January is a very busy month for churches concerning year end reporting. Here is some important information for the start of the new year that every church should know.
- The IRS has released the mileage rates for 2016:
- 54 cents per mile for business miles driven, down from 57.5 cents for 2015
- 19 cents per mile driven for medical or moving purposes, down from 23 cents for 2015
- 14 cents per mile driven in volunteer service of charitable organizations
- The Alabama Department of Revenue has a new due date for W-2s. The due date for filing wage and tax information is January 31.
- The IRS has a new form – the 1095. Who needs a form 1095? – virtually everyone!! It is the form required to prove having medical insurance and avoid the tax penalty. How many churches will be required to provide a form 1095? – very few. The 1095-B will come from your insurance company as proof of insurance. Applicable Large Employers of 50 or more full time equivalents will be required to provide forms 1095-C and the summary form 1094. Employers of 50 or more will be required to provide the form even if the employer did not provide insurance under transition relief.
- Employers who have been providing payments for individual rather than group health insurance are now prohibited from doing so and any money provided in 2015 is taxable as of July 1, 2015. Churches who have provided insurance in this manner must include the payment as regular taxable income on the last two 941s of 2015 and on the W-2s to be issued in January. What qualifies as a tax free benefit? Only group health insurance.
- GuideStone is a group plan even if only one person is covered
- A Group plan for church employees such as GuideStone or Blue Cross
- There is an exception for “Groups fewer than 2”. In other words, when there is only one full time employee at the church.
- There are a few other minor exceptions.
For more information, plan to attend one of the Church Tax Workshops during January to be held throughout the state. For dates and locations and to register go to ALSBOM.org/ChurchTaxConference or contact state missionary Lee Wright at firstname.lastname@example.org or 334-613-2241.