Financial Services & Support

DEDUCTION FOR UNREIMBURSED EMPLOYEE EXPENSES SUSPENDED

President Trump signed the “Tax Cuts and Jobs Act” into law on Dec. 22, 2017. One implication of the legislation impacts church employees related to their ministry-related expenses.

Church staff who have claimed deductions for unreimbursed employee expenses need to be aware that this deduction was suspended. This means they will lose a deduction that may or may not be valuable depending on how much they benefit from the increased standard deduction.

Churches that either do not reimburse their pastor for expenses incurred in their ministry or cap these expenses should note the loss of the ability of the pastor to deduct these items. In such cases, the church should review its expense reimbursement policy and consider implementing an accountable reimbursement policy that allows for nontaxed reimbursement of these expenses.

Any changes in expense reimbursement should be implemented as soon as possible so as to lessen the impact when filing the 2018 Federal income tax return.

If you have questions concerning this issue please contact Jeff Cranford, BGAV Compensation Planning Specialist via phone at (804) 921-3945 or by email to jeff.cranford@bgav.org.

RENEWED CHALLENGE TO THE HOUSING ALLOWANCE FOR MINISTERS

On October 7, 2017, Judge Barbara Crabb of the District Court for the Western District of Wisconsin once again ruled that the ministerial housing allowance is an unconstitutional preference for religion. Judge Crabb stayed (or suspended) the enforcement of her ruling until the end of October 2017, so that the parties can submit briefs on appropriate remedies for the plaintiffs.

It is likely, though not certain, that when the issue of remedies is resolved, the judge will do what she did in her earlier decision in 2013 and stay or suspend enforcement of the ruling pending an appeal. But, this is not certain and so ministers and churches should be alert to developments.

Note that a ruling by the Seventh Circuit Court of Appeals would apply to ministers in that circuit, which includes the states of Illinois, Indiana, and Wisconsin. It would become a national precedent binding on ministers in all states if affirmed by the United States Supreme Court. The practical effect of any ruling will be delayed until the appeals are exhausted, which could take several years.

A final ruling could be prospective only in its application, depending on the court, or regulatory adjustments by the IRS in response. Note, however, that the IRS would have the discretion to follow or not follow an eventual ruling by the appeals court nationally to promote consistency in tax administration.

Additional information is available at here.

Upcoming Events

Church and Clergy Tax Seminars: for church staff and lay leaders who handle taxes and compensation
Planning for Retirement Seminars: help church staff save for retirement; and help lay leaders offer custom retirement plans
Church Financial Administration Seminars: provide an opportunity for training for new and prospective church financial officers (e.g. treasurers) and financial staff. Those who are experienced financial leaders and staff will have opportunities to learn about the latest resources and approaches to church financial ministry.
Church Staff Benefits: help churches create and manage benefits as part of a comprehensive compensation plan for church employees

Church and Clergy Tax Seminars:

Contact our office for more information on upcoming events.

Planning for Retirement Seminars:

Contact our office for more information on upcoming events.

Church Financial Administration Seminars

Contact our office for more information on upcoming events.

Church Staff Benefits

	Date/Time	Event
	September 7, 2018 9:30 AM - 12:00 PM	Church Staff Benefits Seminars West Hampton Baptist Church, Hampton
	September 11, 2018 9:30 AM - 12:00 PM	Church Staff Benefits Seminars Virginia Baptist Resource Center, Henrico
	September 18, 2018 9:30 AM - 12:00 PM	Church Staff Benefits Seminars Northstar Church Network Office, Annandale
	September 27, 2018 9:30 AM - 12:00 PM	Church Staff Benefits Seminars Bonsack Baptist Church, Roanoke

Jeff Cranford
Field Strategist, Central Region; Compensation Planning Specialist
804.921.3945
jeff.cranford@bgav.org

Click on the following headings for information related to these vital areas of providing financial support for church staff to empower them for effective ministry.

