Healthcare Penalty going away in 2019

Prior to 2019, if you failed to maintain adequate health insurance coverage, you could be assessed a penalty on your tax return. This penalty was based on your income and could be quite expensive if you went two or months without health care coverage. According to healthcare.gov, starting in 2019 the “Individual Shared Responsibility Penalty”…

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Saving Money with an HSA

If you’re looking to save some tax dollars and pay for your medical expenses at the same time, a Health Savings Account is one of the best options currently available. One of the reasons that a Health Savings Account is useful is because of how difficult it can be to get a deduction for medical…

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Church Health Reimbursement Arrangement (QSEHRA)

A qualified small employer (one that employs fewer than 50 full-time (including full-time equivalent) employees, and does not offer a group health plan to any of its employees) may offer a QSEHRA to its employees for the payment or reimbursement of eligible medical expenses (including individual insurance policy premiums) on a pre-tax basis. The QSEHRA…

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HSA Contributions Can Be Deductible, Even if You Don’t Itemize

If you contribute to an HSA, you may be able to deduct those payments from your total taxable income in 2018. Unlike regular medical expenses (which you don’t get to claim if you take the standard deduction), HSA contributions are taken as an adjustment to your income. Even if you take the standard deduction, HSA…

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Guide to Minister’s Compensation

You may find it helpful to begin by considering the goals of a compensation package. A church should provide its staff with adequate income so that they can fulfill their roles without undue concern about current and future financial needs. Freedom from financial anxiety lets the minister focus on his or her service. It also helps your church…

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Important Fringe Benefits for Ministers

A fringe benefit is any cash, property, or service that clergy employees receive from a congregation in addition to salary.  All fringe benefits are taxable income to employees unless specifically exempted by the Internal Revenue Code. Many fringe benefits can be provided by a congregation to clergy without any dollar limitation (health insurance is an example), while other fringe benefits…

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Can a church offer a Health FSA without a medical plan?

If the church has a group health plan, you may want to consider a Health Flexible Spending Account (FSA).   A health flexible spending account (FSA) is a type of tax-advantaged medical account that reimburses employees for eligible health care expenses that are not covered by their health plans. Both employees and employers can contribute to a…

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Advantages of a Premium Only Plan

If your employees pay a portion of their group insurance premiums, you may be able to reduce your payroll taxes, and give workers a little extra in their checks each and every payroll, by setting up premium only plan (POP) through payroll deductions for their share of insurance premiums. The Section 125 POP program is a…

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Pre-tax Health Care Options (SHOP)

Your church may pay for all or a portion of the cost of SHOP coverage on a pre-tax basis. If you want employees to share in the cost of coverage, your church may use a cafeteria plan, as describe in Section 125. This would allow the employees to pay a portion of the SHOP premiums…

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Marketplace/Exchange Health Coverage

Employees may apply for health coverage directly through the Health Insurance Marketplace, also known as the “Exchange”. Employees must pay for this coverage on a after-tax basis. Beginning, 2014, your church may not provide its employees with a pre-tax reimbursement for the cost of coverage obtained through the Exchange. However, it may increase an employee’s…

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