The Bookkeeping with a Purpose Podcast- Bookkeeping, Christian Entrepreneur, Church finances, Clergy Taxes, Minister payroll, Biblical mindset,

Ep 60 ~ Decoding the DOL’s New Independent Contractor Rule

NOTE: The Department of Labor (DOL) and the Internal Revenue Service (IRS) use different criteria for determining whether a worker is an employee or independent contractor, and the criteria serve different purposes.
The DOLs criteria are primarily used for determining eligibility for wage and hourly protections under the Fair Labor Standards Act (FLSA), ( which we covered in Ep 57) while the IRS’s 20-factor control test is used for tax purposes.
On January 9th, 2024, the DOL unveiled its final rule, which fundamentally alters how businesses/organizations (incl. churches) determine whether a worker is an employee or an independent contractor. Effective March 11th, 2024, this rule replaces the 2021 independent contractor rule issued under former President Donald Trump, introducing a six-factor test to evaluate worker classification.
 But what exactly are these six factors, and how do they impact churches and workers alike? We break it down in this episode.
xo,
Michelle
Next Steps:
Grab Your Freebies:
Six Steps to Doing Business God's Way    biz owners
A QuickStart Guide to Church Finances   everybody
Looking for a group of like-minded people that want to keep Jesus at the center of everything they do?
 Join the BEST FaceBook group for church finances at Church Bookkeeping and Clergy Tax Facebook Group
If you’re a church staff member or volunteer looking to serve your local church with excellence, check out my membership group The Bookkeepers Inner Circle @ www.bookkeepersInnerCircle.com
Need an extra hand with an immediate situation? Schedule a Consultation:
Schedule Consultation

Ep 59 ~ Understanding Federal Taxes for Ministers and Churches

Segment 1: Tax Realities
Ministers Pay Taxes: Dispelling myths.
Legal Truth: Courts reject tax exemption claims.
Cautionary Note: Risks of tax evasion.
Segment 2: Ministerial Taxes 101
Tax Status: Ministers are self-employed.
Who's Qualified: Active licensed, ordained, or commissioned ministers.
Tax Responsibilities: Pay taxes through withholding or estimated payments.
Segment 3: Compliance & Penalties
Filing Rules: Ministers must file if earning over $400.
Accuracy Matters: Penalties for wrong tax reporting.
Get Help: Advising professional tax assistance.
Segment 4: Church Payroll Taxes
Get FEIN: Federal Employer Identification Number is essential.
How to Get FEIN: Fill Form SS-4.
EFTPS Registration: Needed for tax payments.
Segment 5: Payroll Tax Basics
Federal Income Tax
Medicare Tax
Social Security Tax
Unemployment Taxes for Churches.
xo,
Michelle
Next Steps:
Grab Your Freebies:
Six Steps to Doing Business God's Way    biz owners
A QuickStart Guide to Church Finances   everybody
Looking for a group of like-minded people that want to keep Jesus at the center of everything they do?
 Join the BEST FaceBook group for church finances at Church Bookkeeping and Clergy Tax Facebook Group
If you’re a church staff member or volunteer looking to serve your local church with excellence, check out my membership group The Bookkeepers Inner Circle @ www.bookkeepersInnerCircle.com
Need an extra hand with an immediate situation? Schedule a Consultation:
Schedule Consultation
 

