Your Church and the IRS What You Need to Know; What You Need to Do c 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 NEW 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 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, 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 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 11

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 XX

W-2 Preparation Ministerial Form

W-2 Preparation Non-ministerial Form

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 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

FULL REPORT DOWNLOAD

Additional Helps  Toll free (866) for help with W-2, W-3, 1096, 1099  Order IRS forms from or 00.html 00.html

Where Do I Get the Forms?  Post office  Library  IRS – mail  Also helpful: All publications to stay on top of tax laws  Additional help from GuideStone %20Corporate/Ministry%20Tools/MinTaxGuide/2011/2112_Mini stersTaxGuide5.ashx %20Corporate/Ministry%20Tools/MinTaxGuide/2011/2112_Mini stersTaxGuide5.ashx

Additional Helps and Information David Rutledge EA, CEP, RFC Rutledge Financial Group

22 (559) direct line (559) cell phone Rod Wiltrout Church Finance Specialist