Accessible Home design vs. Assisted Living. A graphic cost and benefit analysis for children with aging parents can use to discuss long term living and investment strategies for the benefit of all.
On January 10th, Auburn’s Center for the Study of Theological Education hosted a webinar for financial aid officers, admissions staff and student personnel at theological schools on the latest government regulations for income-based repayment plans for federal educational loans. This information will assist financial aid officers and others who counsel students and recent graduates in repayment options as they move into ministry.
Accessible Home design vs. Assisted Living. A graphic cost and benefit analysis for children with aging parents can use to discuss long term living and investment strategies for the benefit of all.
On January 10th, Auburn’s Center for the Study of Theological Education hosted a webinar for financial aid officers, admissions staff and student personnel at theological schools on the latest government regulations for income-based repayment plans for federal educational loans. This information will assist financial aid officers and others who counsel students and recent graduates in repayment options as they move into ministry.
Importance of understanding your finances, your income and understanding your pay stub are covered in Part 1 of the of the 6-part Money Matters series created by the Athens-Clarke County Library. Money Matters is part of Smart investing @ your library®, and is brought to you by a joint grant from the American Library Association and FINRA, the Financial Regulatory Authority Foundation.
Demystifying Aged Care Planning:
The Aged Care system is complex.
You don’t need to be an expert but you should have a broad understanding of the issues.
Seek professional advice before you are forced into making decisions that you may regret.
Better lifestyle and financial decisions are made when planning starts early.
Here is a fabulous tool you might find useful for your individual tax return preparation.
This document contains key numbers and tax rate tables for 2011 and 2012.
A compilation of key financial and tax numbers. It thought this would be helpful to my financial services, CPA and attorney friends. But it is good information really for anyone. Feel free to download and share.
The sun is potentially setting on the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. If the law expires as expected January 1, 2013, some estate planning and gifting opportunities will no longer exist. The options still available prior to the New Year will be the focus of a complimentary seminar presented by Chambliss attorneys Mark Addison, Ryan Barry, Dana Perry, and Greg Willett.
Federal and Tennessee Gifting Opportunities
An overview of the current lifetime gifting options provided by the 2010 Tax Act and the changes if Congress does not extend the 2010 Tax Act by the end of 2012.
Spousal Lifetime Access Trusts ("SLATs")
An overview of the use of Spousal Lifetime Access Trusts and other common techniques for capturing the current $5.12 million federal unified credit prior to its potential expiration on January 1, 2013.
The New Landscape of Gift and Inheritance Taxes in Tennessee
A discussion on the new laws affecting the Tennessee gift and inheritance taxes along with a discussion of potential pitfalls Tennessee residents may face when dealing with these issues.
Differences in Federal and Tennessee Gift Tax Structure
Practical examples illustrating how the two tax structures differ and what it means for you.
Retirement Planning- Case studyPart 1A) SMART Goal Setting.docxronak56
Retirement Planning- Case study
Part 1
A) SMART Goal Setting
Specific
What: They should to achieve debt freedom and save enough money before age 65. They supposed to decrease his daily expense to save more money, to pay off the current loan and some credit debts. Then they need to start RESPs for their children.
Why: Their Net cash flow was negative, it means they have more expense than income. They must find a way to solve these problem, even through they have 308879.63 net worth, but it is useless. They have too many loan and mortgage need to repayment.
Where: They should focus on house mortgage first, because that $300000 mortgage with interest rate is 4.75%.
Who: their children. When they do this financial planning, their kids is inherently involved in.
Which: They have some constraints which is that they need to pay education for kids, they have economic pressure, so saving money is hard thing for them.
Measurable:
They want to save $2000 per month to pay off their mortgage $1897.57 monthly.
Achievable:
We suggest saving money from Entertainment and Transportation.
· Yearly expense
Travel $120, Activities $360, Alcohol $120 totally is $600
We also can decrease expense form car insurance, Colin and Jill can use one car and suspend the car insurance saving $1440 yearly.
They already saving $2040 for one year.
Realistic:
That is realistic because they can easily to save money form their income, they need to know how to budgeting their money, especially they already have two kids.
Time-Limited:
They will save money form their daily life for $2040 for one year, their yearly mortgage is $1897.57*12= $22770.84, they need to saving 10 years money to pay off one year mortgage.
B) Cash Flow Statement & Net Worth Statement
According to the expense statement for retirement planning, I estimate the expense after Colin and Jill retirement is $28546.68. It means they need income after tax is same amount.
