A church member tells you there is a needy family in their Sunday School class and wants to help financially. They want to donate to this family by giving money to the church earmarked specifically for them and get tax credit since it was given to the church.
Do you accept their gifts, give the donor contribution credit for tax purposes, and send the money to the family?
Don’t under estimate the IRS and how it can help Church Business Managers with giving questions like these. I keep several IRS publications on hand that helps me go directly to the source in how to handle these giving questions. There are many other great books by such authors as Richard Hammer and Dan Busby, but the IRS has some great ones also. You can order these for free from the IRS and they will mail them to you.
When I get posed with these type of questions I always try and have some back up documentation to show the church members asking. It shows them I am not just winging it, but know what the rules are.
Ok! The answer to the question above is found in IRS Publication 526 on page 6. You cannot give money to the church and specify an individual and get contribution credit for tax purposes. Simply passing money through a church does not automatically make it tax deductible. There are rules to consider.
POINT: If you have not already, start building your library of publications and books and articles that help you know the rules for giving! Here is a list of the IRS publications I keep on hand. The list was recommended to me by Gene Hill, Church Tax Consultant out of Austin, Texas.
PUB 15 Circular E, Employers Tax Guide
PUB 15-A Employers Supplemental Tax Guide
PUB 15-B Employers Tax Guide for Fringe benefits
PUB 969 HSA’s and Other Tax Favored Health Plans
PUB 463 Travel, Entertainment, and Auto Expense
PUB 517 Social Security and Other Info for Clergy
PUB 526 Charitable Contributions
PUB 1771 Charitable Contributions Substantiation and Disclosure
PUB 1828 Tax Guide for Churches and Religious Organizations
What publications and books do you prefer in your library? Share your comments here?
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