergy that can't be missed...

Q&A: Rules Covering Opting Out on Social Security

April 8, 2014 8:00 AM

Q: I have been a pastor for 15 years. In the beginning of my pastorate, I received some confusing information from the IRS about opting out of social security, so I never did. I recently became ordained in the denomination...

Monday Church Management Roundup: 3/31/14

March 31, 2014 8:00 AM

Internal Revenue Service. Kiplinger's Personal Finance Adviser reports: "Don't expect much in the way of service from the IRS this filing season. Budget cuts have forced the agency to pare back on services that filers have relied upon in...

Monday Church Management Roundup: 3/24/14

March 24, 2014 8:00 AM

The tax treatment of church-paid medical benefits. In response to countless questions sent in recent weeks, Richard Hammar has written a new article about IRS Notice 2013-54, which addresses the tax treatment of church-paid medical benefits. Here is why...

Affordable Care Act Deadline: March 31

March 18, 2014 8:00 AM

Editor's Note: After March 31, 2014, individuals cannot enroll in a plan through the Marketplace unless they have a qualifying life event (e.g., relocation to another state, marriage, divorce, or birth of a child). Open enrollment for 2015 will...

Should Ministers Prepare Their Own Tax Returns?

March 13, 2014 8:00 AM

Ministers can prepare their own tax returns. While ministers' taxes present several unique rules, these rules are not complex. Unfortunately, many people confuse uniqueness with complexity. With a little effort most ministers should be able to comprehend these rules sufficiently...

Why Pastors Must Pay Federal Income Taxes

March 6, 2014 8:00 AM

Ministers are not exempt from paying federal income taxes. Since 1943 (Murdock v. Pennsylvania, 319 U.S. 105), the United States Supreme Court has ruled that the First Amendment guaranty of religious freedom is not violated by subjecting ministers to...

Tips on Selecting a Tax Preparer

February 18, 2014 8:00 AM

Let's assume you've decided to have your tax return prepared by a professional. The next step is to find someone who is experienced and competent in the preparation of ministers' tax returns. Here are some tips to help you...

How to Prepare W-2s for Church Employees, Including Ministers

January 28, 2014 8:00 AM

Churches need to report each employee's taxable income and withheld income taxes as well as Social Security and Medicare taxes on Form W-2, and furnish copies B, C, and two of the 2013 Form W-2 to each employee by...

10 Common Payroll Tax Errors

January 23, 2014 8:00 AM

In the video below, Richard Hammar reviews what he considers the ten most common payroll tax errors made by churches. Hammar, along with Christianity Today, publishes a comprehensive tax review in his annual book the Church & Clergy Tax Guide,...

Are Churches Legally Required to Issue Statements for Every Contribution?

January 16, 2014 8:00 AM

We recently fielded this question from a church administrator in Virginia: Is there a minimum gift amount for which a contribution statement must be issued? For instance, if someone visited the church one Sunday and dropped a $10 check...

Monday Church Management Roundup: 1/13/14

January 13, 2014 8:00 AM

Expect some improvement in the general economy. Will it translate to higher levels of giving in local churches? Maybe. Unemployment is one of the biggest challenges to giving in congregations, so a growing economy presumably—presumably—leads to job creation. According...

IRS Announces 2014 Mileage Rates

December 16, 2013 9:00 AM

The IRS recently announced the new standard mileage rates for 2014. The reimbursement rate for business mileage is .5 cents less than the 2013 rate. Effective January 1, 2014, the standard mileage rates for the use of a car,...

Q&A: Hosting a Music Group at Church

December 12, 2013 8:00 AM

Q: I'm a pastor of a local church and have some questions about groups and individuals that come to the church to do musical performances. I'd like to know what our requirements are as a church regarding the legal...

One Key, End-of-Year Task Every Church Should Do

October 24, 2013 8:00 AM

A number of tasks need to be done before the end of the year, but there's one that can easily be done with the handy tool of the church bulletin or newsletter: Include information that will help donors ensure...

Gifts of Money to Pastors

October 17, 2013 8:00 AM

Editor's Note: The month of October is Pastor Appreciation Month. As you consider how to celebrate the many benefits your pastor brings to your church, consider if the gifts you're giving count as taxable income. Some church members give...

Neglecting to "Render Unto Caesar"

October 15, 2013 8:00 AM

Ministers—especially new ones—often fail to file income tax returns. It's a common problem, because churches are not required to withhold either income taxes or Social Security taxes from the wages of ministers who are performing ministerial services. This occurrence...