Electricity/water: When they are after 65 year old, they should sleep so early that compare with before. That’s why their electricity usage rate is going down. Change $150 to $100 per month
Internet: they don’t use internet after 65 years old, because they always watching TV or reading book, no time to use internet. Change $100 to $50 per month
Groceries: it will change some because they want to be health, and will buy many nourishment and fruits,and more milk. Not changed.
Eat-out: eat-out cost will be decrease, they usually cook at home. Change $100 to $50 per month
Colin&Jill car insurance: They don’t need two cars for driving, so they can just drive one car with one car insurance, so the cost will be decrease. Decrease $110 per month
Gas fee: gas cost also decrease because two cars in stead of one car.
Medical: Colin has high blood pressure, his medicines cost will increase.
Travel: Colin and Jill like to long-distance travel every month,so that’s why travel cost is increased. Change $50 to $ ...
2017 TORONTO Fall Event - Proposed Tax Reform: What You Need to Know (October...Nicola Wealth Management
On October 1, 2017, NWM hosted a group of clients at the Four Seasons Hotel Toronto to discuss Finance Minister Bill Morneau and the Canadian government's proposal for tax reform impacting the majority of Canadian business owners.
NWM President, David Sung, opened the evening with an overview of the proposed tax changes. He provided some context and asked the audience to consider the political undertone of the Liberal government's tax proposal and the way in which they have handled the public push-back.
John Nicola, Chairman & CEO, an overview of what the government is proposing exactly and the impact it will have. He went on to discuss some planning options available to Canadian business owners.
Importance of understanding your finances, your income and understanding your pay stub are covered in Part 1 of the of the 6-part Money Matters series created by the Athens-Clarke County Library. Money Matters is part of Smart investing @ your library®, and is brought to you by a joint grant from the American Library Association and FINRA, the Financial Regulatory Authority Foundation.
Demystifying Aged Care Planning:
The Aged Care system is complex.
You don’t need to be an expert but you should have a broad understanding of the issues.
Seek professional advice before you are forced into making decisions that you may regret.
Better lifestyle and financial decisions are made when planning starts early.
Here is a fabulous tool you might find useful for your individual tax return preparation.
This document contains key numbers and tax rate tables for 2011 and 2012.
A compilation of key financial and tax numbers. It thought this would be helpful to my financial services, CPA and attorney friends. But it is good information really for anyone. Feel free to download and share.
The sun is potentially setting on the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. If the law expires as expected January 1, 2013, some estate planning and gifting opportunities will no longer exist. The options still available prior to the New Year will be the focus of a complimentary seminar presented by Chambliss attorneys Mark Addison, Ryan Barry, Dana Perry, and Greg Willett.
Federal and Tennessee Gifting Opportunities
An overview of the current lifetime gifting options provided by the 2010 Tax Act and the changes if Congress does not extend the 2010 Tax Act by the end of 2012.
Spousal Lifetime Access Trusts ("SLATs")
An overview of the use of Spousal Lifetime Access Trusts and other common techniques for capturing the current $5.12 million federal unified credit prior to its potential expiration on January 1, 2013.
The New Landscape of Gift and Inheritance Taxes in Tennessee
A discussion on the new laws affecting the Tennessee gift and inheritance taxes along with a discussion of potential pitfalls Tennessee residents may face when dealing with these issues.
Differences in Federal and Tennessee Gift Tax Structure
Practical examples illustrating how the two tax structures differ and what it means for you.
Retirement Planning- Case studyPart 1A) SMART Goal Setting.docxronak56
Retirement Planning- Case study
Part 1
A) SMART Goal Setting
Specific
What: They should to achieve debt freedom and save enough money before age 65. They supposed to decrease his daily expense to save more money, to pay off the current loan and some credit debts. Then they need to start RESPs for their children.
Why: Their Net cash flow was negative, it means they have more expense than income. They must find a way to solve these problem, even through they have 308879.63 net worth, but it is useless. They have too many loan and mortgage need to repayment.
Where: They should focus on house mortgage first, because that $300000 mortgage with interest rate is 4.75%.
Who: their children. When they do this financial planning, their kids is inherently involved in.
Which: They have some constraints which is that they need to pay education for kids, they have economic pressure, so saving money is hard thing for them.
Measurable:
They want to save $2000 per month to pay off their mortgage $1897.57 monthly.
Achievable:
We suggest saving money from Entertainment and Transportation.
· Yearly expense
Travel $120, Activities $360, Alcohol $120 totally is $600
We also can decrease expense form car insurance, Colin and Jill can use one car and suspend the car insurance saving $1440 yearly.
