For there is a proper time and procedure for every matter. Ecclesiastes 8:6. Congregational Treasurer s Manual

Transcription

1 For there is a proper time and procedure for every matter. Ecclesiastes 8:6 Congregational Treasurer s Manual

2 Copyright th Printing 2017 The Lutheran Church Missouri Synod 1333 S. Kirkwood Road St. Louis, MO Cover Photo: Erik M. Lunsford/The Lutheran Church Missouri Synod Printed in U.S.A.

3 Foreword Each one should use whatever gift he has received to serve others, faithfully administering God s grace in its various forms. This quote from 1 Peter 4:10 is especially applicable to the gift of administration for the church treasurer. This manual is dedicated for your use with your gift of administration to the glory of God. Regardless of its organizational size, the treasurer s position for a church or school is one of the most time-consuming and responsible jobs. The treasurer is expected to provide timely and reliable information to councils, boards and vot ers assemblies; to pay the bills on time; make certain adequate cash is available; to comply with complex and demanding payroll and tax requirements; handle administrative matters, and help the organization make responsible financial decisions for the benefit of its ministry. The treasurer truly must be the wise steward. This congregational manual is written for every treasurer, no matter what the level of expertise, and is organized into two volumes, containing six major sections: Employment Issues ; Federal and State Tax Matters ; Establishing and Administering the Organization ; Supporting Organizations ; Accounting and Finance ; and Insurance. Highlights include: Volume 1 and a comprehensive index that are updated annually (Volume 2, only as needed). A detailed table of contents for each chapter. Payroll and bookkeeping chapters that address tax, accounting and finance issues for the organization and its employees. Examples and filled-in forms of a sample congregation s bookkeeping system, including payroll forms and related federal tax reports. Recommended practices by the tax and legal counsel of the Synod for all Lutheran Church Missouri Synod congregations and schools. (Please note: These may not be the only methods of reporting taxes and payroll.) Volume 1 is being printed this year in large-scale quantities to replace the stale-dated material in previous editions. The CD has some of the forms illustrated in this manual available for interactive use. Inquiries regarding this manual can be addressed to the Accounting Department, The Lutheran Church Missouri Synod, 1333 S. Kirkwood Road, St. Louis, MO , or by calling You may also contact your district office, which is noted in Chapter 17. The Synod is unable to provide legal or tax counseling services so please consult with competent professionals in your area if a situation arises. Where text refers to the standard business mileage rate, this rate is currently 53.5 cents/mile (went into effect 1/1/17). Unfortunately, IRS had still not released the 2018 rate when this manual was being printed. As soon as it is available, we will update and post the new rate at lcms.org/resources. This resource was produced by the District Business Administrator s Association, the Office of the Treasurer and the Department of Accounting of The Lutheran Church Missouri Synod. Editing of this edition of the manual was done by Karen Sansone, director of Tax & Compliance in the Synod s Accounting Department, with assistance from Debbie Crites, business manager of the Kansas District; Marilyn Allen, business manager of the Northwest District; Linda Hagge, treasurer of the Texas District; Rick Marco, treasurer of the Minnesota South District; Cathy Korp, controller of the Pacific Southwest District; Denise Lo, Business Administrator of the California Nevada Hawaii District; and Sally Naglich, Business Manager of the English District. Additional assistance provided by Ross Stroh, executive director of Accounting, and Tani Berner of the Accounting Department. Thank you also is given to other department heads of The Lutheran Church Missouri Synod who provided information; congregational treasurers throughout the church who provided review comments; and the many others who encouraged the development of this manual. The Congregational Treasurer s Manual is published in a printed format and on CD, both available through your district office. It may also be viewed at lcms.org/ resources. Changes in tax law may affect accuracy of text. Copyrighted. All rights reserved. 10/17 Page 3

4 Page 4 10/17 Changes in tax law may affect accuracy of text. Copyrighted. All rights reserved.

5 The Lutheran Church Missouri Synod Congregational Treasurer s Manual VOLUME 1 Contents SECTION 1 EMPLOYMENT ISSUES Paragraph Page Chapter 1 Ministers of the Gospel Status Employee or Self-Employed Income, Social Security and Medicare Taxes Employment of Retired Ministers of the Gospel IRS Rulings Chapter 2 Housing Allowance and Parsonage Introduction Eligibility Housing Allowance Parsonage Substantiation and Disclosure Self-Employment Tax Reporting Requirements Sample Housing Allowance Resolutions Chapter 3 Lay Employees Classification Taxes Allowances and Other Compensation Chapter 4 Concordia Plans Introduction to Benefit Programs Administered by Concordia Plan Services Summary of Benefit Plans Administration Other Programs Tax Aspects Data Match Project (Centers for Medicare and Medicaid Services) Health Care Reform IRS Ruling Chapter 5 Tax-Favored Savings Plans Introduction Tax-Sheltered Annuities Individual Retirement Accounts Educational Savings Health Savings Accounts Chapter 6 Business Expenses Introduction Chapter 7 Payroll and Other Information Returns Introduction Cafeteria Plans Payroll Returns Other Information Returns Employer-Provided Automobiles Changes in tax law may affect accuracy of text. Copyrighted. All rights reserved. 10/17 Page 5

