Benefits Board Partners with ChurchEXCEL

The Church of God Benefits Board recently announced a new partnership with the Evangelical Council for Financial Accountability (ECFA) through ChurchEXCEL.  ChurchEXCEL is a FREE online resource portal that provides expert knowledge on church finances, policies, procedures, administration, and so much more!

At the Benefits Board, we understand how overwhelming and complex church financial management and administrative work can be.  We also understand the struggles and frustrations involved.  That is why we are excited to bring you this wealth of FREE information and materials to help you excel in ministry.  We have a heart to see our leaders thrive and hope to provide you with as much assistance as possible through ChurchEXCEL.

Many of the eBook resources are available in English, Spanish, and Korean.
To start taking advantage of this opportunity and all the FREE benefits ChurchEXCEL has to offer, visit ChurchEXCEL.org/BenefitsBoard.  You can also access the ChurchEXCEL site through the Church of God Benefits Board site, www.benefitsboard.com.

Posted in 11 - November 2018 | Leave a comment

Impact of Tax Reform Bill on Ministers and Churches

NOTE: Please see information below about new online calculators and W-4 Forms from the IRS. Also, join us at 2:00 pm ET on Thursday, March 8, 2018 for a one-hour live webinar on the Tax Reform legislation.

As we have discussed earlier, Congress ended 2017 by passing the largest tax bill in over 31 years. While some call this tax reform, most would say that it was just tax legislation in that the Tax Code remains as complicated as ever. On the positive side, the Benefits Board, with assistance from some of our Administrative Bishops and pastors across the country, was able to make substantial in-roads on protecting many of the tax provisions that dealt with our retirement plan and ministers in general.

Highlights of Tax Reform 

While this is very complicated legislation and contains provisions that will not be fully understood for months and maybe years to come, below is a list of just a few of the highlights of the bill that impact ministers and churches:

  • Outside of a few provisions, the bill only applies after January 1, 2018 (and therefore does not apply to tax returns that are filed in 2018)
  • There are seven tax brackets, ranging from 10%-37% (formerly 10%-39.6%)
  • Standard deduction (married filing jointly) increased from $12,700 to $24,000
  • Personal exemptions ($4,050 per person) were eliminated
  • Child tax credit was enhanced
  • State and local tax deduction limited to $10,000
  • Mortgage interest limited to houses valued below $750,000
  • Home equity interest is no longer deductible unless used for acquisition indebtedness
  • No miscellaneous itemized deductions allowed now which necessitates that ministers should have an accountable reimbursement plan to be able to take advantage of the tax savings
  • Qualified moving expenses paid by an employer is now taxable income – and moving expenses paid by an individual are no longer deductible. Further, there is no exclusion for overseas transitions
  • Section 529 plans can now include elementary and secondary education up to $10,000 per year.

Impact on Charitable Giving

There has been much discussion about the impact of the tax reform bill on charitable giving. Most of the discussion is speculation at this point. However, because the standard deduction has been increased so drastically, many former itemizers will no longer find it advantageous to itemize – and end-of-year giving will most likely drop off. Consider these statistics according to Charity Navigator:

  • 31% of annual giving to churches and non-profits occurs in December.
  • 12% of annual giving to churches and other non-profits occurs on the last three (3) days of the year

Some have emphasized that donors to churches give not to just get a tax break but out of a commitment to God and the church. While it is agreed that such is true during regular giving cycles, the end-of-the-year giving seems to be primarily dependent upon getting a charitable deduction.

Due to the potential drop off in giving at year-end because of the new tax bill, it is suggested that churches, state/regional offices, and other non-profits plan their annual budgets without the historical December “bump.” For many churches, giving in December increases some 50% over an average month. It would be wise not to plan for such an increase in coming years.

Tax Withholdings

Since the individual tax rates changed effective January 1, 2018, all withholding amounts for employees should be reviewed immediately. The Internal Revenue Service has issued several tools to help in this process:

  • Withholding Tables – on January 11, 2018, the IRS released Notice 1036 (https://www.irs.gov/pub/irs-pdf/n1036.pdf) that provides details on withholdings under the new tax tables.
  • Online Calculator – on February 28, 2018, the IRS released an on-line calculator to allow employers and employees to check withholding rates to make sure such is correct. You can access the “withholding calculator” at https://www.irs.gov/individuals/irs-withholding-calculator.
  • New W-4 – also on February 28, the IRS issued new W-4 withholding forms. Since the old W-4s were based upon personal exemptions that were eliminated by the new legislation, the new W-4s (found at https://www.irs.gov/pub/irs-pdf/fw4.pdf) should be used for all new employees and for change in status (marriage, new child, change in dependents, etc.) of current employees.

