01 Oct 2019

Why You Should Thank Your Pastor This Month

Christine Bové

“The elders who direct the affairs of the church well are worthy of double honor, especially those whose work is preaching and teaching.” 1 Timothy 5:17

Happy Pastor Appreciation Month! 

We are so incredibly thankful for the men and women who have chosen to answer God’s call on their lives. And not only that, but also for living so sacrificially for the good of the Kingdom day-in and day-out. 

We want to say a big “thank you!” for your major contribution to the Kingdom of heaven.

In celebration of these individuals who have so freely given of themselves, oftentimes without pay or recognition, we wanted to give three ideas for how to honor the incredible pastors in your life.

Whether you are a pastor yourself or you have a pastor you want to honor, there are several ways to celebrate.

3 ways to thank your pastor

1. Heartfelt cards and letters

Everyone has a “love language,” meaning, everyone experiences and feels the most love in various different ways. 

Some pastors experience love through quality time and others through acts of service. Some pastors enjoy receiving words of affirmation or words of encouragement. 

If your pastor is one that is really touched by encouraging words, verbal affirmation is a wonderful gift to give.

  • Cards and letters. Everyone loves getting mail! Writing a heartfelt card or letter with prayers and encouragement is an excellent way to show your pastor your appreciation.
  • Encouragement jar. Fill a mason jar or a photo box with pre-written encouraging words, short messages, and Scripture. This is great for whenever your pastor needs verbal affirmation. They can simply go to the box or jar and pick one of the notes to read!
  • Picture of the staff with the pastor. You can provide this photo in a matte frame and have staff members leave a special message. This is a great gift idea that can be hung in his or her office and will be a constant reminder of the great community and support system the pastor has.
  • A journal with hidden messages inside. A fun gift is to purchase a journal and have people sign notes throughout the pages of the journal. While the pastor is using it, they will come across the notes hidden inside!
  • Congregational video. Your team can put together a video of people giving verbal affirmation to the pastor. This can also be a great timeline to show how far the church community has come together and allows an opportunity for them to share their stories.

Words are incredibly powerful and life-giving. You don’t have to keep it only on paper to verbally affirm your pastor during Pastor Appreciation Month! 

2. Honor during Sunday service

Another idea is to host a ceremony or block off a section of time during the Sunday service to honor your pastor. 

This is a great way to publicly honor the person who invests so much into the lives of many. You can cater the service or the ceremony to the personality of the pastor and make it really special for him or her. 

Often, during these ceremonies, it is a great time to present a gift, to pray a special prayer over the pastor, play a song they would appreciate, and publicly thank them. 

If you need more ideas and structure for how to present a Pastor Appreciation moment within your service or to create a ceremony, look to our Minister’s Suite. 

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3. Gifts

Another wonderful way to show your pastor appreciation is to give a gift. There are so many creative gifts one can give! 

Here are several ideas:

  • Gift cards to his or her favorite restaurant or coffee shop
  • Movie tickets for a date-night for the pastor to enjoy with his or her spouse 
  • A subscription to Audible or a different kind of audiobook
  • Gift card or certificates to his or her favorite stores
  • Technology (iPads, computer accessories, smart watch, and more)
  • Meaningful artwork
  • Food basket of their favorite snacks
  • Commemorative plaque

One thing to remember, though, with giving gifts, there are tax implications that go along with it.

For gift cards, certificates, and cash

Regardless of the amount on the card or certificate, gift cards and certificates are still subject to Federal Income Tax and Social Security. You can see the Treasury Regulation here.

Should your church decide to hand out any gifts in the form of cash or cash equivalents to the pastor, the gift would be treated as an honorarium. Honorariums are a form of compensation. 

The church would keep track of the amount and then report it on the pastor’s W-2 or 1099-MISC for the end of the year tax report. This is also applicable to any other pastor, employee, or contractor. 

It is also important to note that the recipient bears the burden to pay the tax on this gift when it comes time to pay taxes, per IRS regulations. This means, if Pastor Liz receives a $100 gift card to her favorite store and a $100 cash bonus, the church will file what they gave to Pastor Liz on her W-2 and the church’s bookkeeping records. At the end of the year, Pastor Liz will owe taxes on her gift card and cash bonus from the church. 

Unfortunately, the church cannot take on the responsibility for paying the taxes for it; only the person receiving it can. 

Love offerings collected for the pastor are also included in this category, according to the Internal Revenue Code (IRC) section 102(a). So if your congregation collects a love offering as an appreciation gift to the pastor, whether as cash or gift card, this too will be taxable and will need to be recorded on the W-2 form the pastor will receive. 

You can read further about how to effectively handle love offerings in a previous blog post here.

For physical gifts

Physical gifts like iPads, cell phones, computers, vehicles, and other items are still taxable. While they are not cash, these types of gifts are classified as Fringe Benefits and are still subject to taxes. For a full guide on what qualifies as a fringe benefit, take a look at the IRS Fringe Benefit Guide.

Publication 15(b) specifically walks through filing and reporting fringe benefits. The main thing to understand with fringe benefits is that the items are taxable based on their value.

This would mean, if Pastor Sam received an iPad from his church as an appreciation gift, he would pay taxes on the cash value of the iPad. Let’s say the iPad is valued at $1,200; Pastor Sam would have to pay taxes on the cash value of the iPad at the end of the year when he files his taxes. Along with Pastor Sam, the church would file that iPad as part of his fringe benefit compensation on his tax form. 

For any kind of fringe benefit, it is important for a church to have policies established within their organization for their staff. You can read more about that in a previous blog post here.

There are types of gifts that are not recorded under taxes, however!

Food is a great gift that is also not counted under taxes. So if you wanted to put together a basket of the pastor’s favorite snacks, not only would the pastor greatly appreciate it, they also don’t have to report it on their taxes!

Even if the gift is not taxable, the church should still catalog the expenses paid for the items within their bookkeeping records.

Our sincere thanks to you

As the Scripture listed at the top of the blog post suggests, we want to sincerely thank all pastors who have devoted their lives in service to the Lord. Thank you for the amazing work you all continue to do, and may God bless you, your families, and your ministries. 

As always, should your church be in any need of any help regarding compliance, or if you have questions related to taxes and bookkeeping, give our specialists a call at 877-494-4655 or click the button below to schedule a call.  

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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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