Now that we made it through January with all of its deadlines for filing 1099-NECs and W-2s, I want to discuss a reoccurring issue I saw this last month that concerned me.
Most of you know that the government "tighten" what you can now claim as an independent contractor. This "tighten" classification affects non-profits, churches, and for-profits alike.
Plumbers, electricians,
landscapers, guest speakers are all usually easy to classify as "independent contractors". Where I saw issues was in paying nursery workers, janitors, musicians, office workers, etc.
The simple rule to follow now is...if they use your equipment and/or supplies and you "control"
their hours (this could simply be telling them to clean "anytime" before the Sunday service) or behavior ...they should be considered employees...especially if they "work" regularly for your org and do not do similar "work" for other businesses.
For example, I do bookkeeping and payroll for a
lot of churches and nonprofits, but I use my own equipment, set my own hours and am not under their "control", so I am an independent contractor to each of them.
However, if you have someone doing those tasks and they do not work for any other business doing similar work...they are usually
employees. Even if they set their own hours and use their own computers ... they are still under the church's "control" and MUST be classified as employees.
This is true for all organizations and businesses.
Why am I "harping" on this now? Because the first quarter of the year is the best time to "classify" and pay them correctly =)
Read more on how to properly classify your workers and the dangers of misclassifying them...
See the church accounting blog below for questions, answers, and tips from church AND nonprofit staff…
Church Accounting "How To" Guide
Even if you have prior accounting knowledge and experience, "helping out" or "taking over" with a church's finances and payroll is overwhelming!
Knowing personally that "overwhelmed ... but wanting to do your best" feeling, Lisa London and I wrote a "How to" guide for churches. We pulled on our own experience as church treasurers and what we wished someone would have told us in the beginning... especially when it comes to a payroll for a church =)
You can purchase this book directly here: The How-To Guide for Small & Growing Churches
OR find out more about the book by clicking the "Read More" below...