Churches: The IRS is Substantially Closed, But Your Obligations Remain

October 2, 2013 8:00 AM

Editor's Note (10/17/2013): Congress passed a bill last night that ended the shutdown. President Obama signed the bill ahead of the default deadline that loomed at 11:59 p.m. Due to the lapse in federal government appropriations (the so-called "government...

Q&A: Outside Groups and the Church Building

August 15, 2013 8:00 AM

Q: We have several groups that call and ask to use the church building for meetings. If we set a price for rental, is that taxable income? If we suggest a donation or just ask for a tithe off...

"Play or Pay" Health Care Penalty Delayed

July 8, 2013 11:33 AM

The Obama Administration announced on July 2 a one-year delay in the effective date of a major component of the Patient Protection and Affordable Care Act requiring employers with at least 50 workers to offer health coverage or be exposed...

Senate's Tax Reform Could Greatly Impact Charities

July 1, 2013 8:00 AM

Senate Finance Committee Chairman Max Baucus and Ranking Member Orrin Hatch publicly announced Friday their much-anticipated plan for next steps on comprehensive tax reform. The announcement and a related letter to Senate colleagues made clear the Finance Committee's strategy...

Should Churches Reject Tax Exemption, As Huckabee Suggests?

June 12, 2013 3:32 PM

Mike Huckabee raised an intriguing, provocative question on Monday while addressing pastors ahead of the Southern Baptist Convention annual meeting in Houston: Should churches reject their tax-exempt status as a way to break free of government oversight and restriction?...

Q&A: Should the Church's Payroll Include Youth Providing Childcare?

May 30, 2013 8:00 AM

Q: When we have youth from our high school youth group do childcare for church events, do they need to be put on the payroll? In the past we have just paid them from the ministry fund they are...

Q&A: Are Proceeds From the Church Community Center Taxable?

May 7, 2013 8:00 AM

Q: Our church's new community center includes a gym, and a coffee shop for people to fellowship and drink coffee while watching their younger children on our playground just outside the building. We also host a church basketball league...

State Appeals Court: Church Should Pay Property Tax

April 17, 2013 8:00 AM

On the heels of last week's news regarding an Indiana study that showed one in four government leaders favored payments of some type by churches in exchange for their tax-exempt statuses comes this online column by Peter J. Reilly of...

Indiana Government Survey: 1 in 4 Say Churches Should Make Payments

April 9, 2013 9:51 AM

A 2010 survey of local government leaders in Indiana shows one in four want churches to make “payments” or provide services in exchange for receiving tax exemptions on their properties. The survey results, released for the first time on Monday,...

When You Need Outside Help for Taxes

February 25, 2013 8:00 AM

A brief Q&A recently featured in The Wall Street Journal offers tips for what to look for in a tax preparer. Many people hire someone to help them file their returns these days, the author notes, mostly because of the...

12 Benefits of the New Taxpayer Relief Act

January 17, 2013 8:00 AM

Congress enacted legislation, known as the American Taxpayer Relief Act, in the final hours of 2012 that increased taxes for the wealthiest Americans, and extended several expired tax benefits so they will be available in preparing your 2012 tax return....

Will Churches Pay More in 2013?

January 10, 2013 8:00 AM

A few months ago, our friend Warren Bird at Leadership Network informally surveyed nearly 600 Protestant churches to find out their plans for hiring and pay raises in 2013. The survey results appeared encouraging: 74 percent expected to give raises...

"Fiscal Cliff" Law Temporarily Extends Certain Donations for 2012

January 8, 2013 10:53 AM

The so-called “fiscal cliff” law just passed by Congress and signed by President Obama, formally known as the “American Taxpayer Relief Act” (the Act), includes a little-publicized provision providing a very short window of opportunity for eligible taxpayers to make...

The Top 10 Church Management Articles of 2012

December 27, 2012 8:00 AM

The church office is a busy place, as shown in this year’s ten most popular articles on ManagingYourChurch.com. These ten alone demonstrate that many church leaders are working hard to count contributions, show employees their appreciation, conduct board meetings,...

Commission Releases First Report on Church Accountability

December 4, 2012 2:54 PM

An independent commission formed by the Evangelical Council for Financial Accountability at the request of Sen. Charles Grassley, R-Iowa, in January 2011 issued its first public findings today through a 91-page report that is available for free download. The report...

Q&A: Is a Love Offering Tax Deductible for the Donor?

December 4, 2012 8:00 AM

Q: I realize love offerings need to be included in a pastor’s taxable income, however, should an individual receive tax-deductible credit for their gift if the church board authorized the collection? Also, what if an individual gives a love gift...

