All posts from “December 2011”

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December 29, 2011

Year End Giving

These tax rules determine if contributions should apply to 2011 or 2012.

December often brings more contributions to churches than any other month. Be prepared to handle year end contributions accurately by listening to Richard Hammar describe a number of important rules that apply to year end giving in the video below:



To learn more about how tax laws apply to your church, read Richard Hammar's 2012 Church & Clergy Tax Guide.

December 27, 2011

Payroll Tax Cut Temporarily Extended into 2012

After weeks of debate, Congress has finally resolved the question of whether or not to extend the payroll tax holiday that was enacted in 2011. From now until at least February 29, 2012, nearly 160 million workers will benefit from the Temporary Payroll Tax Cut Continuation Act of 2011 temporarily, which extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. This reduced Social Security withholding will have no effect on employees’ future Social Security benefits.

Employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2012.

Read more

December 27, 2011

The Importance of Financial Transparency

Creating more accountability for your church operations.

Vonna Laue, a partner with Capin Crouse and an Editorial Adviser for Christianity Today's Church Management Team, discusses why financial transparency creates a more trustworthy financial department for your church.

Watch the two-minute video below:

The management of church money is a complex task for any church finance manager, treasurer, business administrator, bookkeeper, or pastor. The Essential Guide to Church Finances will help you strategize, organize, measure, communicate, protect and audit the financials of your ministry—available at YourChurchResources.com.

December 22, 2011

Top 10 Year-End Fiscal Tasks

Simple things every church can do to end the year well

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If your fiscal year-end is December 31, you have to complete all the necessary steps for closing the fiscal year while also preparing W-2s, 1099s, and donor giving statements. With a little planning though, you can avoid long hours and frustrated staff, no matter when your fiscal year ends. Here are the top 10 things you can do to make the end of the year easier:

Continue reading Top 10 Year-End Fiscal Tasks...

December 22, 2011

December Tax Tip: Note New Withholdings for 2012

New tables available from the IRS.

Beginning on January 1, churches having nonminister employees (or a minister who has elected voluntary withholding) should begin withholding federal income taxes according to the new tables and instructions contained in the 2012 edition of IRS Publication 15 (Circular E). You can order a copy by calling the IRS at 1-800-829-3676, or you can download a copy from the IRS website (http://irs.gov).

December 15, 2011

December Tax Tip: Plan Now to Reclassify an Employee

Changing a minister to 'employee' status should happen January 1.

If you have a minister or lay worker who is treated as self-employed for federal income tax reporting purposes, but who you would like to reclassify as an employee, the ideal time to make the change is on January 1 of the new year.

December 13, 2011

The Top 10 Church Management Articles of 2011

Church leaders followed these stories most this year on ManagingYourChurch.com.

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I’ve said it before, and I’ll say it again: I’m a sucker for lists. And the end of a calendar year always brings opportunities to reflect on the top stories and headlines from the year that was.

So it’s only natural to share the top ten articles for ManagingYourChurch.com in 2011 based on unique page views. Each post is highlighted below, starting with the tenth-most uniquely viewed post and building up to the first-most. Each highlight also includes the post’s title, author, and date, as well as a brief description and, if available, a notable reader comment.

See what caught the interest of church leaders nationwide, and feel free to weigh in with your thoughts on these legal, financial, and management topics:

10. The Pluses of Google+ for Church Leaders by Margaret Feinberg (July 18, 2011)

Social media tools continued to proliferate in 2011, and no new addition created a larger stir than the summer unveiling of Google+. Many early adopters viewed Google+ as the first legitimate threat to Facebook’s status as the social networking site of choice for the masses. Christian author Margaret Feinberg dove in to Google+ immediately and shared her initial thoughts about how it works, and the way its features may be useful for churches.

Notable reader comment: “I definitely see the strengths of G+'s Circles. Love the idea of Hangout, etc all being built in. My concern is that FB would only need to make a few changes to do the same thing. And so far, my Incoming on G+ is DEAD. Very little updating going on.” —Richie Allen

9. A Pastor’s Thoughts on Knowing What People Give by Larry Osborne (May 3, 2011)

In this guest post, Pastor Larry Osborne shares about a situation that changed his thinking about whether a pastor should know what people give to the church.

