MISTAKES CHURCHES OFTEN MAKE

Apr 1

1. Improperly classifying employees as self-employed (Independent Contractors)

2. Failing to send a Form W-2 to each employee, minister and/or a Form 1099-Misc to

certain non-employees

3. Failing to include taxable fringe benefits (such as non-accountable expense

reimbursements, social security supplements, and “special occasion" gifts) in wages

on Forms W-2

4. Including the minister’s housing allowance in wages (Box 1 ) on Form W-2

5. Failing to offer church employees available nontaxable fringe benefits

6. Failing to provide church employees with an accountable expense reimbursement

plan.

7. Funding an accountable reimbursement plan for employee compensation

8. Providing contribution receipts to members who donate their services to the church

9. Providing contribution receipts for donations designated to other individuals without

proper organization control

10. Failure by churches that operate, supervise, or control a private school to timely file

an annual Certificate of Racial Nondiscrimination (Form 5578)

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