IRS Announces 2013 Mileage Rates

November 26, 2012 11:01 AM

Last week, the IRS announced the new standard mileage rates for 2013. The reimbursement rate for business mileage increased 1 cent over 2012. Effective Jan. 1, 2013, the standard mileage rates for the use of a car, van, pickup,...

A Minister’s Most Important Tax Break

November 20, 2012 8:00 AM

This article is adapted from Richard Hammar’s Essential Guide to Money for Church Boards eBook. For this eBook and other cutting-edge eBooks for church administrators, board members, and clergy, view our online catalog. The most important tax benefit available...

Q&A: Are "Love Offerings" for Church Staff Taxable?

November 8, 2012 8:00 AM

Q: I recently read an article about when churches give Christmas gifts and have a question. If a church takes up a love offering at Christmas for its pastor and staff, is that reportable as income? This would not come...

A Key Tax Reminder for Donors

November 1, 2012 8:00 AM

As the calendar flips to November, it's a good reminder of the many tax details that churches must track, especially on behalf of those who faithfully give to the church throughout the year. Churches must properly document donor contributions, which...

The No-Stress Audit

October 30, 2012 8:00 AM

Most church staffs dread an audit. Disturbing questions surround the experience: Does the IRS distrust us? Will we have to pay more out of our already slim budget? Thankfully, much of this worry is unwarranted. Most church tax returns are...

The 10 Commandments of Church Management

October 25, 2012 11:19 AM

Editor’s Note: Frank and Elaine Sommerville, editorial advisors for ManagingYourChurch.com, presented some of this material on Monday at The Ultimate Financial and Legal Conference in Arlington, Texas. I. Thou shalt not allow the church’s intellectual property to be used for...

Can’t Pay Your Taxes?

October 16, 2012 8:00 AM

Many pastors have been audited by the IRS and assessed several thousands of dollars of taxes and penalties but have no prospect for paying their bill. What can be done if you find yourself in this situation? There are...

Your Turn: Will Your Church Get Political?

October 11, 2012 8:00 AM

With Election Day less than a month away, discussion about the role of churches in the political realm remains robust across the country. Last week's "Pulpit Freedom Sunday," conducted by the Alliance Defending Freedom, drew nearly 1,500 participating churches, the...

Supreme Court Won't Hear Housing Allowance Case

October 2, 2012 12:00 PM

The U.S. Supreme Court denied a petition on Monday to take up an appeal by a minister who claimed an income tax exclusion for two homes. In late 2010, the U.S. Tax Court ruled that federal tax law does...

Free Church Payroll Webinar Rescheduled

September 11, 2012 3:24 PM

Due to illness, Richard Hammar’s “Prevent Payroll Mistakes—What Churches Need to Know” webinar, which was originally scheduled for tomorrow (Wednesday, September 12, 2012), has been rescheduled. In an effort to best serve you, we have rescheduled this free webinar to...

Can We Amend the Pastor's Housing Allowance?

August 30, 2012 8:00 AM

Q: Our church designates, in writing, a housing allowance for our pastor on an annual basis (usually late November for the upcoming fiscal year—for example in November 2011 we submitted our proposed budget for 2012). We now have a member...

The Politics of Religion

August 27, 2012 8:00 AM

We've recently looked at the political activity of churches. In the upcoming September/October 2012 edition of Church Law & Tax Report, Rich Hammar revisits what the Internal Revenue Service says is--and isn't--allowed by churches when it comes to political candidates...

Properly Documenting Donors' Contributions

August 16, 2012 8:00 AM

In the August 2012 edition of Church Finance Today, Richard Hammar examines a recent, high-profile case involving a couple whose substantial contributions to a church were denied tax deductibility by the Internal Revenue Service: A married couple (the “taxpayers”) timely...

Q&A: Should Churches Perform a Compensation Study?

July 26, 2012 8:00 AM

Q: At the end of every year, our board discusses the salary for our ministers for the upcoming year. We would like to compensate our ministers for all they do for our church, and some have suggested we get a...

Q&A: Is Benevolence for a Church Employee Taxable?

July 19, 2012 8:00 AM

Q: Can a church give a cash benevolence gift to an employee? And is it taxable income? A: Yes and yes. For better or worse, churches seem to attract needy employees. They may need their car repaired or have...

Should Churches Be Involved in Politics?

July 2, 2012 8:00 AM

On Father’s Day, numerous churches in Maine used their offering time to take up collections for a political action committee (PAC) campaigning against a same-sex marriage referendum on that state’s ballot. An article on ChristianityToday.com points out such an...

