Payroll Setup in V11

[blsvcma]

We just upgraded to V11 and have a few questions we're hoping someone can answer! Thanks in advance!

1) What is the purpose of the employer tax liabilities section of the payroll module? Is this information solely for generating the 941 report, or will it impact other areas of the accounting system?

2) Do you have to use the employer tax liability designation for items such as the employer's share of medicare and social security, or can you just list those as regular tax deductions? Upon conversion, the payroll module only listed the medicare portion as an employer's tax liability, but not the federal.

3) We also pay a portion of our pastor's 403B. Should an item like this be included on the employer's tax liability category, or would that cause it to be included when the 941 is generated? (we would not want it to be included in 941).

Thank you
Ann

[NeilZ]

We just upgraded to V11 and have a few questions we're hoping someone can answer! Thanks in advance!

1) What is the purpose of the employer tax liabilities section of the payroll module? Is this information solely for generating the 941 report, or will it impact other areas of the accounting system?

It will figure out the taxes, and because it asks for the liability and expense accounts it will create the transactions that will be posted to funds accounting to properly debit and credit the accounts.

2) Do you have to use the employer tax liability designation for items such as the employer's share of medicare and social security, or can you just list those as regular tax deductions? Upon conversion, the payroll module only listed the medicare portion as an employer's tax liability, but not the federal.

The only taxes that the employer has a share in paying is SSI and Medicare. If the conversion did not get the SSI, then something may have not been setup right in the older version.[/quote]

3) We also pay a portion of our pastor's 403B. Should an item like this be included on the employer's tax liability category, or would that cause it to be included when the 941 is generated? (we would not want it to be included in 941).

No, this is not a tax liability, however it is a liability because the church will be required to pay it. This Knowledge Base Article will help you with setting it up. It may be confusing initially, but remember anytime an employer contributes to a 401K/403B that contribution is taxable under Medicare and SSI. http://www.powerchurch.com/support/kb/k ... icle_id=17

Thank you
Ann

Since you're in the middle of the payroll conversion, you may want to look at this tutorial:
http://www.powerchurch.com/support/vide ... ideo_id=27

[blsvcma]

Thank you for your response. One other question we have:
When we run a "test" 941 from the 1st quarter of the year (which would have been from the Version 10 powerpoint), line 2 is incorrect by about $6,000, and line 5a is about $1394 off. Is this just because something did not convert correctly from Version 10? We did check all of our payroll items in the maintain item descriptions screen. Any suggestions as to why 941 is not pulling the correct numbers?

[blsvcma]

One other question......
Our pastor receives a "housing allowance" that is only taxable on PA state taxable. Under "maintain item descriptions" should we designate the "tax options" to "more taxes" and then just click "state tax"? Or should we instead just designation the "tax options" to "housing allowance"? Or perhaps it doesn't matter either way? We are required to deduct PA state taxes from his housing allowance. Thanks again.

[NeilZ]

First off, please its Powerchurch not Powerpoint. That keeps throwing me off.

1. Line 2 is all wages and salaries that is taxable by state and federal income tax. If this line is off, then something in your version 10 setup for taxable wages, or in your v11 taxable wages is not setup properly. Housing allowances should not be included here. But SSI contributions to the pastor's salary should be.

Same with 5a, the Pastor's salary and any SSI contributions should not be included because the minister pays Self-Employment Tax on this.

2. The Housing Allowance is taxable under PA state tax if the minister does not live in a manse or parsonage. In this case I would use the More Options under the Tax Options, you should see a PA state tax option there if you have this setup in Powerchurch, Powerchurch should place this in the State Taxable wages block on the W-2. You will also see Housing Allowance box on the same line as the More Options I'm fairly sure you should have that checked so that the Housing Allowance is printed in the correct box on the W-2.

Hope this helps.