maintenance-checklist

Ongoing requirements to maintain legal compliance and tax-exempt status after formation.

Monthly Tasks

Financial Management

• Reconcile bank statements

  • Match all transactions
  • Investigate discrepancies
  • Document reconciliation

• Process payroll taxes

  • Withhold and deposit federal taxes
  • File Form 941 quarterly
  • Maintain payroll records

• Review budget vs. actual

  • Track spending against budget
  • Note variances for board
  • Adjust as needed

• Issue contribution acknowledgments

  • For donations $250+
  • Include required information
  • Send promptly after receipt

Record Keeping

• File receipts and invoices

  • Organize by category
  • Attach to accounting records
  • Store per retention policy

• Update accounting records

  • Record all transactions
  • Maintain audit trail
  • Back up digital records

Quarterly Tasks

Governance

• Hold board meeting

  • Review financials
  • Approve minutes from previous meeting
  • Address pending business
  • Document all decisions

• File Form 941 (payroll taxes)

  • Due: April 30, July 31, October 31, January 31
  • Report wages and taxes withheld
  • Deposit taxes timely

Financial Review

• Prepare financial statements

  • Income statement
  • Balance sheet
  • Present to board

• Review cash flow

  • Ensure adequate reserves
  • Plan for upcoming expenses

Annual Tasks

January

• Issue annual giving statements (by January 31)

  • Summary of all donations
  • Required for donor tax purposes
  • Include church name, address, EIN

• File Form W-2 for employees (by January 31)

  • Distribute to employees
  • File with Social Security Administration

• File Form W-3 (by January 31)

  • Transmittal of W-2s
  • Submit with W-2 copies

• File Form 1099-NEC for contractors (by January 31)

  • For payments $600+ to non-employees
  • Also file Form 1096 transmittal

• File Form 5578 (by January 31 if applicable)

  • Annual certification of racial nondiscrimination
  • Required only if church operates a school

February-March

• Review insurance policies

  • Check coverage adequacy
  • Compare quotes if renewal approaching
  • Update for any changes

• Conduct annual financial review

  • Internal review or external audit
  • Identify any issues
  • Report to board

April

• File Form 941 (Q1 payroll)
  • Due April 30
  • Quarterly payroll tax return

May

• File Form 990-T (by May 15 if applicable)
  • Only if unrelated business income > $1,000
  • Churches with UBIT must file

State Filing Deadlines (Varies by State)

• File state annual report

  • Check your state’s deadline
  • File with Secretary of State
  • Pay any required fees

• Renew state tax exemption (if required)

  • Some states require annual renewal
  • Others are one-time

• File state payroll reports

  • Unemployment insurance
  • State income tax withholding
  • Varies by state

Mid-Year Review

• Review governance documents

  • Bylaws still accurate?
  • Policies current?
  • Update as needed

• Verify background checks current

  • Per policy schedule
  • For all workers with minors

• Review employment practices

  • Job descriptions current?
  • Compensation appropriate?
  • Policies followed?

Fall

• Prepare annual budget

  • For upcoming fiscal year
  • Present to board for approval
  • Plan for expenses and income

• Review tax-exempt compliance

  • No prohibited political activity?
  • Lobbying within limits?
  • No private inurement?

December

• Complete year-end accounting

  • Close books for fiscal year
  • Prepare for annual statements

• Annual meeting preparation

  • Schedule congregational meeting (if required)
  • Prepare reports and presentations

Periodic Tasks (Every 3-5 Years)

Governance Review

• Comprehensive bylaws review

  • Laws change
  • Church structure may evolve
  • Document amendments properly

• Board training/orientation

  • Fiduciary duties
  • Compliance requirements
  • Recent legal developments

• Conflict of interest policy review

  • Still comprehensive?
  • Being followed?
  • All disclosures current?

Legal Review

• Review articles of incorporation

  • Still accurate?
  • Purpose statement current?
  • Amendment needed?

• Consult with attorney

  • Review legal compliance
  • Update policies as needed
  • Address any concerns

Insurance Review

• Comprehensive coverage review
  • Coverage limits adequate?
  • New risks to address?
  • Competitive pricing?

Compliance Red Flags to Avoid

Political Activity (Strictly Prohibited)

DO NOT	Alternative
Endorse candidates	Discuss issues, not candidates
Distribute campaign materials	Voter registration (non-partisan)
Host political fundraisers	Host candidate forums (all invited)
Use church funds for campaigns	Educate on issues only

Private Inurement (Strictly Prohibited)

Red Flag	Compliant Practice
Excessive compensation	Reasonable, documented salaries
Loans to insiders	No personal loans
Personal use of church assets	Document all asset usage
Insider transactions	Arm’s length, disclosed

Record Keeping Failures

Failure	Consequence
No meeting minutes	IRS questions governance
Missing financial records	Audit problems, penalties
No contribution records	Donor deduction issues
Lost employment records	Employment disputes

Emergency Compliance Situations

If IRS Audit Notice Received

1. Do not panic - churches are rarely audited
2. Gather all requested documentation
3. Consult with attorney or CPA
4. Respond within deadline
5. Cooperate fully and professionally

If Tax-Exempt Status Questioned

1. Review IRS determination letter
2. Verify ongoing compliance
3. Document church activities
4. Consult legal counsel
5. Gather evidence of church characteristics

If Employment Claim Filed

1. Contact insurance carrier immediately
2. Document everything
3. Do not discuss with others
4. Consult employment attorney
5. Preserve all records

Annual Compliance Calendar

Month	Task
January	W-2s, 1099s, giving statements, Form 5578 (schools)
February	Insurance review, year-end financial review
March	State annual report (varies), Q4 payroll reports
April	Form 941 (Q1), budget mid-year check
May	Form 990-T (if UBIT), background check review
June	Mid-year governance review, board retreat
July	Form 941 (Q2), policy review
August	Budget planning begins
September	Annual meeting preparation, compensation review
October	Form 941 (Q3), budget finalization
November	Board approval of budget, year-end planning
December	Year-end close, giving campaign, thank donors

Compliance Resources

IRS Resources

• Publication 1828: Tax Guide for Churches
• Churches & Religious Organizations
• Exempt Organization Tax Tools

State Resources

• Secretary of State website (annual report requirements)
• Franchise Tax Board/Revenue Department (state tax exemption)
• Attorney General (charitable registration)

Professional Help

• Church CPA/accounting firm
• Nonprofit attorney
• Church insurance specialist
• Payroll service provider

Sources

1. Filing Requirements for Churches | IRS
2. Federal Law Reporting Requirements | Church Law & Tax
3. Non-Profit Tax Compliance Checklist 2025 | Pyramid Taxes
4. Records Retention for Ministries | ECAP
5. How Long to Keep Church Financial Records | ChurchTrac
6. Church Board Responsibilities | Smart Church Management
7. Church Employment Law | Church Law Center