MAMalody

They finally conceded the point.

Thanks for the input, I appreciate it. I copied the page out of the IRS pub that had an example specifically stating the above difference between repairs and depreciation of the roof. Have not heard back from the attorney yet. My situation was that I sent out the return for review and return of Form 8879. They sent me an e-mail with a statement from an attorney (he really is, I have met him) saying that the roof replacement should be expensed and then telling me not to adjust the basis.

I must be tired still or missing something. I have always thought that a roof replacement on a rental was depreciated not expensed like it could be for repairing a portion of the roof.

The method you have selected will work. For what it is worth, I have about 50 or 60 this year so far with a couple thousand in honorariums on Schedule Cs with no expenses against them. Pretty normal for me. Have never had it questioned in 25 years, not that that means much.

Hmmm. There are a couple of ways this could be handled. 1. My guess is that the church had to approve the trip with the Bishop and it could therefore be interpreted that the trip was that of a church employee (the pastor) representing his church as he acccompanied the Bishop. In this scenario, the income would be reported on Schedule C and the expenses could be on Form 2106 because he would be making the trip as an employee. 2. You could report the income and expenses on the Schedule C 3. You can report the income on the Schedule C and reference Form 2106 as mentioned earlier. The SS base will compute out the same for all three scenarios. Absent any other Schedule C honorariums I would probably use #1 or #3 because they will not attract as much attention as #2 (because this will probably be a loss Schedule C if I read the op info correctly). I would probably pick #1 if, in fact, the church did approve/designate him to go. Just to clarify, pastors are common law employees(Reg 31.3401(c)-1) for income reporting, expense deducting and fringe beneift eligibility (therefore a Form 2106 is correct for their expenses) but they are considered self-employed for social security purposes (therefore their income is subject to the SE tax; IRC 1402(a)(8)).

Thanks.

One of my clients received a scam e-mail. Fortunately they contacted me for the info to respond and I was able to put the skids to that. I can't remember the e-mail or contact to send this e-mail to, hoping they can track it down and put some folks behind bars. Does anybody have that e-mail address handy?

Happy Birthday, KC!

Unless it is a new client, last year is a good indicator. Usually the only adjustment you need to make is if they made any ES payments.

One Easter a priest and a taxi driver both died and went to heaven. St. Peter was at the Pearly gates waiting for them. 'Come with me,' said St. Peter to the taxi driver. The taxi driver did as he was told and followed St Peter to a mansion. It had everything you could imagine from a bowling alley to an Olympic size pool. 'Oh my word, thank you,' said the taxi driver. Next, St. Peter led the priest to a rough old shack with a bunk bed and a little old television set. 'Wait, I think you are a little mixed up,' said the priest. 'Shouldn't I be the one who gets the mansion? After all I was a priest, went to church every day, and preached God's word.' 'Yes, that's true.' St Peter rejoined, 'But during your Easter sermons people slept. When the taxi driver drove, everyone prayed.'

The IRS has been saying the average time for a refund for an e-file is 21 days. It looks like he is just in those time frames.

Yardly, that is how I remembered it. Thanks for the reminder, thought, I appreicate it. Abby, Hmmmm. Missing a box is my thinking. Maybe this morning I can find it. Couldn't late last night.

I am stumpted. I use ATX software. I have an individual who has donated a vehicle to Habitat for Humanity. They issued a Form 1098-C. I made the entry on the Schedule A line 17 worksheet and filled out the imput sheet for the donee information worksheet of the Form 8283. My quandry is how do I enter the rest of the info. The other worksheets do not allow me to enter the rest of the info for the donation, that is the Part 1Line 1 worksheets. I have tried deleting the form and starting it over. I have left off the info on Schedule A worksheet. No way to fill in the rest of the info. The only other thing I can think of is that the Form 8283 is not required with the Form 1098-C is present, but I am not sure I accept that. I think I am missing something in the software.

I am not sure I understand your figures. You indicate that there is a FRV of their home at $18K yet when you list their actual expenses you have "rent" included in those. I am assuming that they are renting their home so your figures do not compute (if my assumption is correct). Since the pastor is a common law employee I assume that his mileage, $500, would go first to the Form 2106 and then to the Schedule A. In reference to the SE tax your may reduce his SE base by any umreimbursed professional expenses, such as the $500 mileage (adjusted for the Deason rule).

