MinistryCPA - Corey A. Pfaffe, CPA, LLC

Encouraging QCDs (Qualified Charitable Distributions) — Church and NFP Actions Since January 1, 2018, generous supporters at least 70½ years old have enjoyed a new means of giving. No longer should they find themselves withdrawing funds from their Individual Retirement Accounts ( and paying tax ) only to make charitable contributions that have no tax deduction benefit. To recall, these donors can have their IRA companies withdraw from their retirement investments, sending the distributions directly to the charities of their choice. They cannot deduct the amounts as tax write-offs, but neither do they owe tax on the distributions. These distributions also satisfy IRS rules for annual Required Minimum Distributions (RMDs) that are mandatory beginning at age 73. How can your church or NFP assist these donors? 1.       Educate. Make sure your supporters understand QCD rules and processes. Encourage them to ask their IRA investment advisors for clear instructio...

      What does it mean to be a dual status employee?                  A minister, per IRS regulations, is both an employee and self-employed— dual status . As an employee, a minister is eligible for all fringe benefits offered to non-minister employees — health coverage, retirement plans and so on. The exception lies in social security and Medicare tax. Non-minister employees must have 7.65% of their wages withheld to pay for one half of their social security and Medicare taxes (it’s called FICA tax). Their employers forward this withholding to the IRS along with a matching 7.65% — a total of 15.3%. As a minister employee serving church and other ministry employers you must pay your own social security and Medicare taxes—all of it, 15.3% (it’s called SECA tax).  This excerpt is a portion of our top 10 list for new ministers. If you would like to see all of the frequently asked questions ministers have you can visit ...

     How can I live within my means?                  You need a budget. Enjoying a long-term ministry in Christian service requires an ability to live within your means. Lots of tools are available: Christian authors with “how to” instructions and online apps, to name a couple. Try You Need a Budget ( www.ynab.com ), if you need an idea. This excerpt is a portion of our top 10 list for new ministers. If you would like to see all of the frequently asked questions ministers have you can visit this  link . 

New ministers frequently have several questions as they enter a new field that has significantly different rules than the standard employee of a business has. We have assembled a list of some of the most important questions that a new minister should investigate when starting their new job.  1. How can I live within my means? You need a budget. Enjoying a long-term ministry in Christian service requires an ability to live within your means. Lots of tools are available: Christian authors with “how to” instructions and online apps, to name a couple. Try You Need a Budget (www.ynab.com), if you need an idea. 2. What does it mean to be a dual status employee? A minister, per IRS regulations, is both an employee and self-employed—dual status. As an employee, a minister is eligible for all fringe benefits offered to non-minister employees — health coverage, retirement plans and so on. The exception lies in social security and Medicare tax. Non-minister employees must have 7.65% of thei...

  QuickBooks Warning for QB Desktop 2021 :   QB Desktop Pro, Premier, Enterprise, Accountant, & Mac 2021 versions are facing a service discontinuation after May 31, 2024. What this means : You can still use your desktop product but will no longer have access to QuickBooks Desktop Payroll, Desktop Payments, live technical support, Online Backup, Online Banking, and other services through QuickBooks Desktop 2021. QB will not provide security updates after June 1, 2024. The 2021 discontinuation warning is not new, but Intuit’s July 31, 2024 product announcement will change the landscape.   After July 31st – Intuit will only be offering QB Desktop Enterprise for new subscribers. The only entities who will still be able to continue to use their current desktop product’s full functionality and receive security updates will be those who have an existing active subscription by July 31, 2024.   Intuit has publicly stated, “all future innovation will happen in Quick...

As of January 1, 2024, the Corporate Transparency Act (CTA) has taken effect. The Act was originally signed in 2021 but has taken several years of planning to implement. We wanted to walk through some of the basic guidelines to clarify who needs to file the paperwork to comply with this new act.  The CTA was created to help the Financial Crimes Enforcement Network (FinCEN) with tracking and discovering fraudulent entities that are laundering money, hiding assets, and funding illegal activities. The information that needs to be filed is fairly straightforward for the majority of businesses that need to file a report. We want to focus on the basics throughout this overview. If you have any questions or more complex situations please contact us and we can talk through your situation with you.  The first step to filing a Beneficial Ownership Information (BOI) report is to determine if the business is formed in such a way that it is subject to the CTA. Only entities that are forme...

The start of a new year tends to bring on new goals. Normally we think of health goals, but we would challenge you to develop some financial goals and knowledge over the coming year. Over the next several weeks we are going to be presenting a new series on what the Bible says about finances. We hope that this series is an encouragement and challenge to each of you as we explore the topics. Included below is a list of the topics that will be coming in future posts, if you have questions on additional topics please leave them in the comments below.  Debt and Taxes Savings and Investing Giving and Generosity Financial Temptation Work and Work/Life Balance Inheritance and Legacy In this first post, we want to get you thinking about where you have gathered your financial knowledge and provide you with some additional resources that should be added to your reading list for the year. How have you learned about family finances? Parents- formal Parents- informal Siblings or other family mem...

The IRS has issued 2024 standard mileage rates. These rates begin on January 1, 2024, and apply to the use of a car, van, pickup or panel truck. 67 cents per mile for business miles driven (up from 65.5 cents during 2023). 21 cents per mile for medical purposes (down from 22 cents in 2023). 14 cents per mile driven in service of charitable organizations (no change from 2023). More information is available on the IRS's  website .

Question: Are gifts to employees taxable? Answer: Almost every year, we receive this question or one similar to it. The end of the year and holiday season is a common time for employers to do something special for their employees, and the special treat normally comes in the form of some type of gift or bonus. In an employer's best efforts to avoid increasing their employee's taxable income, it is possible that IRS rules are being broken regarding the taxability of the gift. To determine the taxability of the gift, there are a couple of factors to keep in mind.  1. Is the gift cash or a cash alternative? If it is, then the gift would be viewed as compensation by the IRS. Cash alternatives include items such as gift cards, gift certificates, and other replacements that can be redeemed for some type item with a monetary value.  2. Would the item be considered a de minimis fringe benefit by the IRS? De minimis fringe benefits are benefits that the employee receives as part of thei...

  This is another posting in the MinistryCPA Top 10 series: Being the treasurer can be a big task, especially when you are new to the position. There are many different aspects of church finance, from internal financial reporting to church payroll. Today we are going to cover 10 questions that we receive from new treasurers.   1. How do I create a budget? Budgets are largely based on the previous year’s performance. Budgets should be created with the help of old financial statements as well as people who will be using the funds. A budget committee can be formed from church members, board members, and pastors to help plan what the church will require for different ministry expenses. These numbers can then be put into budgetary financial statements to help show the financial position of the church at the end of the year. 2. What policies should be in place to protect people in the ministry regarding cash receipts and disbursements? Cash receipts is an area that needs to be ...