This Quarter’s Topics

Preparing W-2s

New IRS Scam

Housing Allowance

Church Parking Fringe Benefit

Reminders

Preparing W-2s
Employers are required to file W-2s with the federal government by January 31 per Section 6721(a) of the tax code. This is also the due date for giving W-2 copies to your employees, and for sending out any 1099 forms for non-employee compensation.

Here is a link to the information on our website about preparing a W-2:  http://ssfoundation.net/pastors/?qa_faqs=preparing-a-form-w-2

New IRS Scam
There is a new scam spreading a computer virus that uses e-mails purporting to be from the IRS regarding tax transcripts. The e-mail claims to be from the IRS, but it is not! Do not open the e-mail and or any attachments. You can forward the e-mail to the IRS at: phishing@irs.gov. The IRS will not initiate contact with you using an e-mail or phone call. All contact initiated by the IRS will be by a written letter.

Housing Allowance
You may have read about an ongoing court case involving the legitimacy of housing allowances for clergy. Currently there are no changes to any part of the housing allowance, and there may never be any changes. We will update you in the future if there are any changes in housing allowance that would impact clergy.

Church Parking Fringe Benefit
The 2017 tax reforms created a new section to the Internal Revenue Code: 512(a)(7). This section allowed a new unrelated business income item that is basically a transportation or parking fringe benefit that can be taxable to non-profits. This has two parts: qualified transportation benefits and qualified parking.

Qualified transportation benefits are easy to recognize: You provide a qualified transportation benefit if your church provides bus passes, train passes, or paid parking to the employees.

Qualified parking is employer provided parking for employees at, or near, the place of employment. For most churches this is a free parking lot used by the congregation and staff; this parking lot is usually surrounded by areas of free parking. In this situation the new law does not apply. However, if a church charges users to park in its lots, or the parking in the surrounding areas is generally paid parking then a church has provided a valued benefit to its employee(s). This is taxable to the church.

If you determine that your church does have unrelated business income from the expenses related to a qualified transportation benefit a Form 990-T must be filed if the expenses exceed $1,000. Be aware that most states also have a tax on nonprofits that report unrelated business income.

The IRS released guidance in late December regarding the qualified transportation benefits:  https://www.irs.gov/pub/irs-drop/n-18-99.pdf .

Reminders

Completed Tax Questionnaires are due by March 25 to ensure we can complete and mail back your return before the April 15 deadline. If you miss this deadline we can still prepare a return for you, but you may need to file late. If you are due a refund you have three years to file your return; after that you would forfeit your refund.

Please make sure telephone numbers provided are correct. And please double check that your voice mailbox is not full so that we can leave you a message if needed.

We love helping our clients when they call. Please be aware that this is our busiest time of the year and have your specific questions ready when you telephone our office.

Lastly, we will NOT prepare any tax return without a completed Tax Data Questionnaire. If your packet arrives without a completed questionnaire it will be mailed back to you.

Sincerely in Christ,

James W. Rickard

Click here to add your email to our Subscriber’s list.