Fully Comp Insurance Quotes

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In order for a person to work at a church¬†legally as an independent contractor, we believe it is prudent to consider the following guidelines: ¬† ¬∑¬†¬†¬†¬†¬†¬† The church¬†cannot substantially direct the person‚Äôs duties; the church can only give them overall tasks to complete. ¬† ¬∑¬†¬†¬†¬†¬†¬† The church¬†cannot control or set their hours that they work. ¬† ¬∑¬†¬†¬†¬†¬†¬† Since their ‚Äúcompany‚ÄĚ provides the service, they can send anyone to do the job. ¬† ¬∑¬†¬†¬†¬†¬†¬† They cannot have an office at the church¬†that is their primary office. ¬† ¬∑¬†¬†¬†¬†¬†¬† It cannot be their only source of income. ¬† ¬∑¬†¬†¬†¬†¬†¬† The church¬†needs to have a written contract in place including cost, delivery of Services, duration (i.e. six months, one year, etc.) and a termination clause. ¬† ¬∑¬†¬†¬†¬†¬†¬† They cannot participate in any employee benefits plans (insurance, retirement plans, etc). ¬† ¬∑¬†¬†¬†¬†¬†¬† The contractor must provide annual proof of worker‚Äôs comp and liability insurance naming the church¬†as additionally insured or the church could be held liable in the event of a claim. ¬† ¬∑¬†¬†¬†¬†¬†¬† The church¬†must issue a 1099¬†at the end of the year for all contract wages paid if the total amount for the year exceeds $600.00 to one contractor. We strongly recommend that no payments¬†are made until an accurate and fully completed W-9 is completed by the contractor and on file at the church. ¬† ¬†¬†¬†¬† Given these requirements, many workers such as those in the nursery, kitchens, and other service areas are not 1099¬†contractors, but employees. ¬†¬†¬† Regarding interim pastors, there is disagreement over whether they should receive a W-2¬†or 1099. Factors such as length of service, who supervises them, and whether they are a contractor, come into play in the decision on how to report their salary. For the best practice we recommend always using the W-2 to report salaries, but seeking tax¬†and legal¬†counsel would be wise to avoid any future IRS¬†issues. ¬†¬†¬†¬† While there are advantages to the church¬†to pay independent contractors who regularly work for the church such as avoiding the need to pay the employer's part of the FICA¬†tax¬†and the ease of terminating their services, we would recommend against their regular use. ¬†¬†¬†¬† We recommend against the use of independent contractors (that regularly work at the church) because we believe it can create the following problems for the church: ¬† ¬∑¬†¬†¬†¬†¬†¬† Less control over the position ¬† ¬∑¬†¬†¬†¬†¬†¬† Leaves the church¬†open to an IRS¬†challenge, which the church only has a 50/50 chance of defending, not to mention the cost and hassle of litigation ¬† ¬∑¬†¬†¬†¬†¬†¬† In the event of insurance claims, the church¬†may encounter issues with worker‚Äôs compensation coverage or liability insurance coverage such as sexual misconduct, etc. ¬† ¬∑¬†¬†¬†¬†¬†¬† The church¬†is open to contract disputes with the independent contractor ¬† ¬∑¬†¬†¬†¬†¬†¬† Based on how the individual/company is filing their taxes, it could bring an unwanted tax¬†audit to the church ¬† ¬†¬†¬†¬† Our conclusion is that we do not see enough cost-saving advantages for the church¬†to move in this direction.¬†It also creates unnecessary red flags for the IRS. The other looming question is, why is this such an important issue for such a small incremental (if any) tax¬†break for the individual?¬†Because the independent contractor will have to pay employer FICA, we don‚Äôt see any large tax advantage for this shift.¬†They can claim mileage and some home office expense (maybe), but it just does not amount to enough to place the church at risk. ¬†¬†¬†¬† Here are some detailed guidelines
Jeffrey A. Klick (Pastoral Helmsmanship)