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Your Church and the IRS
What You Need to Know;
What You Need to Do
Copyright 2014
Year-end IRS Regulations
Why Worry about the IRS?
• God’s Word says we are to obey our
government leaders
• Witness in the Community
• Confidence of our Church Members
• Fines
• Loss of 501c(3) status
• Obey the Law
Year-end IRS Regulations
A NEW IRS form to fill out
• 8822-b
• Change of Address
• State of California has this form in the SI-100
or Statement of Information
• DIFFERENCE: IRS wants it annually while CA
wants it every other year
• More Penalties with CA form
Have Employees fill out
Annually…
 HSA/HRA/FSA insurance form if high
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deductible insurance is offered
Dental form if dental insurance if offered
Salary Reduction form for 401K or 403B
retirement plans
Housing Allowance form (ministers only)
Strongly recommend a new W-4
Take Advantage of the New
Limits!
About those I-9’s
 I-9 must be filled out by all employees and filed
separately from employee file
 All employees (new employees and those hired
since Nov. 6, 1986) must fill out section one of
Form I-9 and churches must fill out section two
 Do not file Form I-9 with U.S. Immigrations and Customs
Enforcement (ICE) or USCIS. Form I-9 must be kept by the
employer either for three years after the date of hire or
for one year after employment is terminated, whichever
is later. The form must be available for inspection by
authorized U.S. Government officials (e.g., Department
of Homeland Security, Department of Labor, Office of
Special Counsel).
Depositing Withheld Taxes
 Three types of taxes collected: Income taxes,
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employee’s FICA, employer’s FICA
Taxes paid monthly if taxes are $50,000 or less
in the lookback period
Taxes paid bi-weekly if taxes are more than
$50,000
See IRS Publication 15- download a new one
Some computer finance programs compute
this for you
Form 941 – A Must
 Filed Quarterly on the last day of the month
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and can be filed electronically
Use the 941X if you make a mistake
Done even if you only have ministerial staff
Taxes less than $2,500 are sent with form 944
at year end-be timely in payment:
For 2013: If you estimate your taxes will be
less than $1,000 you may contact the IRS and
request to use the 944 form. See document.
Unrelated Business Incme
 Any income that does not match the
purpose of the church
 Cell tower income, etc
 File a 990T
 Does not apply to churches renting your
facilities to hold church – same type of
business
Other Federal Requirements
 All cash donations less than $250 must be
substantiated by either bank record (canceled
check) or written communication from the charity
 All donations over $250 must be substantiated by
written communication from the charity with
name of donor on statement
 Property over $250 in value must have description
Other Federal Requirements
 Gifts in excess of $5,000 must be appraised by an
accredited appraiser and IRS form 8283 must be
used to document the gift. Donation is the sale
price.
 Receipt should not list value of the gift
 Donee (church) must keep sufficient records to
validate gift-form 8282
 Receipt must be given no later than date of
donation or tax return due date
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W-2 and W-3
 W-3 is Transmittal form for W-2’s
W-2’s – Fixing Mistakes
 W-2c if you make a mistake
 W-3c if you make a mistake on the W-3
W-3 Boxes
X
X
W-2 Preparation
W-2 Preparation
IRS form 4361
 Regarding Ministers who opted out of
Social Security
 They can require that you produce it in the
future
 They are now doing so
 Penalties can be severe if you cannot
produce it
1099 MISC
 Issued to self-employed for income tax or non
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employees. Issued if paid more than $600
annually
Not needed for a corporation or for anyone
who will receive a W-2 from another employer
for work done
Name, address and SS needed before 1099
can be issued. Get the info before payment is
made and have them fill out a W-9
1099 is corrected by reissue with the box at
the top mark checked
1096 is the Transmittal form for 1099 misc
Additional Helps
 Toll free (866) 455-7438 for help with W-2, W-3,
1096, 1099
 Order IRS forms from 1-800-829-3676 or
http://www.irs.gov/businesses/page/0,,id=23108,
00.html
Where Do I Get the Forms?
 Post office
 Library
 IRS – mail
 Also helpful: All publications to stay on top of
tax laws
http://www.irs.gov/app/picklist/list/formsPublications.html
 Additional help from GuideStone
http://www.guidestone.org/MinistryTools/~/media/GuideStone
%20Corporate/Ministry%20Tools/MinTaxGuide/2011/2112_Mini
stersTaxGuide5.ashx
Additional Helps and Information
David Rutledge EA, CEP, RFC
Rutledge Financial Group
david@yourchurchmatters.com
YEAR END CHECKUP FOR
CHURCHES. 15 + PAGES, PLUS
A CHECK OFF PAGE
WHAT QUESTIONS CAN I
ANSWER FOR YOU?
Rod Wiltrout
Church Finance Specialist
(559) 256-0858 direct line
(559) 287-7840 cell phone
rwiltrout@csbc.com
www.csbc.com/financialmatters
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