This is the first step because it is required to bring the church into existence legally.  This registration usually happens with the Secretary of State, but some states handle it under a different department (e.g., Wisconsin handles registration under the Department of Financial Institutions, Hawaii handles registration under the Department of Commerce and Consumer Affairs, etc.). This step generally only requires Articles of Organization, which may also be referred to more precisely as "Articles of Incorporation" because the standard and predominant form of legal entity in the American church is the Corporation. That said, some states are moving to a one-stop setup method where they also register the new church for withholding tax and labor accounts while forming the legal entity (Virginia is one example). A filing fee of a few hundred dollars is common for this registration. Many states freely offer up sample Articles of Organization, however, it's easy for the uninitiated to file the wrong form or inadvertently leave out key provisions. So, this filing is usually best left to the experts.

An Employer Identification Number is a nine-digit number issued by the IRS in order to uniquely identify entities. Yes, churches are exempt from paying federal taxes, but if your church plans to collect and disburse money (or get a bank account), you'll need an EIN.

This can be handled in 30 minutes with the right information in hand. The Articles of Organization, and the name, address, full SSN, and formal title of the primary church leader are the primary things needed. The rest of the information required is generally standard across different churches.

This is truly a DIY step, but the key thing is to be absolutely certain that the application information (including spelling) is correct. It's a huge pain to update EIN information later.

To learn more about EINs, visit:
https://www.irs.gov/charities-non-profits/employer-identification-number

Register online for an EIN with the IRS via form SS-4 here:
https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online

Your church will need a constitution and bylaws to define your organization, define your purpose, describe how you will operate, and much more. While it can be helpful to start with an existing church's constitution and bylaws and make necessary adjustments to accurately describe your new church, it's wise to make sure you've addressed everything churches need today.

It's important to note the difference between your Constitution & Bylaws and the Articles of Organization:

• The Articles of Organization primarily serve to bring the church into legal existence with the state and to establish the church as a nonprofit corporation under state law. Properly prepared and executed Articles of Organization also ensure the church's ability to be recognized as tax-exempt under federal law. Articles of Organization generally say very little about how the church will practically operate.

• By contrast, your Constitution & Bylaws describe in a lot more detail what the church believes and how the church will operate. Traditionally, a Constitution would describe the foundational beliefs and principles of the church while Bylaws would describe practical matters of governance and function. The modern trend for several years now is to include all of the Constitution and Bylaws information in one document and simply refer to that document as Bylaws, but there isn't any real legal significance to that change. The key point is that every* church needs Articles of Organization and Bylaws.
  Most churches also include some form of their core beliefs in their Bylaws irrespective of what that document is titled, though there is no need to replicate something like the entire Baptist Faith and Message. A reference to the BFM with some context is perfectly adequate. Stating the core beliefs in the Constitution/Bylaws is not strictly required in a legal sense, but we consider it to be a best practice
  
  *You do not need the state's blessing to start a church in any spiritual sense whatsoever, but there are great benefits and protections afforded to churches for registering with the state, so that is standard practice for 99% of American churches

Overall, the Articles of Organization and Constitution & Bylaws are complementary documents, but they serve different roles and provide different levels of detail.

What about other documents, such as a Church Covenant or Child Protection Policy?

We recommend breaking out a Child Protection Policy separately, both because of the level of detail that policy likely contains and because that policy should be easier to update or amend than a church's bylaws. As for the church covenant, we've seen churches include it in the C&B and make it separate. This is up to your church.

You need two state tax numbers: one for income tax withholding, and the other is for unemployment insurance withholding.

To find the right place on the web for your state, click here.

Churches are automatically granted 501(c)(3) status, so there's nothing your church has to do to be tax exempt.

If you want to obtain official recognition, you'll need to file Form 1023 at the link below, however we do not generally recommend this.

If you want to do this or talk about it, we highly recommend you hire an attorney to handle this - Dime can help!

Learn more about the tax-exempt regulations by visiting the IRS' guide here:
https://www.irs.gov/pub/irs-pdf/p1828.pdf

To access & file Form 1023, click here:
http://www.irs.gov/pub/irs-pdf/f1023.pdf

Churches don't pay taxes, but pastors do. It's important that you understand how the church will pay its staff, how the IRS expects pastors to report their income, and when the important deadlines are.

Don't wait until April 14th to think about taxes. Find a qualified and informed tax professional today.

Contact us today at tax@dimeaccounting.com to learn how we can help!

We recommend specific insurance policies that best serve churches.

• General liability - you won't be able to rent a facility unless you have general liability insurance. We recommend a minimum of $1 million in coverage.

• Worker's compensation - when you have 3 to 5 employees or 20 volunteers.

• Pastoral liability - covers people doing stupid things and blaming the pastor. Make sure this policy covers pastoral counseling. This should be $500k - $1 million.

• Sexual Misconduct - This should be at least $1 million, however obtain as much as you can afford.

We recommend Brotherhood Mutual or Guidestone for your church's insurance provider.