The holidays are just around the corner—and unfortunately, the rush of the season can shift the focus away from essential tasks that need to be accomplished before the New Year.
This year, don’t be caught off guard when the end of December rolls around. Instead, jump into this season with a task list in hand. To start, these three guidelines can help you:
- Set clergy housing allowances. If your church gives a housing allowance, it’s important to designate the amount annually. As the year wraps up, be sure to compare actual housing expenses to what you’ve designated to be sure you're setting the correct amount. If your minister’s expenses exceed what was designated, they may not be eligible to receive the full tax benefit. You can always amend your church’s housing allowance or even add one if you haven’t yet, but the housing allowance designation can't be made retroactively. For more help with parsonages and housing allowances, check out Chapter 6 of the annual Church & Clergy Tax Guide.
- Thank your staff for all they've done this year. Make sure your staff feels appreciated for all the work they’ve done this year. Show your appreciation by giving Christmas gifts and throwing a staff Christmas party. "Be sure to handle correctly any Christmas gifts made by the church or congregation to a minister or lay staff member," writes Richard Hammar. "In most cases these transfers represent taxable income and not a tax-free gift, and must be reported as income on the recipient’s W-2 form."
- Take time to reflect on the “reason for the season.” With so much to get done at this time of year, it’s easy to only think about the tasks in front of you—which means stopping and taking time to remember why you do what you do is even more important.
This is only the beginning of a year-end checklist. On November 6, Richard R. Hammar joined Church Law & Tax for an Advantage member-exclusive webinar. During the webinar, he shared his expert advice on important year-end tasks that should be on every church's checklist. Become an Advantage member and receive access to exclusive webinars like this and so much more.