non profit CPA in Texas

Jan 25 2012

Are You Doing The Math?

You have completed the 4th quarter 941 and you have mailed out the W-2's, but did you compare the numbers? The IRS will compare them and send you one of their tacky letters if there are differences. So before you send that W-3 to the IRS, check the following calculations...

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Jan 23 2012

The $64,000 Question


The $64,000 question for any employer is: "What goes into taxable income?" For the minister, we often think that the congregation can "give" him a love offering, gift cards, or personal use of a Church vehicle, etc, and it will not be considered taxable income. Maybe you are saying "Our pastor is self employed according to the social security administration, so the church wants to pay him extra to cover what would have been the church's half of his social security. That's not taxable income to him." Unfortunately, it is. According to the IRS, all payments that are made to an employee because of his relationship with his employer are taxable unless the IRS has excluded them by statue.

What does that mean for the Church? It means that if a church member wants to "bless" his pastor or other minister on staff, and he gives a check to the church office to give to the minister, it is taxable income to the recipient. If another member wants to give a check to the minister who is retiring from the church, and he gives a check to the church office to give to the minister, it is taxable income to the recipient. The love offering or retirement gift was given because of the relationship between the member and the pastor of that church. It is a result of his employment at the church, and the IRS considers it to be income to the recipient.

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Jan 23 2012

1099-K... What is it?


January 31 is approaching and the tax forms are accumulating. Your organization or church has prepared the 1099-Misc forms for 2011, the W-2s have been sent out, and you're ready to breathe a sigh of relief. Then you get a new form in the mail, a 1099-K. "Oh no, another form,” you think. “What do I do with it?" For most non profits, the answer...

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