Blog
Payroll Tax Cut Like to Expire
As you may recall, last year a payroll tax holiday was passed by Congress lowering the amount of Social Security tax paid by employees making less than $110,000 from 6.2% to 4.2%. This tax cut is set to expire at year end and it seems unlikely that it will be...
Your Choice of Delivery Service Matters
The Tax Court has ruled that your choice of delivery service to the IRS does indeed matter. In a recent the case (Scaggs, T.C. Memo. 2012-258), the court ruled that using FedEx Express Saver Third Business Day was not an approved method of private delivery service...
Taxpayer Advocate Service Changes Case Criteria
Per its own website, the Taxpayer Advocate Service (TAS) is an independent organization within the IRS that exists to help taxpayers resolve problems with the IRS and recommend changes that will prevent future problems. TAS is designed to be a "safety net" for...
Do your volunteers’ hours constitute non-cash revenue?
The recognition of volunteer labor as non-cash revenue is dictated by FASB ASC 958-605-25-16, Contributed Services. This standard dictates that if the services (a) create or enhance non-financial assets or (b) require specialized skills, are performed by people with...
Donations designated for individuals are not deductible in most cases
A gift which is made to a church but designated for a specific individual is normally not tax-deductible to the donor. The rationale for this rule is that the gift is not intended for the benefit of the church but, rather, for the benefit of an individual. The...
The importance of donor letters
Just how important are those end of year donor letters and statements that charitable organizations send? Very important, according to the IRS. In a recent case, courts disallowed a charitable contribution deduction for a donor because of a defective donor letter sent...
Are love offerings taxable to the recipient?
Churches sometimes collect “love offerings” from the congregation for a pastor to honor and bless the individual for their service to the church. When the collected funds are given to the pastor, they must be reported as taxable income. If the recipient is an...
Federal Reserve shows no signs of new action
The minutes from the March 13th Federal Open Market Committee (FOMC) meeting were released today, and the idea of a fourth round of asset purchases (a.k.a. quantitative easing) seems to be no more than a remote possibility. The FOMC is the policy making committee of...
New studies show heavy debt burdens are holding areas back
New studies highlighted in a New York Times article today show that "...the recent recession may have brought about an enduring shift in the geography of American growth." It goes on to say that, "Various kinds of economic activity, including auto sales, fell more...
Fun with FICA tax!
One confusing area of church payroll is how to handle Social Security & Medicare taxes for Ordained/Licensed ministers. Ordained/Licensed ministers are considered to be self-employed when it comes to their income from the church. This means that churches are not...