MinistryCPA - Corey A. Pfaffe, CPA, LLC

Question: Our church would like to set in place an accountable minister's expense reimbursement plan to reimburse our pastor for any professional expenses he incurs. What needs to be done establish an accountable plan? Answer: Under accountable plans, eligible ministry expenses reimbursed to employees are not taxable as income. To establish an accountable plan an employer must follow three rules. For a more extensive discussion of these rules and guidelines see our previous blog post linked below.      1) The expenses must be business related.     2) The expenses must be substantiated in a reasonable period.     3) The employee must return any excess reimbursement or allowance to the employer. Following these rules is enough to establish an accountable plan. However, while there is no requirement to have the plan in writing it may be wise to create a written plan to ensure that the guidelines and rules are followed. A recent article (Feb 2020) in t...

Question: The pastor of a small church is furthering his education while fulfilling his duties as a minister. He wishes to complete a master's degree to improve his knowledge and abilities as a Christian leader. If the church pays the university for its pastor's master's degree, is the benefit taxable income to him?  Answer: There are two options to be considered when answering this question. The IRS provides two avenues in which education benefits provided by the employer may be excluded from taxable income, each with separate requirements. The education assistance may be excluded from income if it qualifies as a working condition fringe benefit or is part of an educational assistance program. 1) Working Condition Fringe Benefit If education benefits meet certain requirements they may qualify as a working condition fringe benefit, and therefore be excluded from income.  IRS Publication 15-B (2020) describes the specific requirements that must be met for job-related educat...

The Unseen Presence , by   Mel Goebel  We are privileged to serve our client Mel Goebel and the ministry he recently founded--Life Relaunch. We have read his autobiography and found it to be both encouraging and challenging. If you take the opportunity to read his story, we believe you'll be thankful that you did. The Unseen Presence  is a moving story of Mel Goebel's troubled upbringing and how Christ rescued him. Mel became involved in drugs and alcohol at an early age, and found himself in prison at 20 years old. The turning point in Mel's life was when he met another prisoner whom he referred to as a "Jesus freak." After skeptically questioning this "Jesus freak," Mel was challenged to read the Bible himself. Through reading a Bible borrowed from a chaplain he learned of salvation, and turned to Christ. The  Unseen Presence  describes the ministry God provided Mel after his salvation. Having a burden for other prisoners Mel began to work with Prison...