Could You Be Causing Your Minister to Pay Unnecessary Taxes?

If your minister’s compensation package is not structured properly, he may be paying unnecessary taxes or underpaying his taxes. Poor stewardship or underpaying taxes are poor options.

Vehicle business mileage, business long distance, books, periodicals, conventions, seminars, education, overnight travel, etc., are necessary for the minister to accomplish his mission of winning the lost and caring for the flock. Moneys spent for these items represent a significant portion of the average compensation package. The burden of expenses is increased if undue taxes must be paid because of failure to comply with current tax regulations.

Unless reimbursed under an accountable plan, your minister’s business expenses will be partially or–
in some situations–even totally non-deductible, thereby resulting in an overpayment of taxes.

One method of reimbursing expenses commonly used a decade ago was simply to deduct all professional expenses each payday from taxable income. Since 1991, that method is no longer acceptable for the reimbursement of expenses. Read More…

Posted under Church Taxes

This post was written by burbrink on September 10, 2008

The W2 Form Should a Minister Receive a W2?

The vast majority of ministers are actually employees of the church.

For many years the I.R.S. has considered most ministers to be employees of the church. None of the new tax laws have changed I.R.S.’ intent to have ministers treated as employees of the church.

A properly structured compensation package and accountable expense reimbursement plan will reduce income and Social Security taxes to the legal minimum.

Withholding of taxes (ministers filing as employees) is still on a VOLUNTARY basis. If the church and the minister both want to do it, income taxes can be withheld. The law PERMITS but does NOT REQUIRE withholding for ministers. Read More…

Posted under Church Taxes

This post was written by burbrink on September 10, 2008

Your Minister: Will He Be Able to Retire?

Is your minister saving enough money for his retirement years? Depending on how many years there are before he retires, he will need to accumulate hundreds of thousands of dollars in investments if he hopes to retire with an income that will permit him to maintain even a moderate lifestyle.

There are a variety of retirement plans available to ministers: IRA, Roth IRA, TSA, SEP, 401k, Christian Church Pension Plan, plus many others. Which method of saving for retirement is best is not easily answered.

Contact us about how you can help your minister start saving now for his retirement years. We can help.

Posted under Church Taxes

This post was written by burbrink on September 10, 2008

Church Treasurer: Could You Use Some Help?

Could you use some help with the church payroll?

Many church treasurers find that handling the church payroll requires a great deal of time. Complying with complex tax regulations can cause anxiety and frustration.

In view of this need, we now offer complete payroll services. Most payroll service firms are not familiar with the different requirements of church payrolls.

Since ministers are not subject to FICA/Medicare tax withholding, their paycheck must be calculated differently. Tax Sheltered Annuities (retirement funds), housing allowances and employee benefits are areas that need special handling. Read More…

Posted under Church Taxes

This post was written by burbrink on September 10, 2008