Baptist Pioneer Mission: June 2014 Mission Institute

Baptist Pioneer Mission:June 2014 Mission

Institute

Presenter: Corey A. Pfaffe, CPA, PhD

Agenda: Today—Financial “hot topics” update Tomorrow—Ministry topics from a

“friendly”

Tax Review and Update• Foreign Earned Income Exclusion• Housing allowance• Ministry (“Business”) Expenses

– Ministry or Personal (Ordinary and Necessary)– Missionary as earner versus family as earners

• Support issues

Housing Allowance: Review

• Principal residence• Three-part test

– Actual expenses– Designated amount– Fair rental value, plus actual cost of

utilities• Partial reduction of deductible

expenses

Housing Allowance: Unconstitutional?

Opting Out of Social Security• 15.3% SECA; not 7.65% FICA• Requirements• Caution!• Does opting out include the ACA?

Retirement Plan Options: Review• Internal Revenue Code Section 403(b)

plans• Traditional Individual Retirement

Accounts (IRAs)• Roth IRAs (and Roth 403(b) plans)

FBARs—Foreign Bank and Financial Accounts Report

• What? FinCEN Form 114, electronically reporting foreign financial interests and signature authority

• Who? Any U.S. person with aggregate value in foreign financial accounts exceeding $10,000 at any time in 2013

• When? June 30, 2014 (may not be extended)

• Why? Consequence of failure to properly file “not to exceed $10,000 …”

What does FinCEN want to know?

FBARs—Foreign Bank and Financial Accounts Report

Options

FBARs—Foreign Bank and Financial Accounts Report

• Go to www.irs.gov and type “FBAR” in the search window

• Engage a BSA E-Filer—a firm registered and authorized under the Bank Secrecy Act to file on behalf of others through the Financial Crimes Enforcement Network

Affordable Care Act• “Individual Shared Responsibility

Payment”– 2014: greater of 1% of your household income in

excess of “filing threshold” OR $285 (for family of six)– By 2016: greater of 2.5% of your household income in

excess of “filing threshold” OR $695 per person ($4,170 for family of six)

• 100% exception for missionaries:– If you qualify for the foreign earned income exclusion

with a once-per-year presence in the U.S. of no more than three months

For more information...

IRS Publications54 – U.S. Citizens Abroad463 – Travel535 – Business Expenses1771 – Charitable Contributions1828 – Churches & Religious Org.IRS-Other

Form 2555 – Foreign Earned Income ExclusionForm 8938 – Report of Foreign Bank and Financial Accounts (FBAR)Ministers Audit Techniques Guide

For more information...

• Non-profit organization accounting principles

• Compensation practices• Benevolent activities• Contributions issues• Foreign missions support• Ministerial tax planning

http://www.ministrycpa.blogspot.com/

Short-Term Missions Trips to “Your Place”

• Handling fundraising• Qualified expenses• Reporting

Three Required Ingredients in Any Successful Family Budget

• A monthly budget– IN — net payroll checks,

average draws– OUT — every pay period,

every month, Budget Busters

• A payday method• Staying on track between

paydays

Resources

STRENGTHS: A slap upside the head! Testimonies

STRENGTHS: Easy-to-read, Bible-rich teaching

STRENGTHS: Gets a couple talking about money & priorities

Communications with Your Supporters

• Email often, but keep it short• Supporters want to hear about your

personal and family needs, both spiritual and practical

• It’s a delicate subject, but supporters said that they heard the least about your financial needs and gave the strongest indication of any subject that they did not hear enough about these needs

Observations and interpretations