Is your church considering starting a new activity in order to generate revenue or do you have questions about how your activities might impact your tax status? RootedGood’s tool, What About Taxes?! can help.
More and more churches are looking at new ways to generate revenue beyond the offering plate. This might take the form of renting rooms in a church building out to a community partner, starting a new social enterprise like a grocery co-op, building affordable housing, or anything that generates earned income. There is a lot of promise in these activities and many churches can not only generate revenue but also engage in new and meaningful expressions of ministry that serve vital needs in their community. But generating revenue brings with it lots of questions and concerns about taxation and tax exempt status.
When a congregation begins to explore income generating activities through social enterprise or renting property there often is anxiety around tax status. Don’t ignore the tax implications but also don’t let that anxiety stop you from trying something new!
RootedGood is pleased to share a new resource tool called, What About Taxes?!: A Guide for Churches Starting to Generate Revenue. Developed in partnership with legal and accounting experts, this tool will help you ask the right questions related to the tax issues as it concerns income generating activities and churches. It is designed to increase your confidence about tax issues, build your capacity to understand the tax implications, and to help you as you align money and mission.
By using this tool you will work through a decision tree that will highlight what to look out for with regard to IRS tax exempt status, federal income tax, state income tax, sales tax, and property tax depending on the nature and structure of the activity you are considering.
What About Taxes?! is a part of a series of tools from RootedGood helping churches navigate their economic future. For more assistance with questions around taxation, check out our free training video on churches and taxation. Are you considering working with a developer to develop your church property? Check out our How to Develop Well tool.
Note: This tool is NOT legal or tax advice - consult an attorney and/or tax advisor on all decisions before acting.
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