Churches and ministries: To do before year-end

Churches are rarely busier than the months of December and January. In addition to preparing for Christmas services, your administration needs to take care of some action items. Hopefully, some items on the list below are already complete.  Here’s the list to check:

Donations/gifts received

–         Remind members that for donations to be deductible, the church must receive the gift prior to midnight on December 31. (If mailed, it must be postmarked on or before December 31.)

–         Prepare receipts for contributions of $250 or more.

–         File Form 8282 for receipt of donated non-cash items valued at $5,000 or more and disposed of by you within three years.

–         Identify love offerings and gifts given to the pastor by the church or approved for giving to the pastor. The amount needs to be included in the pastor’s W-2 form.

–         Request Form 1098-C from the IRS if you received a donation of a car, boat or plane. (Call 800-829-3676 and ask for five copies.)


–         Make sure that you have a file for each employee with pertinent personnel records and forms. (For ministers, be sure to include housing allowance information.)

–         Ask employees to review W-4 forms for accuracy of name, address, SSN and to check withholding status.

–         Prepare W-2 information

–         Prepare the 4th quarter 941 report, due January 31st. (This is the quarterly federal tax form that reports employment taxes.)

–         Review reimbursements for substantiation. (This should be an ongoing practice.)

–         Prepare a 1099-misc form for all independent contractors and service providers who you have paid $600 or more in 2011. This includes all of the companies you hire to consult or do maintenance work on your buildings.

–         Review payments of health insurance for employees. You may qualify for a 25% refund of the cost if you have less than 25 employees, the average annual salary is less than $50,000 and if your organization pays at least 50% of the group insurance premium. Then, you’ll need to file form 990T and Form 8941.

–         Be aware of excess benefit transactions by reviewing IRS section 4958.


–         Have an annual board meeting, if this has not yet happened in 2011.

–         Remove old board members and add new members.

–         Make sure that you have a signed conflict of interest statement from each board member.


–         Make sure that you have a readily-available copy of your 501(c)(3) letter.

–         Review insurance policies to be sure that you’re adequately covered. (Do this prior to the board meeting, so that issues can be addressed.)

–         Review bank accounts to see if the structure is meeting your needs.

–         Put all of the bank statements for the year in one location, including cancelled check records.

–         Determine if you owe unrelated business income tax.

–         Review your Web site for accuracy. Things change, but sometimes the Web site stays the same.

Prioritize the list above based on your church’s needs, and you’ll be in great shape to start the new year.