Expense Reimbursement (MER) M_Agency 8505-02 ZZmis

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                           TO:  Interested M-Agency                                                                               FROM: Jim Bramer, Retired CPA-Auditor
                                                                                                         Isaiah 63:7                             FILE:  8505-02/mis

                            RE:  Expense Reimbursement - Mission Agency                                    Originated: February 1996                             


        Below is a transcript of another hypothetical Online conversation, or THRD WRITING, between JimCPA@BCIDOT.ORG  and the M)inistry F)inance Team - MFTeam members:  Pat .. the Ministry Executive, LEE .. the Volunteer Board Treasurer, and FRAN .. the Ministry Computer Bookkeeper.   Click here and go to List of threads (THRDs) at www.bcidot.org


FR: Fran

        Thank you, Jim, for sharing (M)inistry (E)xpense (R)eimbursements -MER - issues at our recent XYZ (M)inistry (F)inance Team -MFTeam meeting. As I am still a little uncertain as to what this all means to us, please Email me some more information on this topic. Thanx
--

            FR: Jim

        Good idea! Some groundwork first.
        As you know XYZ-Agency does NOT  guarantee financial support to a (S)taff (M)ember -SM- and family.  Or the applicable SM "Raises", or deputizes,  such financial support from usually the SM's unique constituency. The SM is paid only if money comes in designated for their ministry --- if $100.00 comes in, then virtually $100.00 flows to the SM; or if $2,000.00 comes, then $2,000.00 flows to the SM, etc.
        The Income Taxation of various financial transactions under this type of relationship requires some clarity.
        Income Tax issues include: The SM's Authorized Clergy Housing Allowance by XYZ of $500.00 a month; Ministry Expenses, or authorized non-personal expenses incurred in carrying out the exempt purpose of XYZ by the SM, and the SM's Personal Expenses, which show up on an annual form W-2 issued to this Clergy SM.
        The purpose of this Email is to provide my opinion about these categories, or types, of transactions.
        The following takes place during a month at XYZ's Admin office - - - you will note that I have indicated "MER" or "PER" next to the amount to indicate my opinion of the proper category.
        ALL "PER" would be included within the annual IRS form W-2 , with, of course, due consideration to the annual authorized Clergy Housing Allowance.
        Ten contribution receipts for a total of $1,500.00 come in this month designated for this SM.
        This $1,500.00 was spent as follows:

           Transaction

MER

PER

    Amount

1>

Administration Assessment

   xx

$ 100.00

2>

Reimbursement of 'out of

pocket ' documented Ministry

Expenses by the SM during the month

   xx               $    85.31

3>

Admin charge for processing

prayer letters

   xx

$ 14.98

4>

Payment by the M- Agency of SM's Personal Credit Card total balance of $ 244.77 -MER 55.80

   xx                 $  55.80
  Personal  188.97

  xx                 $ 188.97

5>

Mile(age) reimbursement at

current authorized IRS rate for

documented use of SM's

personal vehicle.

   xx

$ 155.65

6>

Admin charge for acting as

SM's agent in paying certain

personal bills.

  xx

$ 5.00

7>

Payment of kids education

expenses

  xx

$ 150.00

8>

Payment to another Ministry -

as billed by them for Ministry

expenses

   xx

$ 115.00

9>

Tithes and offerings to their

Church

  xx

$ 100.00

10>

Balance to SM's personal

checking account -- see $500

Clergy Housing Allws issues

  xx

$ 529.29

             Total Received

$1,500.00

        You will note that the $100.00 payment of the above 'Tithes and Offering' is, in my opinion, a PER expense --- not MER, as suggested. Therefore it is included within form W-2; but, like any other tax payer, it is a possible long form deduction on the SM's annual form 1040, etc.

        Let me know if you need more - - -


      Please Click Here for a list having to do with Mission Agencies topics here on www.bcidot.org.  The bulk of this Publication originated in February 1996 and was UPTD: April 20, 2010    

ABOUT  US   |  OUR PURPOSE   |  TABLE OF CONTENTS   |  SEARCH  MATTERS  |  HELP DETAILS   |  FUND ACCTG VIA COMPUTERS   |  GLOSSARY