pastor's love offerings

[joeljj]

Local church collects money from members at Christmas time as a special offering for the pastors, then writes a check to the pastors disbursing the total amount collected as a "love offering". The members who designate this as a "love offering" gift can't claim it as a charitable deduction on Sch. A, but does the church need to include it as income to the pastors on the W-2's?

[ChEAr$]

Follow the money

Local church collects money from members at Christmas time as a special offering for the pastors, then writes a check to the pastors disbursing the total amount collected as a "love offering". The members who designate this as a "love offering" gift can't claim it as a charitable deduction on Sch. A, but does the church need to include it as income to the pastors on the W-2's?

If members write checks to the church, they have a charitable contribution. the church
then includes in W2.
In this case its a matter of temporarily increasing preacher's income in the form of a
taxable bonus.
Otherwise, the preacher might conveniently "forget" to include it as income.

Required Disclosure: I do not do preachers' tax returns since I don't trust any of them.

[veritas]

The answer is

yes. It is included as income.

[AJsTax]

charitable contribution

If members write checks to the church, they have a charitable contribution.

If they write the check to the church with a stipulation that it is for a particular person(s) they do not have a charitable contribution deduction. It does not matter if it is for a Pastor, missionary or a needy church family, it is considered a gift to the individual. If they donate to a fund then it is an allowable donation.
See 2008 Pub 17, chapter 24, page 161, "contributions to an individual"

[ChEAr$]

of course

If they write the check to the church with a stipulation that it is for a particular person(s) they do not have a charitable contribution deduction. It does not matter if it is for a Pastor, missionary or a needy church family, it is considered a gift to the individual. If they donate to a fund then it is an allowable donation.
See 2008 Pub 17, chapter 24, page 161, "contributions to an individual"

I know that; you know that, and all here know that.

But do you really think they are going to stipulate that on the check? (grin)

[JoshinNC]

Not to be "pithy"

I know that; you know that, and all here know that.

But do you really think they are going to stipulate that on the check? (grin)

but the OP stated that some parishioners did write on the check that it was a "love offering". So, yes, some will actually going to do that (especially if a smart pastor "asked" them to do that".

[Black Bart]

I cain't figger

why all you boys are makin' such a fuss about a little bit of nothin'.

It's been a while since I've dealt with such (my preacher at the Church of Parted Waters and Snake-handlers quit and went back to bein' a motorcycle cop two years ago), but ever'body knows that Love Offerin's are not taxable (the SE's bad enough without throwin' all that stuff in), are fully deductible (it's the thought that counts), and can be penciled in on a Wal-Mart rent-receipt slip (no use messin' with a W-2 for such triflin' stuff and besides, while the Great Master knows all, IRS doesn't.

[Larmil]

why all you boys are makin' such a fuss about a little bit of nothin'.

It's been a while since I've dealt with such (my preacher at the Church of Parted Waters and Snake-handlers quit and went back to bein' a motorcycle cop two years ago), but ever'body knows that Love Offerin's are not taxable (the SE's bad enough without throwin' all that stuff in), are fully deductible (it's the thought that counts), and can be penciled in on a Wal-Mart rent-receipt slip (no use messin' with a W-2 for such triflin' stuff and besides, while the Great Master knows all, IRS doesn't.

You are starting to sound like your brother, Bret.

[erchess]

Observations

1. When money is given to a charitable organization for the benefit of a specific individual it is as AJ pointed out considered a nondeductible gift to the individual. Charitable organizations that know the rules can get around this by setting up "funds" for this and that (eg to Bless the Staff and help hardship cases in the community) and put out the word that everything given to fund x today and next Sunday will go to Y because of Z.

2. Every dime a religious professional gets because of being in that profession is taxable for SE purposes and all except a designated housing allowance spent on allowable things is taxable for income tax purposes. That set of facts still leaves plenty of room for the conclusion that the Federal Government wishes to encourage and help out religious professionals.

3. If a dime goes through the Church it should be in Box One of the Professional's W2.

4. Most Religious Professionals also receive monies directly from people for whom they perform specific ceremonies. These monies should either be reported on Schedules C (against the costs of only these services) and SE or they should be given to the Church so that some can be withheld for FICA and FICA paid by the Church and of course the monies reported in Box One of the W2. The all too common pastoral practice of donating these monies to the Church and not reporting the monies at all for Tax Purposes may seem right to them but is not in accord with the Law.

5. I don't know where Harlan is coming from with his distrust of religious professionals. The ones I have dealt with have been anxious to follow the rules and stay out of trouble. I know that Harlan would not turn away someone who he believed to be desirous of a return that was as much to the clients' advantage as the law and the facts allowed.

