THREE REASONS WHY A MINISTER SHOULD BE CONSIDERED AN EMPLOYEE OF THE CHURCH

There seems to be an ongoing debate as to whether a minister should be considered an employee of the church, and thus receive IRS Form W-2 at the end of the year, or be considered self-employed and receive Form 1099.  Much of this controversy arises because ministers are treated one way for income tax purposes and another way for social security tax purposes.  This is very confusing to ministers and to those who must report ministers’ incomes to the federal government.

There are at least three reasons why ministers’ incomes should be reported on Form W-2 (as an employee) and not on Form 1099 (as self-employed).

1.     First, the likelihood of an audit by the IRS is greatly reduced if a minister’s income is reported on a W-2 instead of a 1099.  This reason alone should be sufficient to cause all ministers to seriously consider using Form W-2.

2.     Secondly, the costs of various fringe benefits, such as church-paid health insurance premiums, will be tax-exempt.  Or to put it another way, the minister’s disposable income can be increased by treating him/her as an employee for federal income tax purposes, and it costs the church nothing to do so.

3.     Reporting income using Form W-2 will avoid the penalties and interest that a “self-employed” minister would have to pay if he/she is audited and reclassified by the IRS as an employee of the church.  Tests used by the IRS and by the courts to determine the employment status of ministers will most often classify ministers as employees of the church.  The penalties and interest are therefore real possibilities for ministers who report as “self-employed.”

Note that the above apply to ministers who are on staff at a local church.  For other ministers, such as evangelists, reporting income as “self-employed” is probably the appropriate route to take.  Each minister’s situation is unique, so each minister should consult his/her CPA for the latest guidance on these issues.  If I can provide further light on this subject, please do not hesitate to contact me at Ron@VisionAdvocates.org or by phone at 770-733-4522.

2020 VISION: "It's not a program, it's a lifestyle. . . "

If you haven't joined the "2020 Vision" movement, there is no better time than now.  "2020 Vision" is not a short-term program, but a long-term commitment to success and health at the local church level and in every church family.  It is a vital mission of every church.  "2020 Vision" is designed to defeat Satan by overcoming his number one tool for thwarting the work of the church - money, materialism and debt.


Look at the potential savings from the families at just one church at work on its "2020 Vision":

Potential interest savings                                           $95,020 per family
Potential monthly payment savings:                          $438,853 per family
Total years and months of payments saved:            13 years, 8 months per family
Total potential savings difference at retirement:     $985,469 per family

The cost for a family to participate in the project is less than 50 cents a day, less than one "Big Mac" burger a week.  Is it worth sacrificing the equivalent of a hamburger a week to live happy, healthy and debt-free, to retire without poverty, to experience the joy of blessing others?  I think so.  In fact, I know so.  Don't be left behind.  Contact me at Ron@VisionAdvocates.org or by phone at 770-733-4522 and join with these who are on the journey to heaven and intend to enjoy every step of the way.

HEALTH CARE TAX CREDIT: IT'S NOT TOO LATE!

In late 2010, Congress passed a law which provides assistance to small businesses in meeting the costs of providing health care insurance to their employees.  Many small non-profit organizations, including churches, are included in the law's definition of "small business."

Two churches that I helped with their filings are due to receive over $5,000 each as a result of this new law.  One state office should be receiving a check for almost $10,000.

Even if you missed the May 15^th deadline for filing for calendar year 2010, your church may still qualify for a check from the federal government.  Since this tax credit is a “refundable” credit, your church could get a check even though it does not pay any taxes to the federal government.

If your church operates its finances on a fiscal year basis (such as from September through August) instead of a calendar year basis (January through December), you may still file for the tax credit based on the end of your fiscal year.   If you are on the September – August fiscal year like the state and international offices, you may file in September of 2011 for the period August 2010 – September 2011.  The same requirements apply for qualifying as did for calendar year 2010.

If you need more information or any help in completing the necessary paperwork to claim the tax credit, please contact me right away at Ron@VisionAdvocates.org or by phone at 770-733-4522.