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Financial Checklist

2017 is almost here. For ministers, this means there are items of business to consider in the countdown to the new year. Consider the following:

Adjust Accountable Expense Reimbursement Plan

Do you have an accountable expense reimbursement plan? Properly substantiated expense reimbursements must be paid separately from an employee’s salary, and the accountable expense reimbursement plan must be established in advance. The IRS will not allow reimbursements for business expenses to be paid through a retroactive reduction of salary. Have your employer designate the new amount before January 1. See P&B Memo #11 for details.

Evaluate Nazarene 403(b) Contributions

Now is an excellent time to review and increase contributions to your Nazarene 403(b) Retirement Savings Plan account.

A good starting point for personal contributions is three percent of annual salary. If you are not at this level, make it a goal, then move on from there as you are able.

If you are not currently contributing to the plan, you should start now. As a full-time Nazarene minister, you most likely already have an account that has been opened in your name. An investment choice has been made for you and an initial contribution has been deposited into your account. If you have not received an initial contribution and you think you are eligible, please contact us at This email address is being protected from spambots. You need JavaScript enabled to view it.. If you have received an initial contribution and you want to begin contributing through voluntary salary reduction, simply call Fidelity at 866-629-2736 or register online to access your account at www.fidelity.com/atwork

Review Ministers Housing Allowance

Qualifying payments for a housing allowance are excluded from federal income tax; however, these amounts are included in the computation of Social Security/Medicare taxes (SECA). Housing allowance must be designated in advance by a minister.

The church treasurer should provide a written notice to the minister at year’s end to indicate how much has been paid as designated cash housing allowance. Also, the treasurer should not include this amount as income on the minister’s Form W-2 (it may be included in Box 14). Qualified ministers who anticipate changes to their 2017 housing allowance should designate the new amount before January 1, 2017. See P&B Memo #13 for more info on housing allowance.

Fourth Quarter Estimated Tax Payment

The final estimated tax payment for 2016 for qualified ministers is due Tuesday, January 17, 2017. If you do not pay enough tax by the due date of each payment period, you may be charged a penalty, even if you are due a refund when you file your income tax return at the end of the year. The first payment of 2017 is due April 17. See P&B Memo #3 for more info on ministerial taxes and reporting procedures.

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