Skip to main content

Online Payroll Services for Churches

By
Question:

Can you recommend an online payroll processing service for churches?

Answer:

We are not aware of any services that specifically target churches at this time. Existing services such as Paychecks, ADP, and Intuit's Paycycle are not always familiar with the unique characteristics of ministerial vs. non-ministerial compensation. MinistryCPA does not offer an online payroll processing service. However, we have been able to assist multiple churches to process their own payrolls. This last year, MinistryCPA aided 26 churches in preparing quarterly and annual payroll reports in cooperation with the work of their own personnel.

Ministries interested in a personal consultation should post a blog inquiry with suggested time(s) that will be best to call at a phone number they should provide. Also, they typically provide a website address for the organization, if available. The ministry's website may help us to understand the nature of the organization and whether we might be qualified to serve it.

We respond with a suggested phone appointment time, cost information, and disclosures that we as CPAs are required to make when we provide consultation services.

Labels:

Comments

  1. UnknownJune 11, 2013 at 10:37 AM

    Great post, Corey!

    What exactly does a church need to have specifically that a normal or online payroll service doesn't specifically provide?

    I'm asking because we are in Arkansas and have made our payroll program accommodate farmers with multiple sources of income. We want to provide a great service to all businesses, and this post really got my gears turning about how different businesses can benefit from a customized payroll system.

    An example might be that you need to Geo-locate your workers when they clock in from their cell phones if they are doing missionary or other ministry work in another city or even overseas. This feature was originally made for construction contractors to keep track of their subordinates.

    I'm extremely interested in hearing what churches may need to have a customized payroll solution that will help their business! Please email me at greg@tcoa.net or just comment on my post, as I am following it and your blog from now on! Keep up the great posts.

    ReplyDelete
  2. Corey PfaffeJune 25, 2013 at 6:18 PM

    An online service must be prepared to respond to unique ministerial provisions, for example: housing allowance designations and Form W-2 disclosures.

    ReplyDelete

Post a Comment

Popular posts from this blog

Church Car Purchase for Pastor

By
Question: A church would like to purchase a car for the pastor's use. What is the best method to accomplish this goal? Should the car be titled in the pastor's name? What will be the tax consequences of this arrangement? Answer: The church has two main alternatives for this purchase:  Title the car in the pastor's name and reimburse him for business expenses Title it in the church's name and treat personal use as taxable compensation There are fewer immediate tax consequences for the latter. Since both are viable options, we will discuss both situations in this post. If the church chooses to give the car to the pastor and register it in his name, he is free to use it for whatever personal use he desires with no tax consequences. However, the fair value of the car is taxable as compensation at the time it is given to the pastor. Internal Revenue Code section 102(c) clearly states that gifts given to employees by their employers are taxable compensation. The...
2 comments
Read more

Rental of a Church Parsonage to a Non-Minister

By
Question: A church owns a parsonage, but the pastor does not use it as he owns his own home. The church rents the parsonage to a tenant other than a minister or employee of the church. Will the church be responsible for paying income tax on these monies as Unrelated Business Income (filing a Form 990-T) even if the money is used to carry on the business of the church? Answer: Whether the money is used for church purposes is irrelevant.  IRS Publication 598  states: "If an exempt organization regularly carries on a trade or business not substantially related to its exempt purpose, except that it provides funds to carry out that purpose, the organization is subject to tax on its income from that unrelated trade or business." Fortunately, in the case of rental income from real property, such income is "excluded in computing unrelated business taxable income" (Publication 598). Caution: see content below regarding debt-financed property.  However, a second concern not a...
Post a Comment
Read more

Can Form 4361 be filed after the deadline?

By
Question:   Is it possible to opt out of Social Security after the 2-year deadline? Answer:  Unlike other employees, a licensed or ordained minister has the option to opt out of Social Security and Medicare (FICA). If a minister wants to opt out they must file Form 4361 by the tax deadline including extension, in the second year in which they have received ministerial income of $400 or more. This election is final, and the minister cannot opt back into FICA taxes.  At MinistryCPA, we have received questions from ministers who have exceeded the two year deadline and desire to opt-out. There have been several court cases which provide guidance in answering this question. Some have argued that the minister was unaware of the deadline, had mistakenly believed they had filed a timely election, were given incorrect advice by an IRS employee, or their opposition to participate in Social Security and Medicare did not arise until after the 2-year deadline had passed. In each of th...
Post a Comment
Read more