Ep 58 ~ How to Properly Structure a Donation Acknowledgement Letter

Tax season is upon us, and with it comes the need for proper documentation. Improper donation receipts can cause headaches for both donors and organizations. In this episode, we'll dive into the essential elements of a donation acknowledgment letter to ensure compliance with IRS standards.
Main Content:
Understanding IRS Requirements:
Explaining IRS guidelines for donors, including the need for timely written communication and recordkeeping.
Highlighting the responsibility of donors to obtain proper documentation for charitable contributions.
Church's Responsibilities:
Outlining the essential components of a donation acknowledgement letter, as specified by the IRS.
Emphasizing the importance of timely and accurate acknowledgement for contributions of $250 or more.
Crafting the Letter:
Providing a step-by-step guide for structuring a donation acknowledgement letter.
Discussing the format, content, and personalization techniques to enhance donor engagement.
Conclusion: As we wrap up, remember the significance of accurate recordkeeping and timely acknowledgement in fostering trust and compliance. By following these guidelines, you can ensure that your organization meets IRS standards and cultivates strong relationships with donors.
See links below that were referenced in this episode.
IRS Publication 1771
IRS Publication 526
xo,
Michelle
Next Steps:
Grab Your Freebies:
Six Steps to Doing Business God's Way    biz owners
A QuickStart Guide to Church Finances   everybody
Looking for a group of like-minded people that want to keep Jesus at the center of everything they do?
 
Join the BEST FaceBook group for church finances at Church Bookkeeping and Clergy Tax Facebook Group
 
If you’re a church staff member or volunteer looking to serve your local church with excellence, check out my membership group The Bookkeepers Inner Circle @ www.bookkeepersInnerCircle.com
Need an extra hand with an immediate situation? Schedule a Consultation:
Schedule Consultation

Ep 57 ~ Unraveling the Mystery of Church Employees and Overtime Rules

Introduction:
Welcome to episode 57 of the Bookkeeping with a Purpose podcast!
Exploring the complexities of federal regulations, particularly regarding church employees and overtime rules.
I stumbled upon something fascinating recently, and you know me, I can’t keep cool discoveries to myself. So, buckle up for a journey into the world of church finance regulations!
Federal regulations often lack clarity, especially when it comes to topics like church employees and overtime rules.
Sparked by a question about a past episode I recorded on church employees and overtime rules, recent research uncovered new insights, prompting a deeper dive into the subject. Spoiler alert: it’s not as straightforward as it seems.
Segment 1: Quote of the Day
Drawing inspiration from Greek philosopher Aristotle: “We are what we repeatedly do. Excellence then, is not an act, but a habit.”
Segment 2: Understanding Fact Sheet #14A
Exploring Fact Sheet #14A from the Wage & Hour Division of the US Department of Labor.
Highlighting protections offered by the Fair Labor Standards Act (FLSA), including minimum wage, overtime regulations, record-keeping requirements, and child labor standards.
Segment 3: Coverage Criteria
Diving into two key ways employees are covered under the FLSA.
Enterprise Coverage: Employees of businesses generating at least $500,000 in annual sales revenue, with exceptions for non-profit organizations unless engaged in qualifying commercial activities.
Individual Coverage: Employees engaged in interstate commerce or closely-related processes essential to such production.
Segment 4: Application to Church Employees
Demonstrating how church employees may fall under FLSA protections, particularly through involvement in interstate commerce-related activities.
Debunking common misconceptions and emphasizing compliance with overtime regulations, minimum wage rules, record-keeping requirements, and child labor standards.
Segment 5: Volunteer Guidelines
Clarifying volunteer regulations outlined in Fact Sheet #14A:
Restrictions on volunteering in commercial activities.
Prohibitions against displacing paid employees with volunteers.
Limitations on paid employees volunteering for similar services performed in their job roles.
Episode Support Links
Fact Sheet #14A: Non-Profit Organizations and the Fair Labor Standards Act (FLSA)
xo,
Michelle
Next Steps:
Grab Your Freebies:
6 Step Process to Doing Business God's Way    biz owners
FREE QuickStart Guide to Church Finances   everybody
Looking for a group of like-minded people that want to keep Jesus at the center of everything they do?
 
Join the BEST FaceBook group for church finances at Church Bookkeeping & Clergy Tax FaceBook Group
 
If you’re a church staff member or volunteer looking to serve your local church with excellence, check out my membership group The Bookkeepers Inner Circle @ Bookkeepers Inner Circle
Need an extra hand with an immediate situation? Schedule a Consultation:
Consultation   

Ep 56 ~ Got your budget? Great! Now here’s the next step.