They already saving $2040 for one year.
Realistic:
That is realistic because they can easily to save money form their income, they need to know how to budgeting their money, especially they already have two kids.
Time-Limited:
They will save money form their daily life for $2040 for one year, their yearly mortgage is $1897.57*12= $22770.84, they need to saving 10 years money to pay off one year mortgage.
B) Cash Flow Statement & Net Worth Statement
According to the expense statement for retirement planning, I estimate the expense after Colin and Jill retirement is $28546.68. It means they need income after tax is same amount.
Electricity/water: When they are after 65 year old, they should sleep so early that compare with before. That’s why their electricity usage rate is going down. Change $150 to $100 per month
Internet: they don’t use internet after 65 years old, because they always watching TV or reading book, no time to use internet. Change $100 to $50 per month
Groceries: it will change some because they want to be health, and will buy many nourishment and fruits,and more milk. Not changed.
Eat-out: eat-out cost will be decrease, they usually cook at home. Change $100 to $50 per month
Colin&Jill car insurance: They don’t need two cars for driving, so they can just drive one car with one car insurance, so the cost will be decrease. Decrease $110 per month
Gas fee: gas cost also decrease because two cars in stead of one car.
Medical: Colin has high blood pressure, his medicines cost will increase.
Travel: Colin and Jill like to long-distance travel every month,so that’s why travel cost is increased. Change $50 to $ ...
2017 TORONTO Fall Event - Proposed Tax Reform: What You Need to Know (October...Nicola Wealth Management
On October 1, 2017, NWM hosted a group of clients at the Four Seasons Hotel Toronto to discuss Finance Minister Bill Morneau and the Canadian government's proposal for tax reform impacting the majority of Canadian business owners.
NWM President, David Sung, opened the evening with an overview of the proposed tax changes. He provided some context and asked the audience to consider the political undertone of the Liberal government's tax proposal and the way in which they have handled the public push-back.
John Nicola, Chairman & CEO, an overview of what the government is proposing exactly and the impact it will have. He went on to discuss some planning options available to Canadian business owners.
The Impact of the Tax Cuts & Jobs Act on High Tax Bracket Individuals - Show ...gppcpa
Objective: To quantify the effects of the Tax Cuts & Jobs Act for taxpayers in the highest individual tax bracket; to quantify the effects of the increase in the lifetime estate and gift tax exemption for taxpayers at all levels of wealth; and to identify the challenges and opportunities available for taxpayers as a result of these changes.
Join Commute Seattle for an informative workshop to learn how employers and commuters can take advantage of commuter benefit programs to save on federal and
state taxes, increase employee spending power, and make commuting to work more affordable, convenient and sustainable.
Learn about:
• Federal tax qualified transportation fringe benefits:
• Recent increases in transit, vanpool and parking fringe benefit spending limits
• Pre-tax accounts and ORCA business options
• Tax-free bicycle commuter benefits
• WA state business & occupation tax credits for commute trip reduction activities
• Parking cash-out programs, Zipcar for Business, Rideshare Online incentives and other taxable transportation benefits
On October 5, 2017, NWM hosted a group of over 500 people at the Fairmont Hotel Vancouver to discuss the Finance Minister Bill Morneau and the Canadian government's proposal for tax reform impacting the majority of Canadian business owners.
NWM President, David Sung, opened the evening with an overview of the proposed tax changes. He provided some context and asked the audience to consider the political undertone of the Liberal government's tax proposal and the way in which they have handled the public push-back.
John Nicola, Chairman & CEO, an overview of what the government is proposing exactly and the impact it will have. He went on to discuss some planning options available to Canadian business owners.
The IRS has announced its 2015 annual increases for employee benefits and contributions across a wide spectrum of tax-qualified programs. The following table summarizes many of the limitations as applicable to employee benefit plans. For more information, details of the 2015 inflation adjustments are outlined in IR 2014-99.[i]
http://www.orlandotaxcoach.com/
Small business owners typically make these 10 tax related mistakes. Avoiding these mistakes all starts with proper tax planning including choosing the right business entity and maximizing your tax deductions.
Creating an Invite Culture - Highrock Quincy Retreat 2016-01-30Jason Condon
Workshop Handout from the Highrock Quincy Retreat 2016-01-30 at Pilgrim Pines Campground on the East Coast Conference of the Evangelical Covenant Church.
Understanding Covenant Church PlantingJason Condon
Presentation with Q&A discussion introducing the principles and practices of Covenant Church Planting in Evangelical Covenant Church. Facilitated by Michael Carrion & Jason Condon at Midwinter 2015, Denver CO.
