Housing Allowance is a substantial tax benefit provided by Section 107 of the Internal Revenue Code to qualifying ministers. Ministers can exclude the fair market rental value of their home from gross income for income tax purposes. This includes furnishings, utilities, and other items needed to maintain the home. This privilege has been challenged a [...]
You may not know this, but taking money from your church is rather easy. Churches are unique in that the money received is not in exchange for a product or service, so there is no inventory to indicate a theft has occurred. Unlike a retail store that recognizes theft when they do inventory and takes [...]
Who you allow use your facility can have major impacts on your church. If you rent to a for profit organization or even a nonprofit organization that doesn’t align with the stated mission of your church, you could lose the property tax exemption on your church. Then of course, there is the outside group that [...]
I have performed many Financial Policies and Procedure Audits over the past three years and a subject that always seems to be a sore spot is the preschool. Some of the people I interview see the preschool as a ministry outreach to the community. Others see it as an income source and good use of [...]
Over the years I have come across churches who provide their pastor(s) with monthly payments for continuing education, car use, and professional expenses. The way it works is that the church pays these amounts to their pastor and the amount paid is added to the pastor’s w-2 as taxable income. Then, the pastor deducts the [...]
Who is an employee? Who is an independent contractor? I’ve seen church musicians, janitors, Sunday school teachers, child care workers, youth workers, and even pastors classified one way in one church and the other way in another church. Who is right? Does it matter? In California, the question of who is an employee and who [...]
Congregations everywhere are trying to ensure their financial system is accurate and safe. Church fraud and embezzlement continues to be a rapidly growing challenge. Brotherhood Mutual, a church insurance company shares some shocking statistics that Church Fraud now exceeds what churches give to mission work. “Increasing at an annual rate of nearly six percent, [...]
Credit cards and debit cards are extremely convenient. I rarely carry cash, or even my checkbook anymore. It is so easy to pull out one of the cards in my wallet. This is true for many of us, and has been for many years now. We’ve seen it change the way churches operate; from [...]
Often within discussions about church finances, the question comes up, “should my church have an audit done?” Well, similar to other questions asked in church, the answer is, “it all depends…” The real question behind the question is what needs to be addressed. What is it you are attempting to accomplish? Some churches [...]
I was told, “the treasurer is the only one who ever sees what anyone gives.” The pastor of this smaller congregation explained to me how good this little church was at keeping the contributions of members a secret. It was as if this was a point of pride for this congregation. They aren’t the only [...]
