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November 1, 2012

A Key Tax Reminder for Donors

Key reminders you can deliver through the church bulletin.

As the calendar flips to November, it's a good reminder of the many tax details that churches must track, especially on behalf of those who faithfully give to the church throughout the year. Churches must properly document donor contributions, which includes a statement on receipts regarding whether any goods or services were provided in consideration for the contributions.

To avoid jeopardizing the tax deductibility of charitable contributions, churches also should advise donors at the end of 2012 not to file their 2012 income tax returns until they have received a written acknowledgement of their contributions from the church. This communication should be in writing. To illustrate, the following statement could be placed in the church bulletin or newsletter during the last few weeks of 2012, or included in a letter to all donors:

IMPORTANT NOTICE: To ensure the deductibility of your church contributions, do not file your 2012 income tax return until you have received a written acknowledgment of your contributions from the church. Some of your contributions may not be tax-deductible if you file your tax return before receiving a written acknowledgement of your contributions from the church.

Keep your congregation informed about the rules for substantiating charitable contributions by ordering the 2013 Charitable Contributions Bulletin Inserts by Richard Hammar. The insert is designed as a one-page summary explaining the rules of most importance to church members and can fit easily in church bulletins, newsletters, or contribution statements. The inserts are available in quantities of 100 or can be purchased for electronic download. Call 1-800-222-1840 or visit YourChurchResources.com to order.

Richard R. Hammar is an attorney, CPA, and author specializing in legal and tax issues for churches and clergy. He is a graduate of Harvard Law School, and attended Harvard Divinity School. He is the author of several books, including Pastor, Church & Law, the annual Church and Clergy Tax Guide, Reducing the Risk, the biannual Compensation Handbook for Church Staff, and the Essential Guide to Copyright Law for Churches. He is also senior editor of the Church Law & Tax Report and Church Finance Today newsletters. For more information, visit YourChurchResources.com.

Related Tags: finances, giving, pastors, Richard Hammar, staff, tax, tithes, treasurers, worship

Comments

This is something like what I was talking about for the concgration I will order when I return to the office

I will order next week

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