Health Care Ruling Preserves Credit for Churches

June 28, 2012 10:34 AM

This morning's Supreme Court decision to largely uphold President Obama's health care reform legislation appears to preserve a health insurance credit for small employers, including churches, to help cover the costs of providing coverage to employees. This means churches that...

Compensation Planning for Churches, Part 6

June 21, 2012 8:00 AM

Editor’s Note: Today is part six of a multiple-part series reviewing church compensation planning that complies with IRS guidelines. Last week we looked at how to properly classify employees who are ministers. Determining the parts of compensation that are taxable...

Compensation Planning for Churches, Part 5

June 14, 2012 8:00 AM

Editor’s Note: Today is part five of a multiple-part series reviewing church compensation planning that complies with IRS guidelines. Last week we looked at how noncash benefits must count as compensation. Classifying the employees who are ministers is a crucial...

Compensation Planning for Churches, Part 4

June 7, 2012 8:00 AM

Editor’s Note: Today is part four of a multiple-part series reviewing church compensation planning that complies with IRS guidelines. Last week we looked at how to avoid costly penalties when setting pay. Before an organization can move on to...

Compensation Planning for Churches, Part 3

May 31, 2012 8:00 AM

Editor’s Note: Today is part three of a multiple-part series reviewing church compensation planning that complies with IRS guidelines. Part one looked at why churches should carefully think through what qualifies as compensation and taxes on compensation. Part two...

Compensation Planning for Churches, Part 2

May 23, 2012 8:00 AM

Editor’s Note: Today is part two of a multiple-part series reviewing church compensation planning that complies with IRS guidelines. Part one looked at why churches should carefully think through what qualifies as compensation and taxes on compensation. One of...

Compensation Planning for Churches, Part 1

May 17, 2012 8:00 AM

Editor’s Note: This post first appeared on Elaine Sommerville’s blog Elaine’s Tax Tips for Nonprofits. Today is part one of a multiple-part series reviewing church compensation planning that complies with IRS guidelines. One of the most common areas that...

ManagingYourChurch.com Honored by Press Association

May 15, 2012 2:41 PM

Today's post is a little different than the norm because we have some good news to share. ManagingYourChurch.com received a top honor Friday from the Evangelical Press Association during the organization's 2012 conference. The site received the Award of Excellence--the...

A Breakdown of Salaries and Benefits for Senior Pastors

April 3, 2012 8:00 AM

Editor's Note: The 2014-2015 Compensation Handbook for Church Staff is now available. This resource details pay and benefits data for 14 church positions, including two new ones—part-time musician and part-time childcare provider. Each position is analyzed based on a variety...

Is Income Exceeding Expenses at Your Church?

March 13, 2012 8:00 AM

Findings from the 2012-2013 Compensation Handbook for Church Staff reveal that the overall percentage of churches operating in the black—income EXCEEDS expenses—declined in almost every region....

Proper Payroll Withholdings Critical for Churches

March 1, 2012 8:00 AM

The recent payroll tax holiday extension keeps a 2-percent reduction for employee and clergy Social Security withholdings in place throughout 2012. We've already covered what those rates should be on paychecks. But the reason why it is so important for...

IRS Releases Latest "Dirty Dozen" Tax Scams

February 28, 2012 8:00 AM

Each year, the Internal Revenue Service releases the top twelve tax scams that individuals, nonprofits, churches, and businesses should watch for and avoid. The newest list, issued by the IRS this month, reveals the latest "dirty dozen": Identity Theft...

Congress Extends Payroll Tax Holiday Through 2012

February 21, 2012 1:01 PM

Congress on Friday voted to extend the payroll tax holiday through December 31, 2012, adding an extra $20 per week on average to paychecks for 160 million workers. President Obama previously pledged to sign any extension into law once...

17 Ways the Church May Become Accountable to the State

February 21, 2012 8:14 AM

Should the IRS form an advisory committee to oversee church tax law? Is the clergy housing exclusion constitutional? To what extent should churches be accountable to the government for the way in which they operate? These are three of the...

Commission on Financial Practices Seeks Input from Churches

February 16, 2012 8:00 AM

A little more than a year ago, Sen. Chuck Grassley (R-Iowa) asked the Evangelical Council for Financial Accountability to oversee an independent commission tasked with evaluating several financial and tax matters related to churches and nonprofit ministries. The goal: Determine...

Extension of Payroll Tax Holiday Appears Likely

February 15, 2012 12:32 AM

Congress appeared close late Tuesday to passing an extension of the payroll tax holiday through December 31, 2012, for millions of workers. A bill may be finalized Wednesday and put before President Obama for signature by the end of the...