ATX still populates Form 9325.

Just to put things together: 1. The W-2 for the pastor (in your situation) should only have entries in box 1 and box 14 (this is the housing allowance and should not be included in box 1). 2, Both the salary (box 1) and the housing allowance (box 14) is subject to SE tax unless he has an approved Form 4361 exempting him from FICA/MC on clerical income. 3. The amount that is not subject to income tax is the lower of (1) the amount designated, (2) the amount actually spent on qualified houisng expenses, or (3) the fair rental value of a furnished home plus (utilities, decorator items, and some miscellaneous expenses). If the designated housing is larger than (2) or (3), the excess amount is added into income and notated to the left of line 7 of Form 1040 4. The amount subject to SE tax can be reduced by unreimbursed professional expenses, even if he is not able to itemize deductions. 5. Here is where it gets tricky. You need to calculate the amount of professional expenses that can be attributed to his tax exempt income and reduce that amount from his unreimbursed professional expenses. The is generally referred to as the Deason Rule. 6. The IRS has a couple of free publications that help in the clergychurch area. Publication 517 and 1828 are two I remember. I also think there is a MSSP. Of coure the other recommendations for info are also all good but more expensive and not as readily available. The Guidestone (for Southern Baptist) RitaB recommended above is good. 7. The advice above is all good. 8. I also specialize in clergy taxes, you can e-mail me at [email protected] with any questions, if you think that will help. If you do that, be advised, that you will lose the benefit of peer review that this board makes available. 9. Don't ship the client, you can do this.

I don't remember accreditation being a criteria of sectiion 481. In fact, there are schools out of the US that meet the criteria....at least I ran across one in Canada. All I have to do now is remember the name.

My practice is conducted over the Internet. All contacts, docs,returns, etc. Any document I physically recieved is scanned in and shredded. None are returned (This is highlighted in my Engagement Letter). Client recieves a password protected copy of the return(s). After their review and any questions (via the Internet), they return the Form 8879 and I electronically file the return. When IRS receives the return, I send the a copy of the Form 9325 to the client. They are provided a phone number they can reach me at if necessary...so far this year I have received three calls.

Thanks for those kind words, however, there are a great number of people on this board and elsewhere that know significantly more than I do. Just glad I could help on this question.

The designation must be proscriptive. So as long as the designation is prior to ministry payment. I would recommend even prior to ministry to ensure no confusion.

Traveling evangelists are entitled to a housing allowance exclusion if they maintain a permanent home and have local churches in which they conduct religious meetings declare, in advance, a portion of thier compensation as a housing allowance. See RR 64-326.

I agree with the above. I did find a book that indicated the following: "rule of thumb" among realtors nationwide is that the fair rental value of a home (whithout furnishings) amounts to 1% of the appraised fair market value per month. This formula is fairly accurate. However, the condition, location, local market demand, and local economic conditions of your home will need to be considered. Ex. If your home is appriased at $150,000, the montlhly FRV could be $1,500. Annual FRV could be $18,000.

Signatures is the right answer.

Is there any way for churches to continue paying for employees’ health insurance through private insurers or state exchanges as a nontaxable fringe benefit? IRS Notice 2013-54 mentions three possibilities: • The market reforms do not apply to a group health plan that has fewer than two participants who are current employees on the first day of the plan year. • The market reforms do not apply to a group health plan with regard to “excepted benefits,” which are defined to include “among other things, accident-only coverage, disability income, certain limited-scope dental and vision benefits, certain long-term care benefits, and certain health FSAs.” IRC 9832(c). As a result, these plans are not necessarily prohibited for failing to comply with the Affordable Care Act’s market reforms. • Another option that may allow some churches to continue to pay employee insurance premiums on a pre-tax basis is to participate in the Small Business Health Options Program (SHOP) marketplace. The SHOP marketplace makes it possible for small employers to provide qualified health plans to their employees. Some conditions apply. For 2014 the SHOP marketplace is open to employers with 50 or fewer full-time equivalent employees (FTEs). You may qualify for tax credits if you use SHOP. The small business health care tax credit that many churches received in the past is only available for 2014 for plans purchased through the SHOP marketplace.