Discover the innovative and creative projects that highlight my journey throu...dylandmeas
Discover the innovative and creative projects that highlight my journey through Full Sail University. Below, you’ll find a collection of my work showcasing my skills and expertise in digital marketing, event planning, and media production.
Taurus Zodiac Sign_ Personality Traits and Sign Dates.pptxmy Pandit
Explore the world of the Taurus zodiac sign. Learn about their stability, determination, and appreciation for beauty. Discover how Taureans' grounded nature and hardworking mindset define their unique personality.
Explore our most comprehensive guide on lookback analysis at SafePaaS, covering access governance and how it can transform modern ERP audits. Browse now!
Remote sensing and monitoring are changing the mining industry for the better. These are providing innovative solutions to long-standing challenges. Those related to exploration, extraction, and overall environmental management by mining technology companies Odisha. These technologies make use of satellite imaging, aerial photography and sensors to collect data that might be inaccessible or from hazardous locations. With the use of this technology, mining operations are becoming increasingly efficient. Let us gain more insight into the key aspects associated with remote sensing and monitoring when it comes to mining.
As a business owner in Delaware, staying on top of your tax obligations is paramount, especially with the annual deadline for Delaware Franchise Tax looming on March 1. One such obligation is the annual Delaware Franchise Tax, which serves as a crucial requirement for maintaining your company’s legal standing within the state. While the prospect of handling tax matters may seem daunting, rest assured that the process can be straightforward with the right guidance. In this comprehensive guide, we’ll walk you through the steps of filing your Delaware Franchise Tax and provide insights to help you navigate the process effectively.
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
RMD24 | Retail media: hoe zet je dit in als je geen AH of Unilever bent? Heid...BBPMedia1
Grote partijen zijn al een tijdje onderweg met retail media. Ondertussen worden in dit domein ook de kansen zichtbaar voor andere spelers in de markt. Maar met die kansen ontstaan ook vragen: Zelf retail media worden of erop adverteren? In welke fase van de funnel past het en hoe integreer je het in een mediaplan? Wat is nu precies het verschil met marketplaces en Programmatic ads? In dit half uur beslechten we de dilemma's en krijg je antwoorden op wanneer het voor jou tijd is om de volgende stap te zetten.
What are the main advantages of using HR recruiter services.pdfHumanResourceDimensi1
HR recruiter services offer top talents to companies according to their specific needs. They handle all recruitment tasks from job posting to onboarding and help companies concentrate on their business growth. With their expertise and years of experience, they streamline the hiring process and save time and resources for the company.
Unveiling the Secrets How Does Generative AI Work.pdfSam H
At its core, generative artificial intelligence relies on the concept of generative models, which serve as engines that churn out entirely new data resembling their training data. It is like a sculptor who has studied so many forms found in nature and then uses this knowledge to create sculptures from his imagination that have never been seen before anywhere else. If taken to cyberspace, gans work almost the same way.
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Cracking the Workplace Discipline Code Main.pptxWorkforce Group
Cultivating and maintaining discipline within teams is a critical differentiator for successful organisations.
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In this deck, you will learn the significance of workplace discipline for organisational success. You’ll also learn
• Four (4) workplace discipline methods you should consider
• The best and most practical approach to implementing workplace discipline.
• Three (3) key tips to maintain a disciplined workplace.
1. $treet $mart Finance$
for Covenant Pastors
Facilitated by: Elliott Johnson, Controller;
& Assistant Director of Pensions
Today we will be
covering the
following topics:
H. Financial & Tax Issues for Ministers
I. Covenant Benefit Programs
J. Investment/Retirement Considerations
K. Covenant Financial Resources
2. Objectives for this seminar
A. Discuss financial & tax issues pertaining to
those serving as ministers. What you need
to know about:
Financial reporting-budgets
Compensation
Taxes/Self-employment taxes
Housing allowance
Ministerial expenses
3. Objectives for this seminar
Covenant Benefit Programs
Pension Plan
Bethany Benefit Service
C. Investment Considerations
Retirement Planning
D. Covenant Financial Resources
Covenant Trust Company
National Covenant Properties
E. Q & A
4. Resource Materials
Handouts:
Retirement Planning for Covenant Pastors &
Missionaries
Minister’s Guide for Income Tax – Conrad Teitell
Covenant Pension Plan – Summary Plan Description
Covenant Pension Plan – “All you wanted to know…”
Bethany Benefit Service –An Overview
Covenant Trust Company
National Covenant Properties
Resource Materials:
The 2011-12 Compensation Handbook for Church
Staff –Cobble & Hammer
Church & Clergy Tax Guide – Richard R. Hammer
5. Glossary of Definitions
SECA – Self-Employment Contributions Act for Social Security
purposes. Paid by the self-employed individual at the rate of 12.4%.
