Annual To Do List for December and January

JANUARY 31st:  As in previous years, you must provide Form W-2 to employees who worked for you during the past year by Jan 31st.

Important To Do! The transmittal form W-3, which is the cover page for all your W-2s, is also due by the end of January. If you file W-2s electronically, the software you select should automatically create and file a W-3 as well, but always verify this.

If you need to manually complete and file a W-3, here are step by step instructions: How to Complete a W-3 Form

JANUARY 31st: Deliver Form 1099-NEC to individuals you paid $600 or more last year for services provided to your church or nonprofit. This form must be filed and given to recipients by January 31st.

NOTE: The 1099-MISC is due on February 28 if filed on paper or March 31 if filed electronically.

JANUARY 31st: Distribute annual contribution statements! Keep in mind that a donation is recorded upon receipt, even if the check is dated for the prior year. The only exception is if you receive a donation check in the mail with a date of December 31 or earlier on both the check and the envelope.

Additionally, ensure you know which "donations" to include in that statement by reading this article on when to issue giving receipts and when not to:  Issuing Contribution Receipts!

DECEMBER 31: Review and approve your pastor's compensation package. Refer to this Year-End Checklist for additional to do items and key factors to consider when evaluating or establishing this package.

Examine and adjust your minister's housing allowance. Even if a housing allowance is already in place, it is essential to review and modify it, if necessary, before the year's end. Refer to this article on housing allowance tips.

DECEMBER 31: Regardless of the time of year, if you haven’t established an Accountable Reimbursement Plan, NOW is the time to do so!

With the new tax laws and the elimination of employees' and ministers' ability to claim unreimbursed employee "business expenses," having an Accountable Reimbursement Plan is crucial. Even if you do not reimburse employees for expenses, it is advisable to have an accountable reimbursement policy in place for employees using the church or nonprofit's credit or debit cards. Refer to this article on Accountable Reimbursement Plan Guidelines!

Year-End Financial Review: Conduct a thorough review of your financial statements to ensure everything aligns and is accurate. This includes making sure all donations are recorded and acknowledged for tax purposes.

Tax Preparation: Nonprofits that are required to file 990s should start preparing documents for tax season. Ensure all necessary forms are ready and set appointments with your accountant or CPA if needed.

Annual Report Preparation: Begin drafting your annual report, highlighting key achievements, financial summaries, and future goals. This is crucial for transparency and engaging with your supporters. 

Budget Planning for Next Year: Start drafting your budget for the coming year. Consider any new initiatives or programs you'd like to introduce and allocate resources accordingly.

Volunteer Appreciation: Plan a volunteer appreciation event or send personalized thank-you notes to those who have supported your organization throughout the year. However, refer to this article on staff and volunteers gifts to ensure tax compliance: Volunteer and Staff Gifts Tax Consequences

Event Planning: If you have any upcoming events, now is the time to finalize details, confirm venues, and ensure you have all necessary materials and permissions.

Outreach and Engagement Strategy: Evaluate and enhance your outreach strategies. Plan campaigns to engage your community and increase participation in your programs.

Facility Maintenance and Upgrades: Assess your facilities for any needed repairs or upgrades to ensure they are ready for the new year.

Staff and Leadership Evaluations: Conduct evaluations to provide feedback and set goals for the coming year. This is also a good time to discuss professional development opportunities.

Policy Review and Updates: Review your current policies and procedures to ensure they are up-to-date and compliant with any new regulations or laws.