Forget Me Not: Year End Reminders
This article contains your annual end-of-year checklist of financial tasks. Some should be completed before January 1, 2024.
Here’s to finishing 2023 strong and getting off to a great start in 2024!
- Designate housing allowance. Housing allowance should be set at a board meeting before January 1. Housing allowance can only be declared prospectively (that is, after board approval).
- Review W-4 forms. All employees should review their W-4 form and submit a new form if their financial status has changed and tax withholding amounts need to be revised.
- Adjust payroll and compensation systems as needed. Employees may make changes to withholding, benefits elections, and salary adjustments may be needed before the first pay period in January.
- Review payments to independent contractors. If a church has paid $600 or more to an individual for services performed in 2023 a 1099 must be filed. This includes pulpit supply, most love offerings, and gifts to IWs on tour. 1099s should be provided before January 31, 2024.
- Determine if contributions are effective for 2023 or 2024. Checks mailed and postmarked in 2023 are deductible in 2023, even if not received until 2024. Text contributions are deductible in the year the donor sends the text message. Charges to credit cards are deductible the year the charge is made.
- Prepare donor contribution statements. For donors who contribute more than $250 in a calendar year, a statement should be provided no later than January 31, 2024. The statement should include the donor’s name, address, the date and amount of each gift, the church name and address, and EIN. It is not a requirement to affix a signature to the contribution statement. Include a statement that “no goods or services were provided, other than intangible religious benefits.”
- Plan your financial review. Once the books are closed for 2023 it is a good time to plan an audit or financial review. This can be done by an outside firm, an internal audit committee, or even through a reciprocal arrangement with another church.
- Monthly and Quarterly Tasks. With the extra work involved during year-end don’t forget regular ongoing tasks such as 941 filings, reconciliations, and monthly reporting.
If you have any questions about year-end processing or would like assistance with anything, please feel free to reach out to me at the District Office.
Scott Thorson
sthorson@rmdcma.com
406-656-4233