How do I Determine my Fair Rental Value?

When calculating the Housing Allowance (and how much you get to exclude from income tax), it is necessary to calculate the fair rental value of your home. But how do you do that? Unlike your designated housing allowance or your housing expenses, IRS does not give us a quick and easy calculation to determine the…

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Freedom from Religion Foundation opts not to appeal

The Freedom from Religion Foundation, or FFRF, has decided not to pursue an additional challenge of the clergy housing allowance at the Supreme Court level. This means that clergy housing and parsonage allowance provisions will likely to remain in place for tax year 2019 and for years beyond. For those unfamiliar with court events, the…

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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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Why Paid Sick Leave Is Becoming More Popular

We’ve all seen it—one of our employees has a bad cold, maybe even the flu, but they come to work anyway. In some cases, the employee has the option of taking time off, and you’d prefer they do so, but still they show up, putting everyone in the workplace at risk. The reasons vary. Sometimes…

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Deducting Cell Phone Use for Ministry Purposes

Many Ministers use their own cell phone for Church activities. They also use it for personal calls. The big question is determining what you can claim on your return as a work deduction (without getting in trouble with the Internal Revenue Service!). We all know that the IRS is a document-focused agency. If you are…

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Top Three Reasons to Save with 403(b)

Reason 1: Income Tax Deduction Contributions to your 403(b) account are tax deductible for federal income abs social security taxes. Putting money into the 403(b) reduces your taxable income for that year. For example, if you put $5,000 into your 403(b) account and your federal income tax rate was 10%, by deferring that income you…

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8 questions about employee expense reimbursements

The compliance 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. Have you reviewed your expense reimbursement policy recently to determine if it adheres to the Internal Revenue Service (IRS) guidelines? Now is a great time to review your policy…

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Homeowners Exclusion Can Reduce Tax on Home Sale

Are you selling a personal residence in 2019? If you lived in the home for two out of the five years before the sale date, there may be some good news for you. Under current tax laws, IRS allows for individuals to exclude up to $250,000 of income from the sale of a personal residence….

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Second Quarter Estimated Payment Due 6/17!

Believe it or not, we are almost six months through the year. If you are a member of the clergy who is treated as self-employed in regards to Social Security and Medicare taxes, your second quarter estimated payment is due on 6/17/2019. The United States has a pay-as-you-go tax system. The Internal Revenue Service expects…

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Understanding Clergy W-2 Forms

In many smaller churches, the person in charge of preparing payroll or preparing W-2 forms is not always a payroll expert. They may not understand the complexities of clergy tax law or how compensation should be reported on the form. To help, Clergy Financial Resources has prepared a sample Clergy W-2 for reference, which you…

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