When does the I-9 need to be completed?

All new employees must complete Section 1 of Form I-9 on or before their first day of employment. Then, within three business days of their start date, they should submit acceptable proof of their identity and eligibility to work in the United States.  As the church, you should complete Section 2 within those same three…

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Employee Expense Reimbursements

The compliance and financial risks of mishandling employee expense reimbursements have spiked in recent years. And the IRS is in the middle of a wide-ranging audit crackdown on employment-tax issues. Would your books survive an IRS spot-check? Do you know which reimbursements for employee expenses should be treated as expenses … and which as compensation?…

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Payroll Alert

Question An employee suffered a house fire and lost everything. We gave her $5,000 to help her reestablish her household. Is this emergency assistance taxable? Answer Yes. If the employer’s payment is a gift, it’s taxable and must be included in gross income. The payment is reported on Form 1099-MISC as other income. When you need fast,…

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How do we pay nonexempt staff for after-hours communications?

Generally, non-exempt employees are paid hourly. We recommend instructing non-exempt employees to track all their time worked and prohibit working off the clock. Churches may use any timekeeping method they choose as long as it’s accurate and capturing all the required information (see below). For example, you may use a time clock, have a timekeeper keep track…

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The Decision: Clergy or Non-Clergy

When a church hires an employee, one of the initial decisions that must be made is whether to treat the worker as clergy, non-clergy employee or contractor. This decision may seem insignificant, but it has huge implications when it comes to payroll. Ministers have what is commonly referred to as “dual tax status.” For federal…

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2018 Webinar for Clergy W-2 Forms

Filing clergy returns can be an intimidating and even confusing process to the uninitiated. Practitioners and bookkeepers unfamiliar with clergy tax law will quickly find that Clergy W-2 forms differ slightly from regular W-2 forms. Often Social Security and Medicare withholding will get reported by mistake when they should not. Sometimes housing allowance or parsonages…

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W-2 and 1099 Deadline Approaching

January is here, bringing with it a new tax year and (you guessed it) new tax deadlines. W-2 and 1099 filings can be especially important for smaller organizations, who can be caught unaware that failing to file these forms timely causes stiff penalties. According to IRS’s instructions, employers must complete Form W-2, furnish a copy…

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Clergy pay social security as self-employed

Determining the correct social security tax for clergy is often confusing. Clergy pay social security tax under the Self-Employment Contributions Act (SECA), not under the Federal Insurance Contributions Act (FICA). Clergy engaged in the exercise of ministry are always treated as self-employed for social security tax purposes. A congregation should never deduct FICA tax from the pay of a…

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The 10 Types of PTO

According to the Bureau of Labor Statistics, more than 70% of employees have access to paid days off from work for sick or vacation time. Although these are common paid time off programs, sick and vacation days aren’t the only time off work you can offer. Get the scoop on different types of paid time off below….

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How to Pay an Independent Contractor

There are specific rules that dictate whether you should pay someone as an employee or as an independent contractor.  There is no single test for determining if an individual is an independent contractor or an employee. Employee misclassification has always been an important issue and often can trigger IRS attention. Generally, an employee has an…

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