(For 2011 only, rate is 10.4%)
FICA - Taxes on non-self-employed persons for Social Security
purposes is paid equally by the employee and the employer at 6.2%
each. (Except for 2011, employee pays only 4.2%)
SECA Medicare Tax - Paid by the self-employed individual at
the rate of 2.9%.
Medicare Taxes - Paid equally by the employee and the
employer at 1.45% each.
Housing Allowance - The amount of compensation that a
pastor designates prior to the beginning of each year and has the
church pay is not subject to income tax up to certain limitations. The
designation of the housing allowance must be approved by the church
council prior to the year starting.
6. Definitions continued
Parsonage - The church furnishes a pastor a church-owned
home to live in during their employment. The pastor is required
to pay SECA taxes on the fair rental value of the parsonage.
Accountable Expense Plans – A church requires the
pastor to submit documentation for reimbursement of expenses
and mileage.
Non-accountable Expense Plans – Churches pay the
pastor a set amount each month for items such as books or
auto expense. They amounts are taxable to pastor. These can
be deducted as unreimbursed employee expenses as itemized
deductions.
7. Definitions continued
Retirement Plans
IRA – Individual Retirement Account.
There are 2 types:
Regular IRA, which allows you to reduce your taxable income
on your tax return. Any withdrawals are taxable and must start
by age 70 ½.
Roth IRA: does not allow you a current reduction of taxable
income, but withdrawals are tax free (including earnings) and
are not forced by age limits (i.e. do not have required
distributions).
8. Definitions continued
Employer Retirement Accounts.
There are 2 types:
Defined contribution accounts such as 401k
(generally for-profit companies) and 403b for non-profit
companies. These accounts are structured so that each account
is yours personally and any earnings or losses are credited to
your account based on your investment decisions. This can also
be done as a “Roth.”
Defined benefit accounts are accounts set up by
employers that pay a pension to you based on years of service
and your salary. All investment decisions are made by the
employer.
9. Financial Reporting
Tips for Ministers
Don’t be intimidated by accounting reports.
The goal is not accounting expertise—it’s
leadership.
A leader’s job is not to calculate a profit and
loss statement. A leader’s job is to know how
to read and then use the information to make
leadership decisions.
Get help where you need it. The only “dumb
question” is the one you don’t ask.
10. Financial Reporting
Tips for Ministers
Things to consider:
“Tone at the top” regarding accountability.
People are watching!
Internal controls, checks and balances.
Qualifications of staff. Is outside help needed and
if so, how often and for what purposes?
Budgeting.
Financial reporting, monitoring process.
Risks of fraudulent reporting and/or
misappropriation of assets (stealing in a church?!)
11. Financial Reporting
Tips for Ministers
Remember that for management purposes,
there is no “right” or “wrong” system per se –
use what works best in your situation.
Goals of financial reporting:
Measure financial performance and monitor
changes therein.
Target operational changes.
12. Scriptural
Considerations
Maintain a high level of public accountability -
2 Cor. 8:20-21.
Keep fiscal behavior above reproach –
Acts 24:16, 1 Cor. 4:2.
Ensure that dollars remain the servant and
not the master of the ministry –
Matt. 6:24, 33.
Remember that “counting the
cost” is a biblical principle –
Luke 14:28-30.
13. Compensation
What’s considered taxable?
Base salary.
Non-accountable expense
reimbursements.
Reimbursement of non-deductible
moving expenses.
Special occasion “gifts” from the church.
Social Security supplement (for pastors).
(cont.)
14. Bargain purchase of church property.
Personal use of church-provided
automobiles.
Annual lease valuation rule
Taxation of automobile allowances
Premiums on group term life insurance
in excess of $50,000 (BBS $100,000).
15. What’s considered non-taxable?
Accountable expense reimbursements.
Group term life insurance of $50,000 or
less.
Group insurance premiums paid by
church.
403 (b) contributions.
Qualified moving expenses.
Parsonage or housing allowance.
Cafeteria (I.R.C. Sec. 125) plans,
medical reimbursement plans.
Contributions to Covenant Pension Plan.
