"Any CPA is a good CPA for Pastors." Actually, since pastors fall under IRS special rules, which shift and change yearly, only a CPA who is staying up-to-date on these rules will be able to bring value to you as a minister. Too often, CPAs are filing returns for pastors under general rules, and in turn, are causing them to pay more taxes than necessary. Having a tax preparer that has a background and experience in ministerial tax returns is critical if you are going to have the most accurate and financially viable tax return.
For example, a pastor in Florida sent his wife to file their taxes at a local chain retail tax service. This minister made $42,000 per year. Almost all of the income was deemed housing allowance. However, because the tax preparer did not fully understand the housing allowance, they preparer said the minister owed $2000 in taxes. The minister went back to the tax preparer, educated him on the housing allowance deduction, and got back $4000! That is a $6000 swing that this pastor and his wife would have lost because they used the wrong kind of CPA.
According to the Housing Clarification Act of 2002, a minister may claim up to 100% of his or her total income as housing allowance, if the minister has the proper proof of substantiation. Yet, many tax preparers believe that only up to 50% of the pastor's total income can be deemed housing allowance. This misinformation is based on old laws and myths that cause pastors to pay more than their fair share of taxes.
A common error that pastors believe is, "If they call themselves a tax professional, then they must be 'certified'." However, often that is not the case. Many tax returns are prepared by people who claim to be professionals, but are not "Certified" Public Accountants.
Through either the "grape vine", or through misinformation, many pastors believe that they have no tax responsibility and therefore, erroneously, never seek to report or pay their legal amount of taxes, leaving them liable for serious penalties or worse. This has even been advanced by well-meaning, yet uninformed CPAs. It is important that whichever tax preparer you use understand the proper filings required for pastors, such as Form 941, Form 4361, and the appropriate place to document the housing allowance on the pastor's W-2 forms. Additionally, the fundamental misunderstanding many pastors have is that a "love offering" is non-taxable income. However, this is not true. The IRS has ruled that "love offerings" are considered as taxable income. This has led many pastors down the path of inadvertent tax evasion. Couple this with having a CPA who does not have an accurate understanding of today's financial and legal landscape, an uninformed or out-of-touch CPA can do much harm to a pastor's financial status.
Many pastors believe that their CPA is the one held responsible, but this, too, is untrue. Upon signature of the tax return, the minister assumes full responsibility for the accuracy of the return and falls under perjury laws in some cases.
There is no set standard pricing for personal tax returns. CPA's can charge whatever they like for a personal tax return, without any additional schedules created for your return. Further, just because someone is a "high-priced CPA" does not automatically mean that he or she is the best for your specific situation. Generally speaking, the more geared towards pastors a CPA's training is, the more beneficial to you he or she will be.
The Bible says that there is wisdom in advisors. Many pastors look to their tax preparer in hopes that he/she will assist them in developing a personal tax strategy. Recently, a pastor was processing through a proposed upcoming raise from his local church. Before the board voted on the new numbers, the pastor felt it was best to run the numbers by his StartCHURCH CPA. This proved correct when his StartCHURCH CPA reviewed and confirmed that those numbers were advantageous and gave insight into reducing his overall tax burden. Unfortunately, not all ministers have that same experience with their tax preparer. A proper understanding of your tax professional's role is that there is more to your relationship with your tax preparer than a once-per-year visit. While your tax return might be filled out once per year, your taxes really are a result of your day-to-day decisions. Having a CPA that is familiar with your specific circumstances and is available for tax advice throughout the year is the best bet in making sure that you are taking advantage of every law possible.
A great question to ask yourself when looking for the right tax preparer is, "Is this person available for tax advice?" Many, many tax return professionals disappear for 9 months out of the year. If you have questions, these companies are almost impossible to reach during their "non-tax" hours.
No one ever likes being audited. Yet, 1000's of tax payers will go through some kind of an audit this year. This is usually a long and quite arduous process. Many pastors believe that if they were to get audited, they would have automatic assistance from their CPA. This, however, is not true. Many tax preparers offer no assistance beyond the filing of your tax return. A poor tax strategy is having your tax return prepared by a seasonal department of a chain retailer who will not be there in the case of an audit. With the StartCHURCH Minister's Tax Return Service, you can rest assured that, should the need arise, you will receive the assistance you require. With the StartCHURCH Minister's Tax Return Service, you will not be alone in an IRS audit.
There is a myth that many pastors believe that if they did not make profit on their stock trades, then there is no need to report that activity on a Form 1099. However, that is simply not true. The IRS will assume that 100% profit was made if not recorded properly on the right 1040 Schedule D, which reflects the bases of the stocks sold. Having a tax preparer that knows both the common streams of income and the additional ones is a step in the right direction to making sure your reporting is both legally accurate and fiscally sound.
A clear misunderstanding on reporting can be seen in the frequency of how many pastors "round up" their itemized deductions for their returns. Oftentimes, a pastor will write "40,000" for his mileage, but that is usually not accurate. Seeing that on your return creates skepticism for the IRS and can potentially lead to an audit. It is important that your tax preparer understand the IRS and what is required for your return to be an accurate statement of your numbers as well as meeting all of the IRS requirements.
Our Services Include:
- Specialized ministerial-focused tax return preparation*
- Strategized housing allowance
- Find every possible deduction for ministers
- Find possible earned income credit for each minister
*This isn't just exclusive to minister's income. All income is included.
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You guys have been such a blessing to us. It has been so easy taking care of payments and documents. We feel so safe working with StartCHURCH.
Krystal, You are one of the best people I have talked to! You are so helpful. God assigned you to speak to me today! To talk to a person who understands where I am at and what my needs are is such a blessing. Thank you so much for taking the time to help me.
You have a wonderful product that we highly recommend to any church that is serious about "the business side" of their church. You have designed a plan that is so needed for the body of Christ. We purchased the Complete State Edition, and it had everything we needed all the way to the 501(c)(3). We sent our packet to the IRS on December 30, and received our letter of determination on February 11th with no additional questions asked. We followed the plan just like you have it outlined. I must commend you for this excellent product. We saved thousands of dollars using your plan. We have also purchased your church management software and it has been a blessing likewise.
Praise God, Pastor Raul. Thanks be to God and I thank God for you and your Blessed Staff. You are a blessing to the body of christ I pray that God keep blessing you and your family and your staff and business I look forward to meeting you and thank you, my brother.
I want to start by telling you that the seminar in Chicago yesterday was an experience that I will NEVER forget. Its awesome when men and women of God are so anointed and let God guide them in what to do for his kingdom. The training and teaching was wonderful and Pastor Raul Rivera made us all feel comfortable and at ease and made it easy for us to understand all the lingo and wording to a level of comprehension where we all can apply it to our self and train our church in how to organize and run Gods kingdom with a good testimony for the world to see. David, Pastors Raul assistant he was wonderful to work with and we thank him for allowing us to help him pack up the materials and we hope that he made his flight. I traveled with my Pastor Alexie Martinez and also with Sister Ruthy Santiago. We left their with so much information and we will use this to better our churches and as well get a few of them together to send for Pastor Raul Rivera to bring them this knowledge and gift from God. All I can say is Thank You and be blessed
We had a severe hard drive crash that caused us to lose everything including the products that we purchased from StartCHURCH. I called StartCHURCH and spoke with Raul and explained the situation. Within 2 days I received a copy on a CD. You guys are the absolute best when it comes to crisis management, and your products are top notch. God bless you all at StartCHURCH, and thank you so much for your fast response.