6 SECTION 2 FEDERAL AND STATE TAX MATTERS Paragraph Page Chapter 8 Tax-Exempt Status Introduction IRS Rulings Chapter 9 Lutheran Schools and Early Childhood Centers Employee Tuition Reduction Funding Other Compensation Chapter 10 Contributions by Donors Introduction What Is a Contribution? Timing of the Contribution Qualified Organizations Reporting Contributions Gifts of Securities Benevolence Funds Receipting Contributions for Other Entities ( A Caution ) Gifts from Persons Who Later Declared Bankruptcy Chapter 11 Unrelated Business Income Introduction Chapter 12 Tax and Compliance Matters Unique to States Introduction Annual Reporting State/Municipal Taxes Unemployment Tax Worker s Compensation Listing of State Withholding Tax Offices/Departments of Revenue New Hire Reporting Raffles, Bingo and Other Games of Chance Information and Forms for Compliance Locally SECTION 3 ESTABLISHING and ADMINISTERING the ORGANIZATION Paragraph Page Chapter 13 Organizing and Incorporating Introduction Incorporation Organizational Documents Corporate Reporting Fiscal Year Registered Agent Closing a Congregation Additional Information Page 6 10/17 Changes in tax law may affect accuracy of text. Copyrighted. All rights reserved.

7 Chapter 14 Responsibilities of Church Financial Officers Introduction Conflict of Interest Job Descriptions Fiduciary Responsibilities Chapter 15 Purchasing Agreements Introduction Group Purchasing Agreement Preferred Pricing Agreement Chapter 16 Computerized Systems (or) Technology Introduction Analyzing Needs and Wants Software Applications Computer Hardware CPH Church Management Software SECTION 4 SUPPORTING ORGANIZATIONS Paragraph Page Chapter 17 Synod International Center and District Offices Communication Services Synod Membership International Center (Synod Office) International Center Budget District Offices District Budget Organizational Chart Chapter 18 Planned Giving and Investment Services Introduction to the LCMS Foundation LCMS Foundation Services LCMS Foundation Gift Planning Counselors LCMS Foundation Associate & Specific Ministry Gift Planning Counselors Chapter 19 Church Extension Fund Introduction Investment Opportunities Loans Ministry Support Gift Planning Stewardship Resources LCEF s Signature Sponsorship Series District Church Extension Fund Contacts GLOSSARY (Volume 1) BLANK FORMS (Volume 1) Changes in tax law may affect accuracy of text. Copyrighted. All rights reserved. 10/17 Page 7

8 VOLUME 2 SECTION 5 ACCOUNTING and FINANCE Paragraph Page Chapter 20 Internal Control The Need for Internal Control What Is Internal Control Internal Control Plan Chapter 21 Chart of Accounts GAAP Accounting for Non-Profits Typical Funds Chart of Accounts Expenditures Expense Account Classifications by Description of Expenditures Chart of Accounts Detailed Chapter 22 Budgeting Introduction Budget Preparation Budget Process Budget Calendar Sample Budgets Payroll Budget Chapter 23 Accounting Applications Journals and Ledgers Sample Filled-in Reports Record Retention Accounting Applications Assets Liabilities Net Assets (Fund Balance or Equity) Support and Revenue Expenses and Losses Chapter 24 Financial Statement Reporting Statements and Reports Chapter 25 Financial Review Introduction and Purpose Congregational Internal Control Review General Financial Review Program The Financial Review Program (Test of Transactions) Sample Financial Review Letter to Congregation Page 8 10/17 Changes in tax law may affect accuracy of text. Copyrighted. All rights reserved.

9 SECTION 6 INSURANCE Paragraph Page Chapter 26 Risk Management and Insurance Introduction Types of Insurance to Purchase and Consider Optional Lines of Coverage to Consider Claims Loss Control and Safety General Information RESOURCES GLOSSARY (Volume 2) BLANK FORMS (Volume 2) INDEX (Volumes 1 & 2) Changes in tax law may affect accuracy of text. Copyrighted. All rights reserved. 10/17 Page 9

10 Page 10 10/17 Changes in tax law may affect accuracy of text. Copyrighted. All rights reserved.