16. Example of Pastor vs
Non-Pastor Taxes
Pastor Janitor
Joe John
Salary $50,000 $50,000
FICA or SECA
contribution $3,825 7.65% $3,825 7.65%
Total
Compensation $53,825 $53,825
Housing Allowance $25,000
Base Salary $28,825 $50,000
17. Example of Pastor vs
Non-Pastor Taxes
Pastor Janitor
Joe John
Base Salary $28,825 $50,000
Optional
(Include
Federal W/H $8,800 SECA) $5,000 10.00%
FICA & Self
Medicare W/H - Employed $3,825 7.65%
State W/H $865 Optional $1,500 3.00%
Housing
Allowance $25,000 -
Net Take Home $44,160 $39,675
18. Taxability of Income
Non Pastor
Income Taxes FICA
Base Salary $50,000 $50,000
Housing Allowance
Excess Life Insurance $25 $25
Year end gifts $500 $500
Excess Housing Allowance
Total Income $50,525 $50,525
19. Taxability of Income
Non Pastor (cont.)
Income Taxes FICA
Total Income $50,525 $50,525
FICA Taxes @7.65%* $3,865
Adjusted Gross Income $50,525
Itemized Deductions & Exemptions $21,000
Taxable Income $29,525
Income Taxes $4,855
Total Taxes $ $8,720
* Except for 2011 which is 5.65% and 1st 2 months of 2012 unless extended by Congress.
20. John Jones W-2
36-1234567 50,525.00 5,000.00
Evangelical Covenant Church 50,525.00 3,100.00
1234 Main Street 50,525.00 725.00 *
Anywhere, IL 60060
123-45-5678
John Jones c 25.00
28678 Main Street
Libertyville, IL 60055
IL 36-1234567 50,525.00 1,500.00
2011
*Assumes 7.65% rate (not in 2011)
21. Taxability of Income Pastor
Income Taxes SECA
Base Salary $28,825 $28,825
Housing Allowance 25,000
Excess Life Insurance 25 25
Year-end Gifts 500 500
Misc. items from Church 150 150
Honorariums 1,000 1,000
Excess Housing Allowance 3,000
Total Income $33,500 $55,500
22. Taxability of Income Pastor
(cont.)
Income Taxes SECA
Total Income $33,500 $55,500
Subject To SECA Tax @ 92.35% $51,254
SECA Taxes @15.3%* $7,842
50% SECA Taxes ($3,921)
Adjusted Gross Income $29,579
Itemized Deductions & Exemptions $21,000
Subject to Income Tax $8,579
Income Taxes @ 10% rate $858
Total Taxes $ $8,800
* Except for 2011 which is 13.3% and 1st 2 months of 2012 unless extended by Congress.
23. Pastor Joe Smith W-2
36-1234567 28,825.00 8,800.00
Evangelical Covenant Church
1234 Main Street
Anywhere, IL 60060
123-45-5678
Joe Smith
c 25.00
678 Oak Street
Libertyville, IL 60055 Housing Allowance
25,000.00
IL 36-1234567 28,825.00 865.00
2011
24. Ministerial Wages-
Miscellaneous Rules
Income tax withholdings are voluntary, not
mandatory.
Ministers’ wages are NEVER subject to FICA.
Ministers are considered self employed for
Social Security tax - subject to SECA on Total
Compensation (base plus housing).
Reimbursement of SECA by church is taxable
for both income tax and SECA.
25. Housing Allowances -
Who Qualifies?
Credential “hoop”
Must be licensed, commissioned, or ordained.
How does this work in the ECC?
Performance “hoop”
Must perform qualified services.
Administration of sacraments.
Considered a religious leader by the church.
Conduct religious worship.
Management responsibility in the control, conduct,
or maintenance of the church.
26. Housing Allowances -
The Effect on Taxes
Excluded from federal and (most) state
income tax.
Double dip - ministers can deduct interest &
property taxes as itemized deductions in
addition to reducing taxable income.
Housing allowance is subject to Social
Security.
SECA not FICA.
27. Housing Allowances -
The Effect on Taxes (cont.)
IRS does not require housing allowance to be
listed on Form W-2; however, the church can
include it in box 14.
Most churches exclude it completely from Form
W-2 and issue a letter instead.
28. Housing Allowances -
Miscellaneous Rules
Designation must be prospective, by the
church, and in writing.
It may be amended.
Who should determine the amount? Pastor.
Income Tax compensation.
Total compensation less housing allowance.
This will be called base salary.
The amount of base salary goes on line 1 of your
W-2.
Other items that will be discussed later can be
added to line 1 on your W-2.
29. Housing Allowances -
Miscellaneous Rules
Housing allowance is limited to the lesser of:
The amount prospectively designated,
the amount of actual expenses in the
calendar year, or
the fair rental value of the residence,
plus utilities & furnishings.
