How to set aside money for things like continuing education?

Fund Accounting, Accounts Payable, Accounts Receivable, Payroll

Moderators: Moderators, Tech Support

Post Reply
jadamwilson
Posts: 7
Joined: Sun Mar 05, 2017 4:39 pm

How to set aside money for things like continuing education?

Post by jadamwilson »

We offer some benefits like continuing education for an amount each year.

If I wanted to setup an account and put 1/12 of the yearly amount into the account, would I just need to setup a restricted account, or is that better handles as a liability like the taxes?

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: How to set aside money for things like continuing education?

Post by NeilZ »

jadamwilson wrote:
Mon Jul 06, 2020 5:39 pm
We offer some benefits like continuing education for an amount each year.

If I wanted to setup an account and put 1/12 of the yearly amount into the account, would I just need to setup a restricted account, or is that better handles as a liability like the taxes?
Um that should just be part of the normal budget process, the pastor (or other employee) gets $1200 a year for Continuing Ed. No need to set anything 'aside'. The same with anything like an annual book allowance, its part of the budget process and is paid out when the employee requests it. Unless its a reimbursable type of benefit, in which case you need a receipt. But often such amounts are part of the pastor's terms of call and is something that is part of the overall package.

You treat it like salary, you don't 'restrict' the salary in that manner, you budget x amount per year.
Neil Zampella

Using PC+ since 1999.

jadamwilson
Posts: 7
Joined: Sun Mar 05, 2017 4:39 pm

Re: How to set aside money for things like continuing education?

Post by jadamwilson »

I would be happy to just include it as a line item on his check, I have tried looking online, and I cannot find an IRS guideline to tell me if we can offer cont. ed. as a benefit without receipts.

Because we think we have to require receipts, it doesn't get paid out monthly like salary, instead it tends to go unclaimed for most of the year and then reimbursement requests start coming in the fall.

I suppose I am looking for a way for PC to track the unclaimed expenses so I don't think we have an extra $500 sitting around. I currently have a spreadsheet to track these types of things, but would prefer to have it all in one place.

Do you happen to know where I can look to find some guidance on how things like cont. ed. are supposed to be handled so that it doesn't count as income?

NeilZ
Posts: 10209
Joined: Wed Oct 08, 2003 1:20 am
Location: Dexter NM
Contact:

Re: How to set aside money for things like continuing education?

Post by NeilZ »

jadamwilson wrote:
Mon Jul 06, 2020 7:57 pm
I would be happy to just include it as a line item on his check, I have tried looking online, and I cannot find an IRS guideline to tell me if we can offer cont. ed. as a benefit without receipts.

Because we think we have to require receipts, it doesn't get paid out monthly like salary, instead it tends to go unclaimed for most of the year and then reimbursement requests start coming in the fall.

I suppose I am looking for a way for PC to track the unclaimed expenses so I don't think we have an extra $500 sitting around. I currently have a spreadsheet to track these types of things, but would prefer to have it all in one place.

Do you happen to know where I can look to find some guidance on how things like cont. ed. are supposed to be handled so that it doesn't count as income?
How is it counted as 'income' it is budgeted as an expense? Just because it is not paid out monthly does not mean that it 'goes unclaimed'. You budget for a year it doesn't matter when its spent. Church Fund Accounting is a cash based accounting, you only count as income funds that come in through contributions, or other income source such as room rental or the like.

The IRS says that an employer can provide up to $5250 to an employee before the employee needs to declare it as income. However, as a reimbursement you will still need a receipt for disbursement. Most churches I know do this.
Neil Zampella

Using PC+ since 1999.

Post Reply