Newsletter

This Quarter’s Topics

Our New Location

Our New Location

2019 Tax Season

IRS/State Notice

IRA vs 403(b)

 

 

2019 Tax Season

We have had a very challenging tax season and it’s not over!  If you have yet to send us your tax information we would encourage you not to wait.  Because we do not maintain a full-time staff after April 15th our turn around is not as quick.  If you are looking to file by July 15th we would encourage you to send us your tax information before the end of May.  This will give us ample time to prepare and mail your completed tax returns to you.

IRS/State Notices

VERY IMPORTANT:  If you receive a NOTICE from the IRS or your state with changes to your tax return please contact us before accepting any changes.  If we have all your correct information then most likely the change is an error.  We can formulate a response for you to send to fix the error.  It is especially important that you contact us if the IRS or state tries to send you money you are not expecting.  If we fix the error up front, you will not receive a bill asking for the money back (with interest) once they discover their error.  If you receive a notice for penalties or interest you do not need to contact us (although you are free to do so). 

IRA vs 403(b)

A church should provide some type of retirement for its pastor(s).  We always recommend a 403b rather than an IRA.  There are several reasons that a 403b is better than an IRA for a minister.  See our website for more information about this: 
http://ssfoundation.net/pastors?qa_faqs=403-b-versus-an-ira
When a church elects to make contributions to an IRA on behalf of a pastor, those contributions are not considered employer provided retirement.  An Individual Retirement Account is an Individual plan not an employer plan.  Any amount contributed to an IRA would be included as salary to the pastor.  The pastor may be able to deduct the contribution on his tax return so that he does not pay federal income tax on the contribution but he cannot deduct it from his SE (Self-Employment) income.  A pastor will pay SE tax on contributions to an IRA.

Sincerely in Christ,

James W. Rickard

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Attention: Tax Law is subject to interpretation. Please be advised that the material contained on this Web site is for information only and is not intended to be a substitute for professional legal advice. The Stewardship Services Foundation endeavors to update the information on this site on a regular basis, but cannot guarantee its accuracy at all times.