Deduct It! – Ministers Deductions
A minister who is classified as an employee may claim his or her unreimbursed expenses only as a miscellaneous itemized deduction on Form 1040 Schedule A. These expenses are deductible only if, and to the extent, they and any other miscellaneous itemized deductions exceed 2% of the minister’s adjusted gross income (AGI). A few common…
Long-term disability: Pre-tax or after-tax?
Long-term disability (LTD) insurance provides you with income if you become disabled and are unable to work. Although your church may pay the full premium for this coverage, you can choose whether the premium is deducted from your pay before or after taxes. Important tax considerations are as follows: If you choose to pay for…
Are You Eligible to Make Extra 403(B) Contributions?
The IRS just announced their pension plan contribution limits for 2018. The contribution limit for 403(b)s has been increased by $500 to $18,500. IRA contribution limits have not changed in half a decade and will be $5,500 once again. If you’re over 50, you are eligible to make catch-up contributions. You can put an additional…
Health Reimbursement Arrangement for Churches
A QSEHRA allows small churches who do not offer group health insurance to their employees to provide money to employees on a tax-free basis; the money can be used to pay for individual health insurance policies and to reimburse employees for certain medical expenses. To offer a QSEHRA, a small church must have fewer than…
Clergy Tax Deductions
You may be able to reduce your taxes by deducting unreimbursed, ministry-related expenses. These expenses may be claimed as miscellaneous Itemized Deductions on Schedule A. You should keep your expenses separated by those associated with your wages and those associated with your self-employment income, and you should keep receipts to substantiate these expenses. The following…
The Importance of Reimbursing Ministerial Expenses
Under 2017 law, it was a significant income tax advantage for a minister to have the employing church reimburse business expenses related to the ministry of the church. The reimbursements needed to meet the requirements of an accountable expense reimbursement plan. Simply stated, a tax-free expense reimbursement put an entire dollar back in the minister’s…
2018 Church and Clergy Tax Guide
Find comprehensive help understanding United States tax laws as they relate to pastors and churches with Richard Hammar‘s 2018 Church & Clergy Tax Guide. Tax law, in general, is highly complex and ever-changing. Add to that the many unique rules that apply to church and clergy and you’re set up for a challenging task that requires an…
Need to file W-2 or 1099-MISC forms?
For most churches, the mere thought of year-end reporting can cause headaches. You have to do it every year, and it consumes valuable time that you just don’t have to spare. Figuring out which form you need to file, tracking the changing regulation, and filing all takes time. Understanding all of the clergy rules associated…
2018 Tax Update – Moving Expense Deduction Eliminated
The Tax Cuts and Jobs Act that was passed in December 2017 which eliminated the moving deduction. The moving expense deduction disappears from the tax year 2018 through the tax year 2025, but it’s scheduled to come back at that time unless Congress intervenes to eliminate it permanently. This time frame means that if you moved…
3-Minute HR Fitness Test
An HR Audit helps determine the effectiveness of the necessary HR function of your church. It represents a systematic, objective tool to assess regulatory or policy compliance in the workplace, and you can take it as many times as you like. (Note: Not designed to be comprehensive for every church, the following list of questions…