In Episode 42 I talked to you about 3 steps to help you create a sound budget. In today's episode I want to help you take the next step in the budgeting process - ensuring that every program you created a budget line item for is carried out with excellence so that you can actually stay within that budget! Listen in to see how you can continue to honor God in the budget process.
 
xo,
Michelle
Next Steps:
Grab Your Freebies:
https://churchfinances.ck.page/6steps    biz owners
https://churchfinances.ck.page/guide   everybody
Looking for a group of like-minded people that want to keep Jesus at the center of everything they do?
Join the BEST FaceBook group for church finances at https://www.facebook.com/groups/churchbookkeepingandclergytax
Need an extra hand with an immediate situation? Schedule a Consultation:
https://churchfinances.org/consult      

Ep 55 ~ Housing Designation and Retirement

Direct from the IRS website:
A minister's housing allowance (sometimes called a parsonage allowance or a rental allowance) is excludable from gross income for income tax purposes but not for self-employment tax purposes.
If you receive as part of your salary (for services as a minister) an amount officially designated (in advance of payment) as a housing allowance, and the amount isn’t more than reasonable pay for your services, you can exclude from gross income the lesser of the following amounts:
the amount officially designated (in advance of payment) as a housing allowance;
the amount actually used to provide or rent a home; or
the fair market rental value of the home (including furnishings, utilities, garage, etc.).
The payments officially designated as a housing allowance must be used in the year received.
Include any amount of the allowance that you can't exclude as wages on line 1a of Form 1040, U.S. Individual Income Tax Return or Form 1040-SR, U.S. Tax Return for Seniors. Enter “Excess allowance” and the amount on the dotted line next to line 1a.
If your congregation furnishes housing in kind as pay for your services as a minister instead of a housing allowance, you may exclude the fair market rental value of the housing from income, but you must include the fair market rental value of the housing in net earnings from self-employment for self-employment tax purposes.
For more information on a minister’s housing allowance, refer to Publication 517, Social Security and Other Information for Members of the Clergy and Religious Workers.
For information on earnings for clergy and reporting of self-employment tax, refer to Tax Topic 417, Earnings for Clergy.
xo,
Michelle
Next Steps:
Grab Your Freebies:
https://churchfinances.ck.page/6steps    biz owners
https://churchfinances.ck.page/guide   everybody
Looking for a group of like-minded people that want to keep Jesus at the center of everything they do?
Join the BEST FaceBook group for church finances at https://www.facebook.com/groups/churchbookkeepingandclergytax
 
If you’re a church staff member or volunteer looking to serve your local church with excellence, check out my membership group The Bookkeepers Inner Circle @ www.bookkeepersInnerCircle.com
Need an extra hand with an immediate situation? Schedule a Consultation:
https://churchfinances.org/consult      

Ep 54 ~ 1099's: Who do I Send them to and Which Form do I use?

1099-NEC or 1099-Misc?
Knowing which form to use can be confusing.
In today's episode I go over 
1. who should receive a Form 1099
2. which Form 1099 do you send
3. special circumstances that determine which form to use
4. e-filing requirements
5. filing deadlines
I hope this helps!
xo,
Michelle
Next Steps:
Grab Your Freebies:
https://churchfinances.ck.page/6steps    biz owners
https://churchfinances.ck.page/guide   everybody
Looking for a group of like-minded people that want to keep Jesus at the center of everything they do?
 
Join the BEST FaceBook group for church finances at https://www.facebook.com/groups/churchbookkeepingandclergytax
 
If you’re a church staff member or volunteer looking to serve your local church with excellence, check out my membership group The Bookkeepers Inner Circle @ www.bookkeepersInnerCircle.com
Need an extra hand with an immediate situation? Schedule a Consultation:
https://churchfinances.org/consult      

Ep 53~How to Correctly Fill out those W-2's for your Ministers

In today's episode we go over how to properly fill out your Ministers W-2, the new mileage rate for 2024 and 1099 filing requirements and deadlines.
xo,
Michelle
Next Steps:
Grab Your Freebies:
https://churchfinances.ck.page/6steps    biz owners
https://churchfinances.ck.page/guide   everybody
Looking for a group of like-minded people that want to keep Jesus at the center of everything they do?
 