Any excess of housing allowance over the
limit must be reported as income on IRS form
1040.
30. Sample Letter Requesting
Housing Allowance
To: Elliott Johnson
ECC Business Office
From: ____________________________
For the calendar year 2012, I request that my
housing allowance be $____________________.
2011 amount: $_____________________
Signed:
______________________________________
Date: ___________________
31. Reporting Of Excess
Housing Allowance
Mortgage Payments $ 14,000.00
Real Estate Taxes $ 2,000.00
Property Insurance $ 500.00
Utilities $ 2,400.00
Furnishings $ 1,500.00
Home Repairs $ 1,600.00
Total Housing Allowance Expenses $ 22,000.00
Designated Housing Allowance $ 25,000.00
Excess to be reported as income $ 3,000.00
32. Where to go for help…
Church & Clergy Tax Guide
by Richard Hammer, J.D.
1-704-821-3845
www.churchlawtoday for more useful
information, including
Church Law & Tax Report and
Church Treasurer Alert!
34. Covenant Pension Plan
Mission statement:
-to provide retirement benefits to Covenant
pastors, missionaries and surviving spouses
and
-to make available medical, dental,
prescription drug, life, vision and long-term
disability benefits programs to Covenant
pastors, missionaries, retirees, surviving
spouses & office workers.
Summary Plan Description.
35. What is the Covenant Pension
Plan?
It is a “defined benefit plan”.
The Pension Board (not the participant)
assumes responsibility for achieving
investment returns needed to pay
retirement benefits.
Participants cannot “outlive” their benefits.
Professionally managed.
36. How are payments calculated?
“Considered compensation”-the
cumulative base salary & additional
income from employer for all years of
service.
12.5% of annual considered
compensation. (*Where a parsonage is
provided, base salary for purposes of
calculation is increased by 33%).
37. Pre-retirement communication
At age 59, you will receive a “heads up”
letter from the Pension Department.
At age 61, you will receive a letter
detailing early retirement procedures.
At age 64, you will receive a letter &
forms to complete in anticipation of
receiving benefits the month following
65th birthday.
38. Important pension terminology
Vesting – 5 years (in the past, up to
25 years).
Normal retirement age is 65. Pastors
can continue to work & still collect
pension benefits. NOTE: When you stop
working, monthly payment is
recalculated.
39. Early retirement age is 62. However
with a decrease of 0.5% for each
month before age 65.
Surviving spousal benefit is
automatically 65% of retiree benefit.
Optional selection of 75% or 100%.
Housing allowance for retiree only
can offset some or all of retirement
payment.
40. Long-term disability – through
Bethany Benefit Service.
Minimum payment – for less than 25
years of service (or surviving spouse)
$989/$742 respectively.
41. Pension payment increases
Since 1996, minimums raised from $480
to $989 (spouse: $320 to $742)
Overall benefits raised 34% since 1996
Surviving spouse benefit raised from
50% to 65%.
42. The Plan’s Professional
Management
A “selection advisor” assists in
performance evaluation; asset allocation;
investment manager selection.
An “actuary” annually determined the
liability of the Plan; financial soundness.
Outside auditing firm conducts thorough
yearly audit.
43. Professional Management cont.
Investment Managers: currently 27
different professional investment
managers oversee investment of assets.
Investment Committee (Pension Board
& Covenant staff) – regularly review,
analyze; meet 3 times yearly.
44. Bethany Benefit Service
Governed by the ECC Board of Pension
and Benefits.
Covenant office staff manage the
program, provide help with any
complicated claim issues.
Lower than “marketplace” rates.
Coverage available for Covenant pastors,
missionaries, surviving spouses & office
workers.
45. Bethany Benefit Service
Medical
Dental (including Orthodontia)
Prescription Drug Benefit
Long-Term Disability
Life Insurance
Vision
Long-Term Care
Employee Assistance Program
51. Time is Money!
Jane started saving at age 25
and put aside $25 weekly
until age 65.
400000
350331
John saved $25 a week too, 350000
but waited until age 35 to 300000
start. 250000
200000
153197
Jane put aside only $13,000 150000
more than John, but at 100000
age 65 had accumulated 50000
$197,134 more than John! 0
Age 65
John Jane
52. Key Principles for Investors
Save regularly (wherever possible).
Start at an early age and even if you are not young,
start now (if you can). The power of compound
investment returns over many years is very
substantial.
Invest on a tax-advantaged basis where it is
consistent with your personal financial objectives.
