Commuting vs. Ministry Miles

Commute miles are from your home to your first ministry location and from your last ministry location to your home. Multiple trips you make throughout the day to your home are also considered commuting. Returning to the church from home for an evening meeting (such as a board meeting) would be considered commuting. Driving to…

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Reminder: Third Quarter Estimated Taxes Due!!!

Clergy are subject to estimated tax payments on a quarterly basis which include federal, social security and state taxes. For example, when you receive clergy income in the first quarter of the year, the taxes are due at the end of that quarter. The year is divided into four payment periods, or due dates, for…

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Church Pro Advisor Support

Researching a clergy tax law, church payroll & HR or bookkeeping issue on your own takes time and can leave you wondering if you’ve got the right answer. Turn to Clergy Financial Resources to save time while getting the correct answers. Most callers want answers to specific questions, interpretations of new laws or maybe you don’t have…

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When Should I Start Collecting Social Security?

Social Security benefits are typically computed using “average indexed monthly earnings.” This average summarizes up to 35 years of a worker’s indexed earnings. The Social Security department applies a formula to this average to compute the primary insurance amount (PIA). The PIA is the basis for the benefits that are paid to an individual. The…

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Must Churches File for 501(c)(3) Tax Exemption?

The Internal Revenue Code section 508(c) sets out that churches are automatically recognized as tax-exempt under 501(c)(3), and the IRS does not require churches to apply for tax-exempt status if they meet the following criteria: a distinct legal existence; a recognized creed and form of worship; a definite and distinct ecclesiastical government; a formal code…

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Don’t let your Employee Handbook collect dust

An employee handbook can be the foundation of employee performance or it can be a ticking time bomb that confuses employees. It all depends on how well it’s written and put to use. Churches face many hazards if they try to whip up handbooks on the fly. Too often, handbooks are inconsistent with the way…

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Housing Allowance for Clergy Couples

Clergy couples are limited to the equivalent of one housing allowance between the two incomes, providing they live in the same location. In this instance, clergy need to be mindful of the amount requested by each spouse in the annual housing allowance resolution. Generally, any expense to provide or maintain the home can be used to justify…

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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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Contributions for Short-Term Mission Trips

It is a common practice for churches to raise funds to send volunteers on short-term mission trips. The funds are often raised by a participant preferenced for his or her own trip expenses, as opposed to raising the funds for the group of volunteers as a whole. Tax-deductible contributions for short-term missionary trips must be made “to or for…

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Student Loan Forgiveness Creates New Tax Trap

There’s a new student loan repayment program that forgives some student loan debt if other payments are made. This new debt forgiveness is creating a tax surprise for the unsuspecting student. Here is what you need to know. The debt forgiveness program dilemma to combat the hardship of high student loan debt, a popular new…

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