MISTAKES CHURCHES OFTEN MAKE

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 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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