Examples are a 403(B), Roth IRA, etc.
53. More Key Principles for Investors
Develop an asset allocation strategy, consistent with
your desired risk/return tradeoff, in order to achieve
the benefits of diversification.
If you are an inexperienced investor, consider the
benefits of a fund such as Vanguard Star Fund, which
is a fund of funds—investing in 6 domestic equity
funds, 2 international equity funds, 2 bond funds and
one short-term fund. In this way, the purchase of
one fund provides built-in diversification and asset
allocation. Other fund complexes offer similar
vehicles.
Successful investing requires doing well in good
markets and not losing too much in adverse markets.
56. Comparison of Popular
Investments
Payroll Pre-tax Earnings Required Taxability of
Deduction Contribution Grow Tax Distributions Distributions
Deferred
403(B) Yes Yes Yes Yes Ordinary
Traditional IRA No Yes Yes Yes Ordinary
Roth IRA No No Yes No None
Roth 403 (B) No No Yes No None
Non-tax No No No No Ordinary/
advantaged Capital Gains
57. Retirement Considerations
Life Expectancy defined as “that age at
which there is a 50% chance you will still
be alive.”
In 1900 = 47.3 yrs. Today = 78.1 yrs.
The U.S. Census Bureau predicts that 35
years from now there will be more than
800,000 over age 100.
Some may spend up to 1/3 of life in
retirement.
58. Inflation & Retirement
Inflation is defined as “rate of change in
the prices of goods and services people
purchase.”
Average = 3% yearly.
Medical care/prescription drugs much
higher than general inflation rate.
Can be financially catastrophic for those
on fixed income.
59. Retirement: the 3-legged stool
Three major sources of retirement
income:
The employer
The government
The individual
60. Employer:
Retirement pension
Survivor’s pension
Death benefits
Disability benefits
NOTE: All of the above available to Covenant pastors &
missionaries through Covenant Pension Plan or Bethany Benefit
Service. Bethany also offers a Medicare Supplement Policy.
61. Government:
Social Security
Medicare/Medicaid
Social security:
•Early Retirement (currently 62)-significant decrease: 25% or more
•Full Retirement-FRA (currently 66)-no earnings limitation
•Delayed Retirement (up to age 70)-increases your benefit by 8%
per year over the amount at your FRA.
62. Individual
Savings/investments
Defined contributions (403b)
Traditional or Roth Individual Retirement
Accounts (IRA)
Spouse assets/benefit programs
Medicare Supplement
Life Insurance/Annuities
Working into retirement
63. Balancing the 3-legged stool
Balance in each of the above 3 areas of
retirement planning.
Lack of support from any of the three
creates instability.
The Covenant benefit programs are
stable & strong.
64. Examples of Different
Retirement Savings Methods
Roth Roth
Activity 403(b) 403(B) IRA IRA Taxable
Out of Pocket Cash $2,850 $5,000 $5,000 $3,600 $5,000
Tax Savings $2,150 $1,400
Annual Contributions $5,000 $5,000 $5,000 $5,000 $5,000
Tax Savings 43% 28%
2012 Contribution
Limits $17,000 $17,000 $5,000 $5,000 None
Over Age 50
additional
amounts $5,500 $5,500 $1,000 $1,000
65. Suggested Investment
Reading List
Newspapers
USA Today – money section
www.usatoday.com/money/index
Wall Street Journal – www.Smartmoneycom
Magazines
Money – Subscription: 800-633-9970
http://money.cnn.com/magazines/moneymag
Web Sites (large mutual fund organizations)
Vanguard.com: Lowest expense fund provider,
emphasis on index and managed funds.
Fidelity.com: Largest provider of mutual Funds.
Many other major mutual fund companies also have
good web sites.
66. Spread the word…..
Credit for church health insurance
premiums.
Your church can qualify for an IRS refund check
up to $3,000 per covered employee. For
information, stop at the Bethany Benefit Service
booth today or contact Elliott Johnson
773-907-3362 elliott.johnson@covchurch.org
67. Thank you!
Please don’t hesitate to contact me if you
have any questions.
elliott.johnson@covchurch.org
773-907-3362
Editor's Notes
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."
A one-dollar bill met a twenty-dollar bill and said, "Hey, where have you been? I haven't seen you around here much."The twenty answered, "I've been hanging out at the casinos, went on a cruise and did the rounds of the ship, back to the United States for a while, went to a couple of baseball games, to the mall, that kind of stuff. How about you?"The one dollar bill said, "You know, same old stuff - church, church, church."