All church treasurers and pastors should pay close attention to the changes required by the new tax legislation. If not, such could result in either over-withholding or under-withholding of tax liability. Further, the Internal Revenue Service has given notice that they plan to make further changes involving withholdings over the coming months and even into 2019. Therefore, it is important that you stay aware of impending changes.

Posted in 03 - March 2018, 2018, Internal Revenue Service, Tax Information | Leave a comment

Potential Impact of Tax Reform on the Church & Ministers Webinar

In the Know LIVE Webinar

Thursday, March 8th
2:00 – 3:00 PM EST

Topic: Potential Impact of Tax Reform on the Church and Ministers

Join us on Thursday, March 8th at 2:00 pm EST for a free, one-hour, informational webinar hosted by the Church of God Benefits.  Led by Art Rhodes, President and CEO of the Benefits Board, the webinar will give an overview of the new Tax Reform legislation as it relates to ministers and churches.  The legislation is very complex, but we will highlight the greatest areas of concern for ministers as individual taxpayers, as well as the potential impact of the bill on charitable giving to churches.  A lot of information will be discussed during the presentation, including ways that you can potentially lower your tax liability.

Space is limited so reserve your spot today!

Simply click on the following link https://zoom.us/webinar/register/WN_IfRNzrX3T7C7Z3xmDtMSFQ and follow the instructions for registration.  Once registered, you will receive a confirmation email containing access information.  Any specific questions you would like addressed during the webinar can be sent to webinar@benefitsboard.com.

 For more information, please visit our website at www.benefitsboard.com.

Posted in 02 - February 02, Webinars | Leave a comment

Unconstitutional Housing Allowance Decision Appealed

On October 6, 2017, a federal district court judge in Wisconsin ruled that the ministerial housing allowance violates the Constitution. Judge Barbara Crabb held that Section 107(2) of the Tax Code, the provision that specifically addresses the “cash” ministerial housing allowance, violates the Establishment Clause of the First Amendment, simply because it does not have a secular purpose or effect, and because it singles out “ministers of the Gospel” for special tax treatment not available to others.

The ruling only deals with the housing allowance where ministers are provided cash to rent or purchase a home, and leaves fully intact, at least for now, the tax-free use of parsonages.

Although Judge Crabb ruled that the ministerial housing allowance was unconstitutional, she did not immediately implement a ruling as to what was supposed to happen next. In a follow-up order dated December 13, 2017, Judge Crabb issued an injunction that prohibits the government from enforcing Section 107(2) of the Tax Code. Simply stated, the injunction prohibits the Internal Revenue Service from allowing ministers to claim the housing allowance as an exclusion from income. However, as expected, the judge “stayed” the injunction until “180 days after the conclusion of any appeals.” Therefore, if the decision is upheld on appeal, the order mandates that the injunction will become effective 180 days after the appeal process is completed in order to allow an orderly transition. The judge noted that “the additional time will allow Congress, the IRS and affected individuals and organizations to adjust to the substantial change.”

On February 8, 2018, the unconstitutional determination was appealed to the Seventh Circuit Court of Appeals in Chicago, continuing a legal battle that ultimately could end up before the U. S. Supreme Court. At the appropriate time in the appeals process, it is expected that the Church of God International Offices and the Church of God Benefits Board will file a “friend of the court” brief in support of maintaining the housing allowance for both active and retired ministers.

Since the injunction has been stayed, and until a final decision has been entered, churches should continue to follow normal procedures in setting a housing allowance for their ministers.

Posted in 02 - February 02, 2018, Ministerial Housing Allowance | Leave a comment

Remember New Filing Date for W-2s and 1099s

Although we are only a few weeks into the new year, church treasurers hopefully have already given W-2s to employees, Form 1099s to independent contractors, and charitable receipts to all that contributed more than $250 at any one time to the church over the past year. All of these tasks are critically important and should be accomplished immediately.

With a change in the law (Public Law 114-113), it is now more important than ever that these tasks be completed as quickly as possible. Historically, an employer/church has been required to provide its employees with a W-2 prior to January 31 – and to provide a 1099 by January 31 to independent contractors who cumulatively received more than $600 over the course of the year. These provisions and requirements have not changed.

However, previously a copy of the employer’s W-2s and 1099s did not have to be sent to the Social Security Administration and Internal Revenue Service until later. If you were sending paper copies, they had to be sent by the end of February and if you were filing them electronically, you had until the end of March to transmit those forms. This delay allowed employers to correct W-2s and 1099s before they were filed with the government.

