***GOOD NEWS-Ministerial Exemption From Social Security
One common misconception regarding ministerial taxation regards the exemption from social
security, which may be obtained by the minister by filing during the one year period following
ordination. This exemption does not apply to non-ministerial compensation or wages, therefore, a
minister might be exempt with respect to ministerial compensation, but not exempt with respect to
other wages. In any event, claiming exemption does not prevent a minister from receiving social
security benefits on wages previously earned where social security taxes were withheld.
***CHURCH TAX TIP-Year End Reporting Requirements For Donations-IMPORTANT!
Charitable organizations must issue receipts to their donors. Failure to do so renders the related
donation non-deductible. The receipt needs to make a statement on it's face as to whether goods and
services were received in exchange for the donation. A good faith estimate of value of the goods given
in exchange for the donation needs to be made by the charity if such goods are transferred to the
Non-Church charities that register annually with the State of Florida are also required to place the
following words on these receipts in capital letters: "A COPY OF THE OFFICIAL REGISTRATION
AND FINANCIAL INFORMATION MAY BE OBTAINED FROM THE DIVISION OF
CONSUMER SERVICES BY CALLING TOLL-FREE WITHIN THE STATE. REGISTRATION
DOES NOT IMPLY ENDORSEMENT, APPROVAL, OR RECOMMENDATION BY THE STATE."
***CHURCH LEGAL TIP-Florida Reporting Requirements For Non-Religious Charities.
Christian ministries who form a non-church charity to operate a social services ministry are
sometimes surprised to find that there is an annual reporting requirement to the State of Florida. The
registration involves completion of a form, submission of a fee and the forwarding of the
organization's 501 c 3 approval letter, articles of incorporation, financial information and budgets.
***HOLD THAT BOARD OF DIRECTOR'S MEETING
Almost all of you are organized as Florida Corporations. You should hold a minimum of one
director's meeting per year. If you have not held it yet this year, you should seriously consider
holding the meeting. Tape record the meeting and send the recording to me if you want
me to do the minutes for you. At the meeting, you should set such things as key salaries,
pastor's housing allowance and other compensation items FOR THE COMING YEAR. If you
have not yet set these items in the minutes for the current year, mention that it was already
done at a previous meeting. In my opinion, any compensation package in a church or
ministry that exceeds $50,000 per year should have a review done with a comparison made
to salaries that are paid to similar people by similar ministries. This information is available
from Christian Ministry Resources in the form of a compensation guide. This consideration
should be in the meeting minutes as well. Any changes to your corporate board's should be
handled at the meeting as well.
Year end is a good time to look at what you are doing and how the ministry has grown. It is
a good time to ask ourselves some hard questions.
Are you taking salary now? You need to get that reported on a form W-2.
Remember that the ministry needs to keep accurate accounting records, even if it is so small that it is not required
to file a form 990ez.
If you are operating a church, and are operating without a 501c3 letter,
are your articles of incorporation set up right?
Do you have bylaws that provide for terms of
office, ordination and other matters?
Are you handling all the transactions that affect you
personally in a proper manner so that you will be in no future trouble because of private
Do you have policies in place for reviewing and checking the backgrounds of
those who work with children?
Do you ask those who want to work with children if they have
ever been convicted or arrested for any offense related to child abuse or pedophilia?
have a waiting period for those who want to work with children?
you considered liability insurance for the ministry?
Do you have two or three people counting the offering?
Is the offering count being reconciled
to the bank deposit?
Have you provided anything toward the pastor's retirement, with
consideration of a 403B plan in particular?
Have you set up an accountable reimbursement
plan for the church or ministry so that all personally incurred ministry expenses are reimbursed
to the pastor or minister by the church or ministry?
Are you getting a signed W-9 and keeping
them on file when you pay visiting ministers?
Are you getting a signed W-8 and keeping it
on file if the visiting minister is from overseas?
Do you have a form for use by recipients of
benevolence and do you keep the completed forms in well organized files?
If you have questions about any of these things, please feel free to give me a call.
Stephen L. Bening
a servant and prophet of our Lord Jesus Christ
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