Year end taxes report

1. Year end taxes report BY MAY HER (MAIV)

2. Bible • Pay Taxes, Romans 13:1-7 Must pay Taxes, Romans 13: 6, 7 This is also why you taxes, for the authorities are God’s servants, who give their full time to governing. Give everyone that you owe him; if you owe taxes, pay taxes, …. Albert Einstein says, The hardest thing in the world to understand is the income tax. ***Very tough Job, but don’t worry*** Ephesians 1: 19-20 and his incomparably great power for us who believe. That power is like the working of his mighty strength, which he exerted in Christ when he raised him from the dead and seated him at his right hand in the heavenly realms.

3. THE COMMON ERRORS OF CHURCH

4. THE COMMON ERRORS OF CHURCH

5. THE COMMON ERRORS OF CHURCH

6. Designated Fund = Tax deductible • Programs & Projects: The governance authority established the program or project before any contributions are made and The program or project is consistent with exempt purpose and uses of the church • Short Term Mission Trips: Church Control Governance authority should pre-approve trip as meeting church exempt purpose Must not include a significant element of personal pleasure, recreation, or vacation Participants must have duties that are not nominal or minimal (6-8 hours per day)

7. Hmong Alliance Church of The Christian and Missionary Alliance Hmong Alliance Church of The C&MA May Her P.O. Box 7 1234 Main St. Denver, Colorado 12345 Denver, Colorado 12345 Adams 84-1234567 May Her   2284  January 1, 1984 

9. Church Staff/Employee Compensation • Compensation Package Examples: 1. Clergy, Rev. Moob Xwbfwb Salary: Base Salary …………………………… $20,000 Housing Allowance………………. $10,000 Reimbursement Allowance……… $5,500 Employer Social Security Grant … $5,000 Total………………………………….. $40,500 Benefits: Heath/Dental Insurance …………. $5,000 Total Package Value……………… $45,500 2. Non-Clergy, Paaj Secretary Salary: Base Salary ……………………… $12,100 Benefits: Heath/Dental Insurance …………. $2,500 Total Package Value…………….. $12,600

10. 1 2 3 Moob Xwbfwb 123 45 6789 7777 Forgiven Rd Denver, CO 12345 Hmong Alliance Church 1234 Main St. Denver, CO 12345 84 1234567

12. Reporting to Tax Authorities Quarterly Reports • Form 941 Work-Sheet for Form 941 Base Salary for Rev. Moob, Xwbfwb $20,000 Church Social Security Grant $5,000 Total………………$25,000 / 4 = $6,250 Base Salary for Paaj Secretary … ..$12,100 / 4 = $3,025 Then $6,250 + $3,025 = $9,275 The $9,275 will be appear on Form 941 line 2 • Form W-3 Work-Sheet for Form 941 Total of Rev. Moob, Xwbfwb $25,000 Total for Paaj Secretary…………………… $12,100 Totals………………………… $37,100 Then $37,100 will be appear on Form W-3 box 1

13. Example of Housing Allowance Form • Housing Allowance Expense Form For Clergy • Minister are permitted to exclude from their church income for federal income taxpurposes a "housing allowance" designated by their employing church, to the extent that the allowance is used to pay housing expenses. To assist the HMONG DISTRICT in designating an appropriate amount, please estimate on this form the housing expenses you expect to pay next year, and then return to the finance officer of the Hmong District. • CATEGORY ESTIMATED AMOUNT • OF EXPENSE FOR 2009 • 1. Mortgage or Rental Payment __________________ • 2. Utilities (electricity, gas water, trash pickup Local telephone charge) __________________ • 3. Furnishings and Appliance (purchase and repair) __________________ • 4. Structural Repairs and Remodeling __________________ • 5. Yard Maintenance and Improvements __________________ • 6. Maintenance Items (household cleansers, light bulbs, • Pest control, etc... ) __________________ • 7. Miscellaneous __________________ Total Estimated Expenses for 2009 __________________ • The above listed expenses represent a reasonable estimate of my housing expenses for next year. • I understand and agree that: The Hmong District will not designate a portion of my compensation as housing allowance until I complete and return this form. Retroactive designations of housing allowances are not legally effective. It is my responsibility to notify the Hmong District in the event that these estimates prove to be materially inaccurate during the year. • My housing allowance exclusion is an exclusion for federal income taxes only. I must add my housing allowance as income in reporting my self-employment taxes on Schedule SE (unless I am exempt from self-employment taxes). • ________________________ _______________________ • Signature of Minister Date • I attest that I received this form from the above • minister on____________________, 2009 • ___________________________ __________________________ • Signature of DS Date

14. How to set up an Accountable Reimbursement Plan The Church must have: • The payment of expense must be for ordinary and necessary expenses for job performance. • There must be a written policy or plan. • The employer (Church) must allocate expense fund that are distinct from personal compensation. • The employee (Minister must account for expenses in a timely and proper manner. The reporting system should require the pastor to submit written records and receipts that detail each expenditure. These should include: • The date • The type of expense • To whom it was paid • The business or ministry purpose If expenses exceed the amount allowance for reimbursement plan may not be paid or reimbursed by salary reduction. For example, if $5,500 is budgeted for the year but the minister actually spends $6,000 by year end, the extra $500 cannot be treated as a reimbursement by simply reducing the minister’s $500.

15. 8 4 1 2 3 4 5 6 7 Hmong Alliance Church 1234 Main St. Denver CO 12345

16. 8 4 1 2 3 4 5 6 7 Hmong Alliance Church of the C&MA  1234 Main St Denver, CO 12345 2 9,275 00 2,000 00 3,025 00 375 10 3,025 00 75 63 450 73 2,450 73 2,450 73 2,450 73 2,450 73

17. X Hmong Treasurer Signature Goes Here Treasurer

18. 123-45-6789 84-1234567 25,000 6,000 Hmong Alliance Church of the C&MA 1234 Main St Denver, CO 12345 X 403b Rev. Moob Xwbfwb  7777 Forgiven Rd. Denver, CO 12345 Ordained – Not included above 10,000 Housing Allowance CO 22-123456789 25,000 0 Pastor

19. 222-33-4455 84-1234567 12,100 2,000 Hmong Alliance Church of the C&MA 1234 Main St Denver, CO 12345 12,100 750.00 12,100 175.46 Paaj Secretary 7777 Forgiven Rd. Denver, CO 12345 CO 22-123456789 12,100 265.00 Secretary

20.  37,100 8,000 12,100 750.00 2 2 12,100 175.46 84-1234567 Hmong Alliance Church of the C&MA 1234 Main St Denver, CO 12345 CO 22-123456789 12,100 265.00 Hmong Treasure 303 123-4567

21. Questions?

22. 100.00 Hmong Alliance Church of C&MA 1234 Main St Denver, CO 12345 100.00 100.00 100.00 100.00 100.00 Joe A. Smith 100.00 100.00 7777 Forgiven Rd Denver, CO 12345 84-1234567 100.00 100.00 100.00 100.00 100.00 100.00 100.00