Under the change in the law, these forms now must be transmitted to the Social Security Administration (W-2s) and to the Internal Revenue Service (1099s) by the end of January. Therefore, all W-2s and Form 1099s must be forwarded to the individuals AND to the appropriate governmental agency by no later than January 31.

Because of this change, it is recommended that you get the W-2s and 1099s out to the individuals as early as possible so that changes, if necessary, can be made prior to the mandatory filing date of January 31.

Further, church treasurers should consider using the government’s electronic filing system (https://www.ssa.gov/employer/) to complete both their W-2s and W-3. After a simple registration process, W-2s can be completed, printed, and then filed electronically.

Just remember that if you wait to file your W-2s and 1099s with the government in February or March, you will be late. The new deadline is January 31.

Posted in 01 - January 2018, Internal Revenue Service, Tax Information | Leave a comment

Impact of Tax Reform Bill on Ministers and Churches

Congress ended 2017 by passing the largest tax bill in over 31 years. While many call this tax reform, in reality it was just tax legislation. On the positive side, the Benefits Board, with assistance from some of our Administrative Bishops and pastors across the country, was able to make substantial in-roads on protecting many of the tax provisions that dealt with our retirement plan and ministers in general.

Highlights of Tax Reform

While this is very complicated legislation and contains provisions that will not be fully understood for months and maybe years to come below is a list of just a few of the highlights of the bill that impact ministers and churches:

  • Outside of a few provisions, the bill only applies after January 1, 2018
  • There are seven tax brackets, ranging from 10%-37% (formerly 10-39.6%)
  • Standard deduction (married filing jointly) increased from $12,700 to $24,000
  • Personal exemptions ($4,050 per person) were eliminated
  • Child tax credit was enhanced
  • State and local tax deduction limited to $10,000
  • Mortgage interest limited to houses valued below $750,000
  • Home equity interest is no longer deductible
  • No miscellaneous itemized deductions allowed
  • Qualified moving expenses paid by employer is now taxable income – and there is no exclusion for overseas transitions
  • Section 529 plans can now include elementary and secondary education

Impact on Charitable Giving

There has been much discussion about the impact of the tax reform bill on charitable giving. Most of the discussion is speculation at this point. However, because the standard deduction has been increased so drastically, many former itemizers will no longer find it advantageous to itemize – and end-of-year giving will most likely drop off. Consider these statistics from Charity Navigator:

31% of annual giving to churches and non-profits occurs in December.
12% of annual giving to churches and other non-profits occurs on the last three (3) days of the year

Some have emphasized that donors to churches give not to just get a tax break but out of a commitment to God and the church. While it is agreed that such is true during regular giving cycles, the end-of-the-year giving seems to be primarily dependent upon getting a charitable deduction.

Due to the potential drop off in giving at year-end because of the new tax bill, it is suggested that churches, state/regional offices, and other non-profits plan their annual budgets without the historical December “bump.” For many churches, giving in December increases some 50% over an average month. It would be wise not to plan for such an increase in coming years.

Tax Withholdings

With the individual tax rate changes, all withholding amounts for employees should be reviewed. On January 11, 2018, the IRS released Notice 1036 (https://www.irs.gov/pub/irs-pdf/n1036.pdf) that detailed withholdings under the new tax tables. In addition, by mid-February an on-line calculator is supposed to be available to allow employers and employees to check withholding rates to make sure such is sufficient. Although W-4 withholding forms are based upon personal exemptions that were eliminated by this new legislation, the IRS is recommending that the old W-4s be used until such time as new W-4s are available later this year.

All church treasurers and pastors should pay close attention to the changes required by the new tax legislation. If not, such could result in either over-withholding or under-withholding of tax liability.

Posted in 01 - January 2018, Internal Revenue Service, Tax Information, Uncategorized | Leave a comment

Board Manuals Updated for 2018

With each New Year comes new rules and regulations and new contribution limits. Therefore, all the Benefits Board’s free educational manuals have been updated to take into consideration all relevant changes for 2018. From the Board’s web site, you can access the latest version of each of the manuals. The topics addressed are as follows:

  • Church Construction and Financing Manual
  • Ministers’ Retirement Plan Document Summary
  • Church Treasurer’s Manual
  • Minister’s Compensation Manual
  • Church Budgeting Manual
  • Tax Information Manual
  • The Church as a Taxpayer Manual
  • Church Loan Fund Policy Manual

Each manual, ranging in length from 25 to 75 pages, is available without cost on the Board’s web site. The manuals may be used by the local church and church officials to address the everyday issues that face most churches. Please forward any questions or comments about the manuals to info@benefitsboard.com.

Posted in 01 - January 2018, 2018, Uncategorized | Leave a comment