Treasurer's Role

Church Treasurer’s Role (PDF, 4.2 MB]

The Church Treasurer’s Role is an excerpt from the Church Management Guidebook, a publication of the Support Ministries Team at the Baptist General Association of Virginia. Please Note: This publication is intended to provide a timely, accurate, and authoritative discussion of the position of Church Treasurer. It is not intended to be an exhaustive discussion of all items relating to the position of the church treasurer. It is also not intended as a substitute for legal, accounting, or other professional advice. If legal, tax or other expert assistance is required the services of a competent professional should be sought. Although we believe this document provides accurate information, there may be changes resulting from IRS or judicial interpretations of the Tax Code, new tax regulations, or technical corrections that occurred after the printing of this book that are not reflected in the text.

Church Staff Compensation Study and Reports

The 2018 Compensation Survey is now online and available for churches to begin filling in the data. Emails from GuideStone have been sent but your help is greatly appreciated in making your churches aware of this valuable tool. A banner will be up on the GuideStone website today. You can use the link http://www.guidestone.org/compensationsurvey to access the survey.

The 2016 Compensation Study is available for use by churches and church staff in compensation planning. The 2016 study was a joint project of state Baptist conventions, Lifeway Christian Resources and GuideStone Financial Resources.

Compensation and congregational data was collected anonymously from ministers and office/custodial personnel of Southern Baptist churches and church-type missions. Reports are based on compensation for over 12,000 respondents from all 42 state conventions. While this data is made available with respect for the autonomy of each local church, the information can help a church be objective in considering appropriate staff compensation. All amounts are annual amounts based on 2016 compensation. Cost of living adjustments should be made when using the data in subsequent years.

Insurance Services

Providing adequate insurance protection for church employees is a constant challenge for BGAV churches and associations. The primary sources for BGAV church employees insurance needs are GuideStone, SBC and the Church Benefits Board, CBF. Please visit the web sites of these two boards to learn about their insurance plans. Occasionally, church employees are unable to use the services of either GuideStone or Church Benefits Board medical insurance plans. For alternative sources of medical coverage or help with other insurance questions contact us!

Compensation Planning

Using a comprehensive approach to compensation planning will insure that the church’s financial support resources are maximized and that church employees have the support they need to be freed for empowered ministry. One of the best tools for compensation planning for church employees is available on the GuideStone Financial Resources, SBC web site. This booklet can be viewed online, printed, or downloaded in pdf format. The booklet may also be requested by mail by calling GuideStone at 1-888-984-8433.

Retirement Services

The Compensation Planning Specialist can provide information, consultations, and resources on church retirement plans and compensation planning using GuideStone Financial Resources, SBC; the Church Benefits Board, CBF; or other providers. BGAV church employees typically use one of two providers for their retirement preparation, GuideStone, SBC or the Church Benefits Board, CBF. Information may also be requested by mail by calling GuideStone at 1-888-984-8433. This office can also provide information and referral for those needing the resources of the Church Benefits Board, CBF. Information is also available by visiting the Church Benefits Board web site. Supporting events can be found on our Retirement Planning Seminars and Conferences page.

Salary Package Information

The Compensation Planning Specialist can provide information, consultations, and resources to assist churches in creating a salary package for church staff.

Tax Information

The Compensation Planning Specialist can provide information, consultations, and resources to help church staff and lay leaders understand and comply with tax laws relating to churches and church staff. Structuring church employee’s compensation properly according to IRS guidelines results in a lower tax liability and compliance with IRS regulations. One of the best resources for handling minister’s taxes and church tax reporting requirements is the annual Minister’s Tax Guide published by GuideStone, SBC. The 2017 version is now available. The guide may also be requested by mail by calling GuideStone at 1-888-984-8433. Our team is available to assist with your tax questions as well. Several C.P.A. consultants around the state who are knowledgeable about church and clergy taxes assist Virginia Baptists as well.

HealthCare Reform and Providing Medical Insurance for Church Employees

Beginning January 1, 2014, the Affordable Care Act (ACA) mandated new rules around how employers can assist employees with the cost of health care coverage through reimbursement vehicles such as employer payment plans, health reimbursement arrangements (HRAs) and Section 125 plans including premium-only cafeteria plans (POPs) and flexible spending accounts (FSAs).

Information on Healthcare Reform is available at http://www.guidestoneinsurance.org/HealthcareReform2.

Jeff Cranford, BGAV Compensation Planning Specialist, can provide information, consultations, and resources to help church staff and lay leaders understand and comply with the provisions of Healthcare Reform.