21 Nov 2019

23 Tasks to Prepare Your Church for 2020

Kristen Calicott

Preparing for the holidays brings us excitement and anticipation, but it can also hold trepidation for the coming year and unforeseen deadlines. By being prepared, you can alleviate a great deal of those concerns, giving yourself time to breathe and to actually enjoy the end-of-year festivities. 

I encourage you to set some time aside to reflect on where God has led you this year and where you feel called in the coming year.

To prepare you for 2020, we have compiled a checklist of 23 things that you can use to get ready. From administrative tasks to financial audits, this list will have you ringing in the new year with cheer!

Administrative allocations

First and foremost, you need to focus on office-related responsibilities. Your regular staff, reporting, and records will require updates and reviews to be properly prepared.

  1. Get ready for your annual board meeting. It is recommended to hold a board meeting at least once a year to discuss important issues, such as the addition or removal of a board member/officer and the approval of policies that need meeting minutes to back them up. If you don’t feel confident running board meetings, we have resources that can help. Check out our Minutes Suite, or give us a call at 1-844-277-8229 to learn about how our KeepRIGHT Service can prepare accurate board meeting minutes for you.  
  2. When you review policies, be sure to include the annual review and approval of compensation agreements and designation of housing allowances with current pastors. Other items to include would be a cell phone policy and accountable reimbursements. These can be found in our Policies Suite for easy reference.
  3. Update employee files with new information, such as address changes and emergency contacts.  
  4. Locate any legal documents that were used to form the organization or any other document may be needed in the future by a tax professional, insurance agents, etc. Make sure that those who might need them know where they are in case you are unavailable.
  5. Review insurance policies to ensure you have a plan that is suited to your organization’s needs. Consider shopping around for better rates. It is better to do this at the end of the year than at the beginning when everyone else is looking for new insurance, and the rates may go up.
  6. Audit your organization’s website and remove any links to personal businesses that may be included. Update contact information and event details so that information is current.
  7. Review filing requirements and annual reporting for your state. This is a must, as failure to file a report with your state every year (depending on your state’s requirements) may cause your church or ministry to be dissolved by the state. If you need help determining what these requirements are or if you just can’t keep track of filing these reports, our KeepRight Service is for you!

A majority of these items will make it easy to pick up financial documents while you are moving through the list, which leads us to the next item on our list: finances.

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Financial fortitude

While gathering documents for the administrative portion of your organization, you probably came across a few financial documents that you will need either for your bookkeeper or data entry specialist. If you don’t have someone who handles these tasks for you, you should check out our Bookkeeping Service to see how adding a ministry-minded bookkeeper to your staff can greatly benefit your organization!

Bookkeeping

  1. Save yourself time and energy now by getting your finances in order! Gather your statements, outline a budget for next year, and review any areas where you financially grew to see what accommodations you should make in your budget if any.
  2. Make a list of anyone who was paid as a contractor for your organization, and notify them that they will be receiving a 1099-MISC if they were paid over $600 for the year. This includes guest speakers and volunteers that were gifted monetarily for their services. Make sure they filled out a W-9 when they were contracted, so you can mail their information out when necessary.
  3. Alert pastors and staff who received any love offerings or honorariums that they will be added to their W-2 as compensation. (Yes! Love offerings are considered taxable income by the IRS. You can read more about it in our blog, “A Simple Guide to Giving Love Offerings.”) This includes non-cash gifts, with the exception of 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.
  4. Review any reimbursements that were requested throughout the year, and make sure you have followed your accountable reimbursement policy in documenting these expenses.
  5. As you did with your insurance company, review your bank’s Annual Percentage Rates on loans or credit cards, and shop around for better deals and rates!

Hire a Bookkeeper to Manage Your Finances!

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Data entry

  1. Make sure your congregation knows that all giving for 2019 must be postmarked or received by the church no later than midnight on December 31, 2019. Anything given after this date will be included in next year’s giving statements.
  2. 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.
  3. Practice printing your statements ahead of time so you are familiar with the process. This way, you avoid being on hold with customer service at the same time as everyone else having technical difficulties with their donation software programs.
  4. Make sure your records are backed up and, preferably, can be accessed off-site. This allows you to send giving statements and record donations in the event that you cannot physically get to the church. Cloud storage is an excellent option and is also a feature of StartCHURCH’s donation tracking software, Kingdom Steward.

Making sure these tasks are completed will prepare you for the next task: getting ready for tax season!

Track Donations with Kingdom Steward!

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Ready for tax season

As with anything, the last part to work through is preparing for your organization’s taxes. Even if your church or ministry is 501(c)(3) tax-exempt, you still need to make sure that your staff and contractors can receive their Form 1040 to file their taxes. This should also include any contributions you may have made on their behalf, such as:

  1. All employees should review and update their form W-4s. This is the form they would have filled out when they were first hired. It’s helpful to review this form when employees have gone through certain life events such as marriage or the addition of a new family member. These events may affect their tax withholdings, and in the event of life changes, the last thing they may be thinking about is their tax forms.
  2. Section 74 of the Internal Revenue Code provides that churches and ministries can give a tangible gift to an employee, including pastors, so long as it meets the requirements of a qualified employee achievement award set forth in sections 74 and 274(j). The following criteria must be met:
  • 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.
  1. If your payroll service is not filing quarterly 941s for you, make sure to file it by January 15. You will have all of the information you need to complete this form by the end of December.
  2. If any non-cash items valued at $5,000 or more were donated and disposed of (including sale, raffling, or gifting) within three years, you are required to file Form 8282 with the IRS.
  3. Calculate any unrelated business income tax that your church may owe from any income that is generated over $1,000. Activities that may count are bookstore sales and rental income, among others. 
  4. Review your health insurance payments for any tax credits that may be applicable, such as the 25% refundable tax credit set forth by the Affordable Care Act.

Prepared for the new year

Walking through this checklist can help prepare you for the new year and rest in the assurance that you have taken the right steps to better organization and documentation for your church or ministry. If you have any questions about the recommended steps to take, give one of our specialists a call at 877-494-4655, and be sure to ask for your FREE year-end checklist. You can also click here to schedule a call so that a specialist will call you at your convenience. 

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Please feel free to comment. We always appreciate good dialogue. However, we do moderate each comment to ensure that it is on topic and not derogatory to other participants. We ask that you keep your comments brief and pertinent to the topic so that others may benefit.

Blessings,
Raul Rivera


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