1. ________________: June 2014 __________ Presenter: Corey A. Pfaffe, CPA, PhD

2. _______________: June 2014 ____________ Presenter: Corey A. Pfaffe, CPA, PhD Agenda:  Today—Financial “hot topics” update  Tomorrow—Ministry topics from a “friendly” Agenda:  Today—Financial “hot topics” update  Tomorrow—Ministry topics from a “friendly”

3. Financial “Hot Topics” Update

4. Tax Review and Update Foreign Earned Income Exclusion Housing allowance Ministry (“Business”) Expenses –Ministry or Personal (Ordinary and Necessary) –Missionary as earner versus family as earners Support issues

5. Housing Allowance: Review Principal residence Three-part test –Actual expenses –Designated amount –Fair rental value, plus actual cost of utilities Partial reduction of deductible expenses

6. Housing Allowance: Unconstitutional?

7. Opting Out of Social Security 15.3% SECA; not 7.65% FICA Requirements Caution! Does opting out include the ACA?

8. Retirement Plan Options: Review Internal Revenue Code Section 403(b) plans Traditional Individual Retirement Accounts (IRAs) Roth IRAs (and Roth 403(b) plans)

9. FBARs—Foreign Bank and Financial Accounts Report What? FinCEN Form 114, electronically reporting foreign financial interests and signature authority Who? Any U.S. person with aggregate value in foreign financial accounts exceeding $10,000 at any time in 2013 When? June 30, 2014 (may not be extended) Why? Consequence of failure to properly file “not to exceed $10,000 …”

10. What does FinCEN want to know? FBARs—Foreign Bank and Financial Accounts Report

11. Options FBARs—Foreign Bank and Financial Accounts Report Go to www.irs.gov and type “FBAR” in the search windowwww.irs.gov Engage a BSA E-Filer—a firm registered and authorized under the Bank Secrecy Act to file on behalf of others through the Financial Crimes Enforcement Network

12. Affordable Care Act “Individual Shared Responsibility Payment” –2014: greater of 1% of your household income in excess of “filing threshold” OR $285 (for family of six) –By 2016: greater of 2.5% of your household income in excess of “filing threshold” OR $695 per person ($4,170 for family of six) 100% exception for missionaries: –If you qualify for the foreign earned income exclusion with a once- per-year presence in the U.S. of no more than three months

13. For more information... IRS Publications 54 – U.S. Citizens Abroad 463 – Travel 535 – Business Expenses 1771 – Charitable Contributions 1828 – Churches & Religious Org. IRS Publications 54 – U.S. Citizens Abroad 463 – Travel 535 – Business Expenses 1771 – Charitable Contributions 1828 – Churches & Religious Org. IRS-Other Form 2555 – Foreign Earned Income Exclusion Form 8938 – Report of Foreign Bank and Financial Accounts (FBAR) Ministers Audit Techniques Guide IRS-Other Form 2555 – Foreign Earned Income Exclusion Form 8938 – Report of Foreign Bank and Financial Accounts (FBAR) Ministers Audit Techniques Guide

14. For more information... Non-profit organization accounting principles Compensation practices Benevolent activities Contributions issues Foreign missions support Ministerial tax planning http://www.ministrycpa.blogspot.com/

15. _______________: June 2014 _____________ Ministry Topics from a “Friendly”

16. Short-Term Missions Trips to “Your Place” Handling fundraising Qualified expenses Reporting

17. Three Required Ingredients in Any Successful Family Budget A monthly budget –IN — net payroll checks, average draws –OUT — every pay period, every month, Budget Busters A payday method Staying on track between paydays

18. Resources STRENGTHS: A slap upside the head! Testimonies STRENGTHS: Easy-to-read, Bible-rich teaching STRENGTHS: Gets a couple talking about money & priorities

19. Communications with Your Supporters Email often, but keep it short Supporters want to hear about your personal and family needs, both spiritual and practical It’s a delicate subject, but supporters said that they heard the least about your financial needs and gave the strongest indication of any subject that they did not hear enough about these needs Observations and interpretations