Join the BEST FaceBook group for church finances at https://www.facebook.com/groups/churchbookkeepingandclergytax
 
If you’re a church staff member or volunteer looking to serve your local church with excellence, check out my membership group The Bookkeepers Inner Circle @ www.bookkeepersInnerCircle.com
Need an extra hand with an immediate situation? Schedule a Consultation:
https://churchfinances.org/consult      

Ep 52 ~ Tips for Getting Your Tax Documents for a Smoother Tax Season

The IRS has announced the tax opening date for 2024.
In today's episode I share a list of documents you need to start gathering together to help make the tax prep process smoother for you and your tax preparer.
This week's Courageous Obedience Moment is to look for God and how His character is revealed in Scripture instead of reading the Bible with the intent of looking for what the Word has to say to you. Look for God!
xo,
Michelle
Next Steps:
Grab Your Freebies:
https://churchfinances.ck.page/6steps    biz owners
https://churchfinances.ck.page/guide   everybody
Looking for a group of like-minded people that want to keep Jesus at the center of everything they do?
 
Join the BEST FaceBook group for church finances at https://www.facebook.com/groups/churchbookkeepingandclergytax
 
If you’re a church staff member or volunteer looking to serve your local church with excellence, check out my membership group The Bookkeepers Inner Circle @ www.bookkeepersInnerCircle.com
Need an extra helping hand with an immediate situation? Schedule a Consultation:
https://churchfinances.org/consult     

Ep 51 ~ Record Retention Requirements for the Church

IRS blurb for your annual contribution statements
" Pursuant to Internal Revenue Code requirements for substantiation of charitable deductions, no goods or services were provided in return for the Tax Deductible contributions"
For QuickBooks Desktop:
" Unless otherwise noted, the only good or services provided are intangible religious benefits"
 
Records that should be retained for 5 years:
Offering Envelopes (unless you put a disclaimer advising members to request any necessary changes within a specified time period on the annual statement)
Annual contribution statements
Written acknowledgment of charitable contributions
Written verification of participation in short-term mission projects approved by the church
Substantiation of business related expenses that are a part of an Accountable Reimbursement Plan
Minister job descriptions and Housing designations
Copies of IRS forms (ex. 941, W-2's, 990-T, W-4's, 1099's)
Records to keep until Jesus comes back :-)
Any and all legal documents for the church (incl. Articles of Incorporation, Constitution & Bylaws, Tax exemption records)
Church Policies, Job descriptions, Compensation Package data, Accountable Reimbursement Plans & Safety Net Housing Allowance docs if you have one
Correspondence from the taxing authorities incl. IRS, State and local authorities (incl. Form 1023 application, SS-4 EIN number, Form 8274)
Courageous Obedience Moment:
From Calm Your Anxiety by Robert J. Morgan
"Equipping yourself with Scriptures will help your mind be trained to move from panic to peace, from worry to worship, and from anxiety to confident trust. Identify three scriptures that will help you make these movements. Recite them each day until you've memorized them."
Be blessed my friend.
xo,
Michelle
Next Steps:
Grab Your Freebies:
https://churchfinances.ck.page/6steps    biz owners
https://churchfinances.ck.page/guide   everybody
Looking for a group of like-minded people that want to keep Jesus at the center of everything they do?
You can join the BEST FaceBook group for churches at https://www.facebook.com/groups/churchbookkeepingandclergytax
If you’re a church staff member or volunteer looking to serve your local church with excellence, check out my membership group The Bookkeepers Inner Circle @ www.bookkeepersInnerCircle.com
Schedule a Consultation:
https://churchfinances.org/consult