[MAMalody]

<<<1. When money is given to a charitable organization for the benefit of a specific individual it is as AJ pointed out considered a nondeductible gift to the individual. Charitable organizations that know the rules can get around this by setting up "funds" for this and that (eg to Bless the Staff and help hardship cases in the community) and put out the word that everything given to fund x today and next Sunday will go to Y because of Z.>>>


This sounds like good tax planning to me. As long as the church has the discretion of how to distribute the funds, regardless of any designation, they are within the law to do this.


<<<2. Every dime a religious professional gets because of being in that profession is taxable for SE purposes and all except a designated housing allowance spent on allowable things is taxable for income tax purposes. >>>

There are other monies that are not taxable from a church to the "religious professional." Many churches have an accountable reimbursement policy which allows the pastor to receive monies from the church that are not taxable.


<<<3. If a dime goes through the Church it should be in Box One of the Professional's W2.>>>

This is not always the case. See above.


<<<4. Most Religious Professionals also receive monies directly from people for whom they perform specific ceremonies. These monies should either be reported on Schedules C (against the costs of only these services) and SE or they should be given to the Church so that some can be withheld for FICA and FICA paid by the Church and of course the monies reported in Box One of the W2. The all too common pastoral practice of donating these monies to the Church and not reporting the monies at all for Tax Purposes may seem right to them but is not in accord with the Law.>>>

Most pastors are considered dual status and do NOT have FICA withheld.


<<<5. I don't know where Harlan is coming from with his distrust of religious professionals. The ones I have dealt with have been anxious to follow the rules and stay out of trouble.>>>

This has also been my experience.

[Nashville]

The sad truth

5. I don't know where Harlan is coming from with his distrust of religious professionals.

Unfortunately, I DO know where Harlan is coming from, and although I would not gather the majority of ministers into that category, there are several who are dubious to their calling from the very git-go.

I don't imply that every minister should be perfect, but if you live in the rural south, you don't have to look very far to find the embodiment of the old song by Cher - "Grandpa'd do whatever he could -- preach a little gospel, sell a couple bottles of Dr. Good."

There are snake handlings, healing ceremonies and all manner of rituals based upon former Biblical events. Preachers who personally collect and deposit all the offerings, and engage in other occupations whose compatibility you would question. And who have been visited by the "Holy Ghost" to sell T-shirts and Jesus memorabilia. The summum achievement appears to be a chance to appear in front of lots of people and ask for donations. They will send you a "prayer cloth" which will increase your chance of being healed if you pray with it.

Occasionally, I am subject to run into all of the above in my tax dealings, and I think if you don't live in the "Bible belt" you don't realize just how much of this is out there. And my biggest problem with this is for those of us who are trying to be involved in decent church activity, and the majority of ministers trying to do their job, while all the time, large segments of our population are identifying them with religious charlatans.

The last thing we need on this board is a religious filibuster. But I offer this to those of you living in other parts of the country, and we in the southeast encounter this in our tax practice as these ministers, noble and otherwise, come to us for tax help. Nashville is often called the "Belt Buckle" of the Bible Belt - centrally located and home to many religious institutional headquarters and colleges. Black Bart and Harlan are right on in their portrayals. Erchess, considering your NC mountain home, you should know better.

[thomtax]

Another thing

First let me qualify that I am a church member and work to support our church, so I am not coming at this from an anti-religious standpoint.

I completely lose respect for the pastor that preaches that Christians are to obey the laws of the land. Then they stand around and brag about driving 15-20 mph over the speed limit. Do as the book says, but I'm special and the rules don't apply to me since I am on God's business.

LT

[Edsel]

Learnin' Channel

...had a documentary a few years ago about a New York journalist who was sent to the Sand Mountain area in NE Alabama to gather a story on snake handlings, speaking in tongues, cloves of fire, and a preacher's wife who was kept in the barn for punishment for not obeying her husband.

Journalist came down from the mountain, but they made a believer out of him. He was convinced "something supernatural is going on up there" but did not necessary agree where it was coming from.

Part of the reason why if I am approached by these "Holy Spririt people" I get scared.

People here think these folks are all over the country, not just in southern states. There are true and devout people calling themselves Christians and from other faiths everywhere, including the South. But I've been to all other parts of the country and these charlatans are almost non-existent.

Don't linger long on this - can get too far diverted from tax discussions. Plus, it might give you bad dreams.

[JohnH]

"Nothing wrong with snake handling in a church service, PROVIDED you're already on a first-name basis with the snake". (Rough paraphrase of part of a story told by southern comedian Jerry Clower)

[veritas]

I like that barn thing

... and a preacher's wife who was kept in the barn for punishment for not obeying her husband.

To bad I live in the city......sigh