This Quarter’s Topics

2018 Tax Changes

Moving Expenses

Form 1095-A

HRA

New Scam targeting Churches

2018 Tax Changes
We cannot stress enough how important it is that your employer reimburse your business expenses.  One of the changes for 2018 is the elimination of form 2106, Unreimbursed Employee Business Expenses.  This will impact federal income tax but we are not certain if, or how, it may impact Self-Employment tax.   We do know that the best way to protect yourself from paying tax on your business expenses is to have the church/employer reimburse you rather than planning to take your expenses to the tax return.  With the elimination of form 2106 you will also no longer be able to deduct miscellaneous expenses such as investment fees, safety deposit box fees, tax preparation fees, and union dues.

Moving Expenses
Another change for 2018 is that there is no longer a tax free option for covering moving expenses.  Employers can no longer cover this expense as a tax free benefit and you cannot deduct moving expenses on your federal tax  return.

Form 1095-A
When you obtain health insurance through one of the state exchanges or marketplace and receive a subsidy, you MUST send us a copy of your form 1095-A when we prepare your tax return.  If you do not receive a 1095-A you will have to contact the exchange to get one before you send us your tax information.

HRA
There are only two tax free options for covering health insurance premiums.
The first option is for the church/employer to purchase group coverage from an insurance carrier and offer coverage to all their full time employees.  This option can be expensive.  The second option is to use a HRA (Health Reimbursement Arrangement).  This is an in-house plan that the church would manage.  Here is a link to the specifics of the HRA as well as a sample plan that you can copy and paste into your own document and adopt as your plan.  http://ssfoundation.net/pastors?qa_faqs=health-reimbursement-arrangement-hra

New Scam targeting Churches

There is a new scam targeting churches.  Someone will give a donation (usually online but it can be a check in the offering) and contact the church frantically claiming they mistakenly gave more than intended asking for a refund of the excess.  The scenario may be that “I accidentally gave $5,000 instead of $50 and I do not have the funds to make it to my next paycheck”.  Churches will refund the excess only to find the donor’s account contains insufficient funds to cover the contribution.  Churches are under no obligation to return any portion of a contribution but if you choose to do so be sure the contribution has had time to get through the banking system.

Sincerely in Christ,

James W. Rickard

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