Appeals Court: No Housing Allowances for Two Homes

February 9, 2012 9:21 AM

A federal appeals court ruled Wednesday that the ministerial housing exclusion in the Internal Revenue Code is indeed limited to a single home. The ruling overturns a split Tax Court decision (Driscoll v. Commissioner, 135 T.C. No. 27 (2010)) in...

The Top 7 Paid Positions at Churches

February 7, 2012 8:00 AM

Editor's Note: The 2014-2015 Compensation Handbook for Church Staff is now available. This resource details pay and benefits data for 14 church positions, including two new ones—part-time musician and part-time childcare provider. Each position is analyzed based on a variety...

Penalties Double for Late 1099s

January 23, 2012 8:00 AM

Editor's Note (02/21/12): A previous version of this post incorrectly stated the deadline for Form 1099s that are mailed. The correct dates are now shown in the post. Form 1099s that are mailed are due on February 28, 2012, for...

Part 1: When Raises Aren’t Possible for Church Staff

January 12, 2012 8:00 AM

Editor’s Note: Liz Ryan spent 20 years as a corporate human resources leader. During that time, she saw the best and worst of how employers treat their employees. She’s now a full-time writer and consultant on workplaces and writes...

How Much Are Pastors Earning These Days?

January 5, 2012 8:00 AM

How much are the pastors of Protestant churches nationwide earning these days? The chart below shows the national averages for compensation and benefits earned by full-time senior pastors, based on Christianity Today's biannual survey of 4,600 churches nationwide. The survey...

Year End Giving

December 29, 2011 8:00 AM

December often brings more contributions to churches than any other month. Be prepared to handle year end contributions accurately by listening to Richard Hammar describe a number of important rules that apply to year end giving in the video below:...

Payroll Tax Cut Temporarily Extended into 2012

December 27, 2011 4:15 PM

After weeks of debate, Congress has finally resolved the question of whether or not to extend the payroll tax holiday that was enacted in 2011. From now until at least February 29, 2012, nearly 160 million workers will benefit from...

Top 10 Year-End Fiscal Tasks

December 22, 2011 10:00 AM

If your fiscal year-end is December 31, you have to complete all the necessary steps for closing the fiscal year while also preparing W-2s, 1099s, and donor giving statements. With a little planning though, you can avoid long hours...

December Tax Tip: Note New Withholdings for 2012

December 22, 2011 8:00 AM

Beginning on January 1, churches having nonminister employees (or a minister who has elected voluntary withholding) should begin withholding federal income taxes according to the new tables and instructions contained in the 2012 edition of IRS Publication 15 (Circular E)....

December Tax Tip: Plan Now to Reclassify an Employee

December 15, 2011 8:00 AM

If you have a minister or lay worker who is treated as self-employed for federal income tax reporting purposes, but who you would like to reclassify as an employee, the ideal time to make the change is on January 1...

The Top 10 Church Management Articles of 2011

December 13, 2011 8:00 AM

I’ve said it before, and I’ll say it again: I’m a sucker for lists. And the end of a calendar year always brings opportunities to reflect on the top stories and headlines from the year that was. So it’s...

IRS Announces Recommended Mileage Rates for 2012

December 12, 2011 9:34 AM

On Saturday, the Internal Revenue Service announced its recommended optional standard business mileage rates for 2012. These recommendations are ones "employees, self-employed individuals, and other taxpayers can use to compute deductible costs of operating automobiles (including vans, pickups and...

December Tax Tip: 2012 Pension Plan Limits

December 8, 2011 8:00 AM

The IRS has announced cost-of-living adjustments applicable to dollar limitations for pension plans and other items for 2012. These include the following: The limitation for defined contribution plans is $50,000. The exclusion for elective deferrals is $17,000. The limitation used...

December Tax Tip: Update Staff W-4s Now

December 1, 2011 8:00 AM

December is a good time to check with all nonminister church employees to see if they need to file a new W-4 form with the church. The W-4 form is used by employees to report withholding allowances. This information will...

The Church Bulletin as a Tax Tool

November 1, 2011 8:00 AM

To avoid jeopardizing the tax deductibility of charitable contributions, churches should advise donors at the end of 2011 not to file their 2011 income tax returns until they have received a written acknowledgement of their contributions from the church....

Renting Out Extra Space May Cost Churches

October 13, 2011 8:00 AM

A church in Boise, Idaho, received an unexpected property tax bill of $17,000 for leasing space to a local YMCA daycare, according to Northwest Cable News. The church charges the nonprofit about $9,500 a month to rent space often left...

