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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Wednesday, February 21, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

  • BARBRI is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

$197.00
CPE
ALL

This course will explain the unique aspects of tax return preparation and planning for members of the clergy. Our panel will cover the treatment of earnings by ministerial employees, including employment by a congregation, retirement income, Social Security, gifts, and housing allowances.

Faculty

Sandra Fowler
Payroll Services Manager
Sommerville & Associates, PC

Ms. Fowler joined the firm in August of 2002. Sandra holds a Bachelor of Science in Business from Southwestern Assemblies of God University and Masters of Science in Accounting from the University of Texas at Arlington. In 2008, she achieved the status as a certified public accountant. In 2020, Ms. Fowler became a Certified Payroll Professional with the American Payroll Association. Ms. Fowler is a member of the Texas Society of CPAs and has spoken at several conferences on tax and compliance issues including the Co-op Ministry Conference, The Church Network conference, and the Shelby Systems Annual conference. She is also a member of PayrollOrg and the Board of Contributing Writers for the organization's magazine, Paytech.

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Elaine Sommerville
Shareholder
Sommerville & Associates, PC

Ms. Sommerville is licensed as a certified public accountant by the State of Texas. She has worked in public accounting since 1985. Ms. Sommerville's practice has and continues to be centered primarily on the tax compliance aspects of nonprofit organizations and churches. She has assisted in the representation of several large case IRS exams as well as other IRS examinations of smaller organizations. Ms. Sommerville devotes her time to handling various IRS issues for individuals and for exempt organizations of various types. She actively consults on many IRS compliance issues for churches and other nonprofit organizations and prepares information returns of all types for tax exempt organizations.

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Description

Working with ministers in the area of federal taxation encompasses several unique aspects including housing Allowances, correct wage reporting on Form W-2, utilizing unique retirement options, properly taxing gifts, and understanding their unique treatment for Social Security.

Housing/Parsonage Allowance: Blessed by the Seventh Circuit, clergy continue to benefit from a housing allowance that allows the exclusion of housing related expenses from income tax. When properly designated, a clergy member pays no income tax on his/her housing allowance (within certain limits). Housing allowance, however, is reportable and taxable for self-employment tax. In some circumstances, even retired clergy can qualify for a housing allowance.

Security Participation: In limited circumstances, ministers can elect out of Social Security. All clergy, even those not electing out, are considered self-employed to pay into the Social Security system. No Social Security is withheld and matched on clergy pay, even for those receiving a Form W-2.

Earnings for Independent Ministry: Clergy regularly receive honorariums or fees for providing additional services, including weddings, funerals, baptisms, and other speaking engagements. Compensation from these types of self-employment activities is reportable on a minister’s Schedule C. Computing net SE income can be the most challenging aspect of ministerial returns. Clergy may also receive “gifts” from outside sources or congregation members that need to be considered. These create circumstances where additional income is reported and related expenses are deducted.

Listen as our panel explains the many facets of clergy taxation, including properly designating and reporting housing allowances, determining worker classification for employee or contractor treatment purposes, deducting expenses, and differentiating non-taxable gifts from taxable income.

Outline

  1. Who is a minister?
  2. W-2 or independent contractor
  3. Housing allowance
  4. Forms of income including gifts and honorariums
  5. Fringe benefits
  6. Retirement considerations

Benefits

The panel will review these and other notable issues:

  • Who is a minister for tax purposes?
  • How does the housing allowance work and what are eligible housing costs for clergy?
  • What income or benefits are taxable to ministerial employees?
  • Why do clergy pay self-employment tax?
  • What happens with gifts and other income received by clergy?
  • How to properly prepare a clergy employee’s Form W-2?
  • How can retirement best be provided to clergy?

NASBA Details

 

Learning Objectives

After completing this course, you will be able to:

  • Determine who is a minister for IRS tax purposes
  • Recognize deductible housing costs for clergy and limitations
  • Establish whether income and/or benefits are taxable to a minister or ministerial employee
  • Discern the differences between various health reimbursement arrangements and other types of health reimbursement or medical spending accounts
  • Identify the options a member of the clergy has in choosing a retirement plan(s)

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite:

    Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Specific knowledge and understanding of cost allocation principles; familiarity with government standards for nonprofit organizations receiving federal grant monies

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).