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Tax time is almost here. If you’re like most people, you have lots of questions about taxes: What forms does my church need to file and when? Will we meet all the church tax filing requirements? Do we use paper forms, use the e-file service, or create a file upload?
We’re here to help you get re-acquainted with federal and state requirements so you can be prepared and minimize your stress.
Let’s go over the most important forms you need to think about for Tax Day.
The “Big 3” Forms
The most popular forms are the W-2, 1099-MISC & 1095-C. The W-2 and 1099 are required to be filed with the federal government and most states. For tax year 2022, the 1095-C is required to be filed to the IRS federally and in three states – California, New Jersey, and Rhode Island – and the District of Columbia[i].
Currently, the e-file threshold for these forms stands at 250 or more. There are proposed changes, however, that would lower the threshold to 100 initially and then to 10 before eventually mandating e-filing. As of this posting, the new changes have not been finalized, so the 250 form guidance remains.[ii]
Here’s a look at these three most widely used forms in church tax filing…
W-2 Forms
- What: The form employers use to report yearly wages and withholding information for employees.
- Who: An employee is anyone who performs services for an employer and the employer can control what will be done and how it will be done. (Even employees with freedom of action).
- File To: SSA & Employees.
- E-file Threshold: 250 or more forms.
- Deadline Paper, E-file, and uploads – January 31, 2023[iii].
1099-MISC Forms
- What: The form businesses use to report miscellaneous income. (e.g. contract or freelance worker whom you paid at least $600 during the year, as well as fees, royalties, commissions and rental income).
- Who: An individual is considered an independent contractor if the payer has the right to control or direct only the result of the work and not how it will be done.
- File To: IRS & Recipients.
- E-file Threshold: 250 or more forms.
- Deadline: Paper, E-file, and uploads – January 31, 2023.
1095-C Forms
- What: The form employers use to report health coverage for employees (1095-B for self-insured employers with fewer than 50 full-time employees).
- Who: Full-time employees are defined as those who worked an average of at least 30 hours per week or 130 service hours in a calendar month.
- File To: IRS & Employees.
- E-file Threshold: 250 or more forms.
- Federal Deadline: Paper – February 28, 2023; E-file – March 31, 2023[iv].
- State Deadlines: Varies by state – check local tax experts for details[v].
Other Forms
There are other forms you may be required to file, such as 1099-DIV, 1099-INT, or 1099-R to name a few. For information on these and other forms and deadlines, we recommend you visit IRS.gov or consult a tax expert.
Be Prepared
We want to help you be a responsible steward of your ministry’s finances and keep your data organized. There is a lot to think about and plenty of details involved with church tax filing requirements. Need help managing and organizing your finances? You can get in touch with us here to see how we might be able to help.
[i] https://www.taxbandits.com/aca-forms/form-1095-c-due-date/
[ii] https://www.nysscpa.org/news/publications/the-trusted-professional/article/irs-to-gradually-lower-e-filing-return-threshold-requirement-to-10-072721
[iii] https://blog.checkmark.com/w2-deadline-penalty-and-extension/#:~:text=W-2%20Deadline%20for%202022%20%20%20%20Form,SSA%20Electronically%20%20%20January%2031%2C%202023%20
[iv] https://www.taxbandits.com/aca-forms/form-1095-c-due-date/
[v] ibid
