All Posts /

10 Essential Questions about Taxes and Finance for Churches and Nonprofits

10 Essential Questions about Taxes and Finance for Churches and Nonprofits

Tax and Finance Guide for Churches

by Dan Busby, Vonna Laue, Michael Martin, and John Van Drunen, adapted from their new book Zondervan 2018 Church and Nonprofit Tax & Financial Guide (For 2017 Tax Returns).

  1. Tax exempt status. Should our church or nonprofit file for tax exemption with the Internal Revenue Service? Are we required to annually file Form 990? (Refer to chapter 2 in the book.)
  2. Unrelated business income exposure. Do we have any filing requirements for unrelated business income? If we have some unrelated business income, will we lose our tax-exempt status? (Chapter 2)
  3. Public disclosure. Is our organization required to disclose any documents to the public based on appropriate requests for them? If so, which documents? (Chapter 2)
  4. Political activities. Are the activities of our organization consistent with the political activity law? (Chapter 2)
  5. Housing allowance. How do we determine whether a minister qualifies for a housing allowance designation? Are the rules for qualifying for the housing allowance identical for churches and other nonprofits? (Chapter 3)
  6. Reporting compensation. Which payments to employees are taxable and must be reported on the annual Form W-2? (Chapter 5)
  7. Handling gifts. What steps can we take to ensure the highest integrity in processing gifts, especially cash offerings, and providing acknowledgments to givers? (Chapter 6)
  8. Internal and external auditing. Should we have an audit, review, or compilation by an independent CPA? If not, how can we perform a valid internal audit of our financially related processes? (Chapter 6)
  9. Noncash gifts. How do we handle noncash gifts? What type of receipt should we provide? Should we ever place a value on a noncash gift, including gifts of services? (Chapter 7)
  10. Giver-restricted gifts. When a giver restricts a gift, how do we determine whether we should accept the gift and whether it qualifies as a charitable contribution? (Chapter 8)

— Dan Busby, Vonna Laue, Michael Martin, and John Van Drunen, Zondervan 2018 Minister’s Tax & Financial Guide.

How to Use This Book

This guide is “an outstanding resource for anyone handling the financial affairs of the church,” writes Simeon May, CPA, executive director of The Church Network.

This guide includes:

  • expert advice on handling charitable gifts
  • risk management checklists
  • easy techniques for simplifying financial policies and procedures
  • tried-and-true steps for reporting financial information
  • key steps in sound compensation planning
  • examples of required IRS filings

Get the guide for churches and nonprofits today. Also available from the authors: Zondervan 2018 Minister’s Tax & Financial Guide.