Church Bookkeeper Says He Owns Church Records
It was a frustrating day for the pastor of a small church in Illinois. They had hired a CPA to do their accounting, which for two years handled all of the accounting records and gave the church monthly income and expense reports as well as balance sheets. Each year the accountant also performed the annual audit, in keeping with the church's…
Read Full Article | CommentsA Dangerous Myth on the W-2 Form
"Raul, it is a burden to our church to have to file W-2 forms each year. We only have the pastor and the secretary on salary. Why can't we just give them 1099 forms? The IRS will still get its taxes and we won't have to do so much paperwork." That was a conversation I had with a pastor whose main concern was not as much about…
Read Full Article | CommentsHow Your Church Website is Breaking the Law
Today's 21st century church is so dramatically different from the church that we knew just a few years back that, outside of the unchanging message of salvation, it is hardly recognizable. Today churches meet in homes, restaurants, schools, senior living facilities, and yes, you said it...online. With the Internet being such a powerful…
Read Full Article | CommentsThree Myths About Form 1099 That May Affect You
This past week, an unusually large number of pastors and church treasurers were confused about the 1099 form. The confusion was quite extensive from thinking that the 1099 form was only for big churches while others thought it was optional. Today, I want to dispel the three most common myths I heard in recent days. 1. …
Read Full Article | CommentsChurch Tax Exempt Status Under Attack, IRS One-Two Punch
Over the last several years we have noticed a trend in which the IRS has tightened the review process of organizations applying for tax-exempt status. This tax-exempt status is most commonly known as getting 501(c)(3) recognition. Last year, we noticed that the IRS began to more thoroughly question the size of a church. Many IRS agents…
Read Full Article | CommentsHow One Pastor Paid $5,000.00 for Someone to do His Taxes
This is a real story about a pastor's tax return. I am retelling it with his permission. Pastor Jose was happy that the previous year he had received a refund of around $4,000.00. Having used a local tax return preparer working for a well-known outfit to do his taxes, Pastor Jose felt good going back to him when the next tax season came…
Read Full Article | CommentsThe 2012 Church Tax Calendar
Every year in January and February, our office gets numerous phone calls from pastors and leaders asking about tax forms and whether or not there is anything they should be doing now that it is the beginning of a new year. To that effect, we have put together a tax calendar to educate and guide you in the process. This calendar is specific…
Read Full Article | CommentsMinister Gets Hits Hard With Trust Fund Recovery Penalty
There is a law in the books that places pastors and church treasurers/financial secretaries at risk of incurring high personal tax penalties, commonly known as the Trust Fund Recovery Penalty. Though it has been in the books for a long time, many churches are not aware of how severe the penalty is and just how one can fall into its trap. IRS assesses…
Read Full Article | CommentsFebruary 12th--Sad Day for Churches in New York
The United States Supreme Court refused to hear the appeal of a church in Bronx, NY that was not allowed to rent a school for their Sunday worship service. The U.S. Court of Appeals for the Second Circuit ruled that public schools in New York are allowed to refuse rental of their facilities to churches for worship services, even though the schools…
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