Endorsing Candidates from the Pulpit

October 4, 2011 8:00 AM

This past Sunday, the Alliance Defense Fund expected nearly 500 church pastors nationwide to participate in "Pulpit Freedom Sunday." The event, organized for four consecutive years by ADF, is designed to challenge a 1954 amendment to the 501( c)...

Tax Scammers in Person

September 21, 2011 8:00 AM

The most common way tax scammers seem to work is through e-mail. Countless e-mails arrive daily in inboxes claiming a tax refund is available. Many tax scammers have become less shy recently, according to a recent IRS news release...

Who Owns a Pastor's Sermons?

September 19, 2011 8:00 AM

Most clergy would be shocked to learn that their sermons are works made for hire that are owned by their employing church, and that their sermons cannot be used in any other churches with which they are later employed without...

Church Puts Property Up for Sale After Tax Dispute

September 14, 2011 8:00 AM

An ongoing property tax assessment battle between Concord, N.H., and a 50-member church there has led to the church putting its property up for sale to make ends meet, according to a recent article in the Concord Monitor. Four...

Cartoon: Giving for Tax Purposes

September 1, 2011 8:00 AM

If you’ve ever created receipts for church offerings and donations, you’ve probably been asked to receipt donated property. On a more serious note, Richard Hammar offers a couple of lessons on how to meet IRS requirements for non-cash contributions of...

One Church Receives an Unexpected Tax Bill

August 30, 2011 8:00 AM

A church in Mount Vernon, Washington, thought it didn't owe taxes. But that changed after a recent state audit, when the state said the church owed $180,000 in back taxes and penalties, according to a TV news station. The church...

Scammers 'Phishing' for Your Money

July 28, 2011 8:00 AM

Editor's Note (August 15, 2011): Naomi Martin, a reporter with The New Orleans Times-Picayune wrote this article for the newspaper on Sunday. It provides additional details on how some of these scams approach church leaders. In July, the IRS...

The Proposed Charitable Deduction Change

July 21, 2011 8:00 AM

The president has proposed a 2012 budget that will decrease the value of itemized tax deductions, including deductions for charitable contributions, for individuals making $200,000 or more and families making $250,000 or more per year. Also in the proposed budget...

Letters to Potential Donors of Mission Trips

July 14, 2011 8:00 AM

In the excitement of planning a mission trip, it’s possible to overlook the importance of carefully worded support letters that meet IRS guidance. The IRS indicates what would be helpful to include in letters requesting charitable contributions, according to...

Setting the Record Straight on Group Exemptions

June 30, 2011 8:00 AM

The IRS Advisory Committee on Tax Exempt and Government Entities (“ACT”) issued a report in June that addresses a number of tax compliance issues, including group exemption rulings. The report caught the attention of many church leaders, since thousands...

IRS Increases Mileage Rate

June 23, 2011 11:58 AM

The Internal Revenue Service announced this morning it has increased the optional standard mileage rate that employers can use to reimburse employees who drive personal vehicles for business purposes. The IRS increased the rate to 55.5 cents per mile...

IRS Revokes Tax-exempt Status of Church-run Agency

June 23, 2011 8:00 AM

If your church runs a nonprofit agency, you may want to check this state-by-state list of 275,000 organizations whose tax-exempt status was recently automatically revoked by the IRS. Most organizations on the list no longer exist but some still do....

Group Drops Case Against Pastor Housing Allowances

June 22, 2011 10:21 AM

A constitutional challenge to the tax-free housing allowances and parsonages provided to thousands of American pastors is over after the plaintiffs who filed the original lawsuit voluntarily requested its dismissal Friday in a California district court. But the battle...

More Analysis on the Pastor Housing Allowance Challenge

June 14, 2011 8:00 AM

Last month, Richard Hammar wrote an article detailing new developments in the constitutional challenge to pastoral housing allowances under way in California. In a separate case in Arizona, the Supreme Court ruled the plaintiffs there lacked standing for their...

Bill Maher: Should Churches be Taxed?

June 2, 2011 9:30 AM

A little more than a year ago, Bill Maher hosted actor Ashton Kutcher, author and editor Jon Meacham, and Florida Congresswoman Ileana Ros-Lehtinen on his HBO program, Real Time. A YouTube clip from the program circulated recently throughout social...

What's a Congregation Worth?