Notable reader comment: “To me, what was done with the information presents a better arguemtn for why pastors don't need to know than why they do need to know.” —John

8. The Church Bulletin as a Tax Tool by Richard R. Hammar (November 1, 2011)

How churches can use their bulletins at the end of the year to provide timely, helpful year-end tax reminders and guidance to givers.

Notable reader comment: None.

Continue reading The Top 10 Church Management Articles of 2011...

December 12, 2011

IRS Announces Recommended Mileage Rates for 2012

What church leaders should note heading into the new year.

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On Saturday, the Internal Revenue Service announced its recommended optional standard business mileage rates for 2012. These recommendations are ones "employees, self-employed individuals, and other taxpayers can use to compute deductible costs of operating automobiles (including vans, pickups and panel trucks) for business, medical, moving and charitable purposes," the IRS says.

Many church treasurers also use these recommended rates to reimburse business miles logged by pastors, staff members, and volunteers for the use of their personal vehicles to drive hundreds of miles each month for visitations, home visits, retreats, community meetings, and conferences, among other things.

Beginning January 1, 2012, the IRS says the 2012 standard mileage rate remains at 55.5 cents per mile for business uses, is reduced to 23 cents per mile for medical and moving uses, and remains at 14 cents per mile for charitable uses.

Moving forward, it's important for church treasurers to periodically check for updates on the rates from the IRS. For instance, in June, the IRS increased the standard mileage rate from 51 cents per mile to 55.5 cents per mile for the second half of 2011 to address increased gas prices around the country.

In the February 2012 edition of Church Finance Today, Richard Hammar sheds more light on mileage rates, including a more expansive review of the best practices regarding reimbursements for vehicle uses by church staff.

December 8, 2011

December Tax Tip: 2012 Pension Plan Limits

New cost-of-living adjustments apply next year.

The IRS has announced cost-of-living adjustments applicable to dollar limitations for pension plans and other items for 2012. These include the following:

  1. The limitation for defined contribution plans is $50,000.
  2. The exclusion for elective deferrals is $17,000.
  3. The limitation used in the definition of highly compensated employees is $115,000.
  4. The dollar limitation for catch-up contributions to an applicable employer plan for individuals aged 50 or over remains unchanged at $5,500.

For more help with 2011 tax filings and 2012 tax questions, check out the 2012 Church & Clergy Tax Guide.

December 6, 2011

Handling Online Activities with Care

Tips every church office should post for email and Internet use.

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Every year, more organizations and people fall victim to cybercrime. Last year, more than 300,000 reported cybercrimes to the FBI with losses in the hundreds of millions of dollars. Whether it’s simple theft, fraud, or identity theft, this is a significant area of opportunity for criminals. Let’s shed some light on how to protect your church office and those you know from cybercrime.

Where There’s Opportunity …

A new level of crime became possible with the popularity of the Internet on a scale never before imagined! Criminals saw the opportunity to repackage old scams into electronic format and reach the masses in a way that could yield astounding results. That criminal vision has become a painful reality to many naïve victims.

Continue reading Handling Online Activities with Care...

December 1, 2011

December Tax Tip: Update Staff W-4s Now

New laws, life changes have likely affected many.

December is a good time to check with all nonminister church employees to see if they need to file a new W-4 form with the church. The W-4 form is used by employees to report withholding allowances. This information will determine how much income tax the church withholds from the wages of a nonminister employee. The important point is this--W-4 forms often become obsolete because of changes in an employee's circumstances, but the employee fails to submit a new form to the church. This can result in withholding that is significantly above or below the actual tax liability.

There are many reasons why an employee's W-4 may be inaccurate, including the birth of a child, a pay raise, or significant medical expenses. These same considerations apply to ministers who have elected voluntary withholding of their taxes.

Additional Tip: The tax cuts passed by Congress in recent years have reduced taxes for most Americans, and this is another reason why some church employees will want to submit a new W-4 form.