Why are Churches Tax Free?

Tax Free Church Deductions Exempt Donate

Tax-Free Church

In the United States, for many years churches have been exempt from income taxes. The tax exempt status of churches is part of the reason why we receive deductions when we donate to churches. This is because churches and religious organizations generally operate like charities because they provide to those who are in need and also to society in general. Many also believe that churches are tax exempt because of the constitutional provision which requires that we separate church and state. Separating church and state is the government’s way of keeping its hands off of religious organizations.

While most churches are naturally tax exempt, they must follow the criteria listed below in order to be able to qualify 100 % for exemption.

Criteria:

  • Distinct legal existence;
  • Recognized creed and form of worship;
  • Definite and distinct ecclesiastical government;
  • Formal code of doctrine and discipline;
  • Distinct religious history;
  • Membership not associated with any other church or denomination;
  • Organization of ordained ministers;
  • Ordained ministers selected after completing prescribed study;
  • Literature of its own;
  • Established places of worship;
  • Regular congregations;
  • Regular religious services;
  • Sunday schools for religious instruction of the young; and
  • Schools for preparing its members.

Still not sure if your church qualifies for tax exempt status? Contact one of the CPAs in our office or simply leave your questions in the comment section below. We are available to help you in any manner we can to ensure you are getting the tax credits and deductions you need.

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