April 28, 2011 8:00 AM

As cities and counties continue to eye possible taxes and fees for churches and religious organizations, interesting new research from The University of Pennsylvania's Ram Cnaan examines the economic value of a congregation to its surrounding community. Using information...

Expanded 1099 Reporting Requirements Repealed

April 19, 2011 8:00 AM

In the April edition of Church Finance Today, Richard Hammar previewed the possible repeal of the expanded 1099 reporting requirement included with the Patient Protection and Affordable Act (last year's health care reform legislation). The requirement would have required all...

A Tax Credit for Churches?

April 18, 2011 8:56 AM

Editor's Note (September 29, 2011): A church business administrator in Colorado shared the following update regarding his church's application for this credit: "We submitted form 990-T claiming the credit (approximately $7,100) in late April. We received a request for more...

Should Congress Change Pastors' Housing Allowances?

April 12, 2011 8:00 AM

The newest issue of Christianity Today poses an interesting question: Should Congress change pastors' housing allowances? Expect to hear a lot more on the topic in the weeks and months ahead. Since the conclusion of Sen. Charles Grassley's (R-Iowa)...

Would a Change to Charitable Contributions Rules Hurt Churches?

April 5, 2011 8:00 AM

One angle covered by secular media during the recent release of the 2011 State of the Plate survey results: The possible affects of a current "federal proposal to reduce tax deductions for charitable donations among wealthy Americans," as CNN.com reported...

Handling Leases for Car Allowances

March 28, 2011 8:00 AM

Question: Our church provides an auto allowance budget line item for vehicle expenses for our pastor. The pastor leases a vehicle that he uses for church-related business. He has asked to use the budget line for reimbursement of the...

Why the National Church Compensation Survey Matters

March 10, 2011 8:00 AM

John Clemens with IRN USA Radio recently interviewed Matt Branaugh about Christianity Today International's National Church Compensation Survey. In this six-minute clip (which aired on more than 1,100 stations nationally), you'll hear more details about the importance of this survey,...

The Fall-Out from 'Natural Decrease'

March 3, 2011 8:00 AM

Editor's Update (4/26/2011):The Nonprofit Quarterly pointed this morning to a Boston Globe article reporting 40 of the city's largest nonprofits, with property valued at $15 million or more each, have received letters from the city "requesting them to make...

Pay Raises for Pastors and Church Staff in 2011?

February 24, 2011 8:00 AM

A recent Wall Street Journal headline immediately caught my eye: “Higher Pay Gains Seen for 2011.” The article goes on to explain the very real chance American workers will receive bigger pay raises this year: With corporate America sitting...

Holiday Pushes Back Due Date for Taxes

February 23, 2011 10:15 AM

Haven't started your federal taxes yet? As February fast draws to a close, you may be encouraged to know that you get an extra three days to work on 2010 filings. From this morning's Richard Hammar's Essential Reminders: "Taxpayers...

Online Resource for Church Law and Tax Help

February 22, 2011 8:00 AM

We’re pleased to announce the launch of ChurchLawAndTax.com (formerly ChurchLawToday.com). We’ve given the site a fresh, new look to serve church leaders like you even better. You’ll find an updated Archives of the Church Law & Tax Report newsletter through...

Help for Pastors During Tax Season

February 17, 2011 8:00 AM

The "The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010," passed by Congress and signed by President Obama in mid-December, triggered a domino-like effect of changes for tax-filers--so much so that even the Internal Revenue Service...

Ten Steps to Tax Reporting

February 10, 2011 11:00 AM

Looking for a helpful—and easy—way to remember federal payroll tax reporting requirements as a church? Check out this handy, printer-friendly PDF we've prepared titled "Ten Steps to Tax Reporting." Here's a sneak peek: 10) Complete Forms 1099-MISC and 1096....

What Churches Should Know about the Tax Relief Act

January 18, 2011 8:00 AM

On December 17, Congress passed the "The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010." After President Obama signed it into law, numerous tax provisions that were about to expire were kept alive. And a significant benefit...

National Commission to Examine Church Financial Practices

January 7, 2011 10:46 AM

Editor's Update (12/8/11): The Commission on Accountability and Policy for Religious Organizations is now taking public comments on the various issues it is studying. _________________________________ Editor's Update (4/27/2011): The ECFA has announced the initial members of its commission. The...

Upcoming Webinar: Key Tax Changes to Understand

January 4, 2011 8:30 AM

Members of Congress passed a sizable tax-cut package late on December 17, and it barely hit President Obama’s desk the next day before he signed it into law. According to one media report, the package extends, adds, or modifies...

