10 Ways Churches & Ministries Can Prepare for 2021

By Christine Bove

We couldn’t have possibly prepared for what awaited us this past year. While 2020 brought about many shifts in our lives, we can use the last couple of weeks to prepare for what God has in store for all of us in 2021.

As pastors and ministry leaders, how do you finish 2020 strong and best prepare for 2021?

To help you get ready for the New Year, we’ve compiled an Ultimate Year-End Checklist to help your church or ministry. This checklist covers administrative tasks, financials, taxes, and more. With this ultimate guide, you can feel confident that you are setting your best foot forward for 2021.

In this blog, we will share 10 of the items from our Ultimate Year-End Checklist and let you know how to get the full checklist for FREE…

10 Ways to Prepare for 2021

Administration

Where to begin? One of the best places to start is with all of the back-of-house work that needs to be completed.

1. Prepare for your annual board meeting.

We recommended holding a board meeting at least once a year. This yearly board meeting is a time to discuss important issues, such as the addition or removal of a board member or officer and the approval of policies that need meeting minutes to back them up. Board meetings don’t have to be a source of stress. To make running your board meetings easier, we have created resources that can help.

Check out our Minutes Suite, or give us a call at 877-494-4655 to learn about how our KeepRIGHT Service can prepare accurate board meeting minutes for you.

2. Review policies.

There are a couple of items to review: First, include the annual review and approval of compensation agreements. Secondly, include the designation of housing allowances with current pastors. Other things to include would be a cell phone policy and accountable reimbursements. For your convenience, you can find these in our Policies Suite.

3. Review filing requirements and annual reporting for your state.

We cannot stress this enough. Failure to file a report with your state every year (depending on your state’s requirements) may result in the state dissolving your church or ministry.

If you need help determining what these requirements are or if you can’t keep track of filing these reports, our KeepRight Service is for you! Click here or call us today at 877-494-4655 to learn more.

While these are a few administrative tasks you need to handle before the year is over, you can download a fully comprehensive FREE Year-End Checklist by clicking here.

Bookkeeping

Having accurate books and financial records will set up your next year to be a success.

4. Get your important financial documents in order.

We recommend gathering your statements, outline a budget for next year, and review this past year financially. Be sure to check for any areas where you grew financially. You will be able to see what accommodations should be made in your budget for the following year.

5. Prepare love offerings and honorariums documentation.

Be sure to notify pastors and staff who received any love offerings or honorariums that they will be added to their W-2 as compensation. (To be clear, love offerings are considered taxable income by the IRS.) This includes non-cash gifts, except for a gift with a value so small that it would be unreasonable or administratively impracticable to count. This type of gift is called a nontaxable de minimis fringe benefit.

6. Review reimbursements.

For any reimbursements requested throughout the year, make sure you have followed your accountable reimbursement policy in documenting these expenses.

These financial documents will be essential for either your bookkeeper or data entry specialist. If you don’t have someone who handles these tasks for you, look to our Bookkeeping Service! Our bookkeepers are ministry-minded financial specialists to help support your staff in staying compliant. Click the link below or give us a call at 877-494-4655 to speak to a bookkeeper today!

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Data entry

7. Notify your congregation.

Make sure your congregation knows that all giving for 2020 must be postmarked or received by the church no later than midnight on December 31, 2020. Let them know that any donations given after this date will be included in next year’s giving statements.

8. Track your giving statements.

Giving statements must be given to anyone whose total donations exceeded $250 in the year. These statements can be printed or emailed directly from most donation tracking platforms, including our very own Kingdom Steward.

We also recommend that you backup your records and, if possible, make them accessible off-site. Cloud storage is an excellent option and is also a feature of StartCHURCH’s donation tracking software, Kingdom Steward.

Taxes

Administrative and financials are not the only tasks to be concerned with; you also will want to use this time to prepare for tax season!

Even if your church or ministry is 501(c)(3) tax-exempt, make sure your staff and contractors can receive their Form 1040 to file their taxes. This also includes any contributions you may have made on their behalf, such as:

9. All employees should review and update their form W-4s.

This is the form they would have filled out when they were hired. It’s helpful to review this form to ensure information is still accurate. When employees have gone through significant life events such as marriage or the addition of a new family member, their tax withholdings may be altered, so be sure to update those documents for accuracy.

10. Give a gift for the season.

While there are some guidelines, Section 74 of the Internal Revenue Code provides that churches and ministries can give a tangible gift to an employee, including pastors, as long as it meets the requirements of a qualified employee achievement award outlined in sections 74 and 274(j). When giving a gift, make sure you meet the following criteria:

• The program is in writing, and awards are given under conditions and circumstances that do not create a significant likelihood of it being disguised compensation.
• The award is tangible property, such as tablets, laptops, desks, etc. The item cannot be travel, vacations, meals, lodging, theater or sporting event tickets, stocks, bonds, or other securities.
• The award is for length of service (after every completed fifth year of service) and is given as part of a meaningful presentation or ceremony. The award generally cannot surpass $400 in value.

Set up the year 2021 for success

While we covered 10 items to check off in today’s blog, our FREE Ultimate Year-End Checklist covers 30 total items to help your church or ministry prepare for the New Year! Starting these tasks now will help alleviate the pressure of getting your essential year-end tasks accomplished. Not only that, but it will help ensure that your church or ministry stays compliant, letting you start the next year with confidence. This checklist might seem like a daunting task; just know you are not alone! We offer many services to help you and your ministry stay compliant.
As a resource for you, we have created a fully comprehensive checklist for you to use. Click the link below to access your FREE Ultimate Year-End Checklist now!

We know God is going to do amazing things through your churches and ministries! If we can help you in any way, please give us a call at 877-494-4655!

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