FCA - Taxes on Showing Appreciation

Published: Tue, 09/13/22

FreeChurchAccounting.com

Accounting for Churches and Nonprofits

Sept 2022 Edition

Gifts for Appreciation and the Holidays!

I am so ready for this summer to end! Excited for Fall!

Since next month is Pastor Appreciation month and the next 2 months are when a lot of employers hand out bonuses and Christmas gifts... I thought it was a good time to remind you on the tax consequences of those "gifts".

First of all, let me stress the importance of processing those employee gifts and bonuses through your payroll as those gift cards and cash payments are usually considered taxable income and MUST be reported in Box 1 of their W-2s! The gifts to non-ministers are also subject to payroll taxes.

Your accountant or bookkeeper will be upset and may charge you additional fees if they have to manually enter it "after the fact" and "gross it up" to cover the payroll taxes.

One more point I need to stress is that appreciation gifts and offerings and love offerings ARE considered taxable income by the IRS and should be treated accordingly.

See additional instructions on how to handle gifts for staff and volunteers ...

Save 15% on Accounting Packages! Use discount code: 15OFF

Valid Through 10-9-22

Offer good for the Church Accounting Package and Spreadsheet Package or a Combination of Both Packages.

(link to Combo Package in the middle of each page)

QB Online Courses!

There are TONS of videos available on the web for using QuickBooks BUT not very many "accurate" videos on using QB for churches...especially with QBO! See more on using QuickBooks for Churches and Nonprofits!

The secret to making QuickBooks work efficiently and "easier" for churches is setting up the desktop or online version properly to track designated funds. (Despite what you hear on the web...you can use QBO to track funds and Lisa can show you how!)

The price of the 3 course bundle ...which is what I recommend you purchase ...is comparable to a 3 day training session, BUT unlike a seminar in which you forget half of what you were taught after you get home...you get a lifetime access to your training courses. You can watch them on your tablet or phone while working in your QuickBooks at a time that is convenient to you.

Even if you already know quite a bit about QuickBook, you will find the "Advanced Topics" and "Common Mistakes" courses very valuable as they cover topics you don't see every day and may need a quick refresher on.

As a Free Church Accounting reader, you can use the discount code "FCA" for a 10 percent discount!

See more details on the "Accountant Beside You" website...

Pastor Appreciation Ideas

Next month (October) is a month many churches set aside time to honor their Pastors for their hard work, sacrificial dedication and multiple blessings provided by these special people.

See this site for some pastor appreciation ideas and free resources...

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