Every January, I start working on 1099s for my clients and when I ask them for W-9s for individuals paid $600 or more collectively in the prior year and some of those individuals are volunteers ... I get the following response:
"but those amounts were appreciation gifts or love offerings for our volunteers that worked so hard for the church/nonprofit organization!"
The key word there is "worked". Sadly, the IRS classifies those types of "gifts" taxable income for the recipient as they consider them "payment for services rendered".
If you are debating whether or not to issue 1099s for those types of gifts...please consider that the penalty for not filing a 1099 when it was required...is quite steep.
January is crazy busy for nonprofit and church administrators!
Besides getting your accounting system closed for the quarter/year or even setting up a new accounting software for the next year, there are W-2s, 1099s, etc. to prepare and send. Estimated tax payments are also due for many ministers.
See the due dates for IRS forms plus important reminders for churches ...
Lisa and I have added additional and new material in areas that I seen errors happening frequently such as which payroll reporting forms NOT to include a minister's housing allowance payments and which ones to include it and where it should be reported on the form. Another "inquiry" I was contacted quite often this past year was regarding how to acknowledge and record a stock donation which we address in the the "revised" edition!
So, besides learning how to keep the books and stay out of trouble with the IRS, we added and expanded on the following:
How to keep the money safe and catch mistakes.
Acknowledge all types of donations (cash, stock, vehicles, in-kind, and more).
Properly handle a benevolence fund.
Calculate and file payroll including how to fill out the new 2020 forms
Structure pastor payroll and housing allowances
Unrelated Business Income Tax (UBIT) is and how to file if you owe it
How to fill out the 990N and 990EZ,
And so much more.
Read more on this "must have" book and how you can save 10% by using the discount code "FCA" by clicking the link below!
*Note: I am an Aplos partner and will receive a small referral fee should you decide to use Aplos, but I have used it for my own church and clients for over 8 years now! See my review on this software.
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