Financial Checklist2018 is almost a memory. That means it’s time for clergy members to act on a few items of business before the close of the 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. With the passage of the Tax Cuts and Jobs Act of 2017, employer-related business expenses that are not reimbursed are not deductible for income tax purposes. This is because the Miscellaneous Deductions section of Schedule A was eliminated as of 2018. 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 3% of annual salary. If you are yet 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, consider starting 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. If you or your church have not yet contributed to your account, please contact us at This email address is being protected from spambots. You need JavaScript enabled to view it. or 888-888-4656 to get started. If your church treasurer/administrator has already set up an account for your church, discuss your interest in saving for retirement with them. If not, see Online 403(b) Contributions below and pass along the information.

Online 403(b) Contributions to Fidelity Investments

If your church treasurer/administrator has not taken steps to begin sending contributions to your 403(b) account via electronic funds transfer, it’s important that they begin using the portal, 403(b) Contributions, at as soon as possible. As of January 1, 2019, Fidelity Investments will no longer accept paper checks for church contributions or salary withholding to 403(b) accounts. The following resources are now available to assist treasurers and administrators in making the transition to this EFT system:

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 2019 housing allowance should designate the new amount before January 1, 2019. See P&B Memo #13 for more info on housing allowance.

Fourth Quarter Estimated Tax Payment

The final estimated tax payment for 2018 for qualified ministers is due Tuesday, January 15, 2019. 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 2019 is due Monday, April 15. See P&B Memo #3 for more info on ministerial taxes and reporting procedures.

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