TheYourChurchBlog.com's Top 5 Posts of 2010

December 30, 2010 8:30 AM

Last week, we took a moment to highlight the Top 10 most-read articles from Your Church magazine's website, YourChurch.net. As we continue to count down the days to 2011, we now offer the Top 5 most-read posts from TheYourChurchBlog.com...

Deadline Nears for Pastors' Housing Designations

December 15, 2010 9:40 AM

Churches must designate a portion of each minister's compensation as a housing allowance by December 31 in order for ministers who own or rent their homes to receive the full benefit of a housing allowance exclusion for calendar year 2011....

Is Your Church Ready for Tax Season?

December 9, 2010 8:00 AM

In an upcoming issue of the Church Finance Today newsletter, senior editor Richard Hammar relays a comment made by Douglas Shulman, U.S. Commissioner for Internal Revenue, during a speech given earlier this fall to the American Institute of CPAs:...

What You Should Know about Year-end Giving and Receipts

December 2, 2010 8:00 AM

Michael Batts and Dan Busby, two members of our Editorial Advisory Board, will co-present a 60-minute webinar on Tuesday, December 7, about the ins and outs of year-end giving and receipts. Batts is managing partner with the CPA firm Batts...

Endorsing Political Candidates from the Pulpit

October 26, 2010 8:00 AM

A majority of pastors believe churches should not publicly endorse political candidates, a new LifeWay Research survey shows. Phone interviews conducted randomly in early October with 1,000 church pastors, ministers, and priests revealed 70 percent strongly disagreed and 14...

30% Discount on Church Law, Tax, and Finance Resources

October 18, 2010 8:00 AM

Our friends at the National Association for Church Business Administration have designated Thursday, October 21, as "National Church Administration Day." As NACBA explains it on its website: "The idea behind National Church Administration Day is for seasoned church leaders...

Medical Allowances and Health Savings Accounts

October 12, 2010 8:00 AM

Question: We are entertaining the idea of changing our health care coverage to a HSA (Health Saving Account)-compatible policy. Presently our three pastors receive a designated amount of medical allowances each year to help them cover the costs of...

Legislation Drops Cell Phones from "Listed Property"

October 5, 2010 8:00 AM

The small business tax relief legislation just passed by Congress and signed by the president includes a long-awaited provision removing cell phones from "listed property" under federal tax law effective for tax years beginning after December 31, 2009. As...

Case Threatens Pastor Housing Allowances

September 28, 2010 8:00 AM

Earlier this month, we covered eight federal issues that local churches should watch closely during the remainder of 2010 and into 2011, according to recent remarks from Dan Busby, president of the Evangelical Council for Financial Accountability. Busby, one...

What Churches Should Know about IRS Form 990-N

May 13, 2010 7:00 PM

(Editor's Note: Since posting this on May 14, the IRS has issued a statement urging small nonprofits to still file, even though the May 17 deadline has passed). We recently fielded a question from a reader regarding the Internal Revenue...

Loss of a Church's Financial Records

April 6, 2010 9:00 AM

Follow Richard on YouTube.com: http://www.youtube.com/richardrhammar Learn more about Protecting Electronic Data at ChurchSafety.com. Manage your church's finances year-round with The Essential Guide to Church Finance....

10 Tips for Last-minute Tax Filers

March 2, 2010 8:00 AM

Here are the Internal Revenue Service's top 10 tips that will help your tax filing process “run smoother than ever this year.” 1. Start gathering your records. Round up any documents or forms you'll need when filing your taxes:...

New Law Permits 2009 Charitable Deduction for Haiti Relief Contributions

February 24, 2010 8:00 AM

In an effort to encourage further charitable giving to help those affected by the earthquake in Haiti, Congress passed a bill on January 21 that permits donors to deduct (on their 2009 income tax returns) charitable contributions of cash...

2010 Tax Tips for Church Leaders

February 23, 2010 8:30 AM

Ministry Direct, a channel of AGTV, recently hosted a live, 50-minute video with Richard Hammar on the latest tax information that churches and ministers should know. See it below. Video provided by AGTV. Used with permission. To learn more about...

IRS Announces Standard Business Mileage Rate for 2010

December 3, 2009 4:36 PM

The Internal Revenue Service today issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical, or moving purposes. Beginning on Jan. 1, 2010, the standard mileage rates for...

You Want to Donate What?

October 29, 2009 8:02 AM

Join us on Tuesday, November 10, 2009, for a live webinar event with nonprofit CPA, Elaine Sommerville titled, "You Want to Donate What? How to Handle All Types of Charitable Contributions" (Click on "You Want to Donate What? on...