Payroll-Item Description setup

[debbieg]

I am not sure that I have the item descriptions set up properly for tax purposes for pastor payroll items. We have 3 different payroll items for pastors - (1) salary, (2) housing, (3) SS offset. For the salary and SS offset, i have the "Federal withholding" box checked. For the housing, I have the drop down box by "Tax options" set to "Housing Allowance".

What should show on the 941 report in box 2 (Wages, tips and other compensation)? Obviously, it contains all the gross salary for regular employees. But what pieces of a pastor's pay should go there? All of it? Just the salary or salary + SS offset? I had errors in 2010 that the IRS is now hassling us about. I have to file corrected 941s and i want to make sure i do them right this time.

Use the following fictional salaries as an example to let me know what amounts you would fill in on a quarterly report....

regular staff.......$20,000
pastor salary.......$ 2,000
pastor housing....$ 2,500
pastor SS offset ..$ 500


BTW...we are PC+ 11.5

[NeilZ]

I am not sure that I have the item descriptions set up properly for tax purposes for pastor payroll items. We have 3 different payroll items for pastors - (1) salary, (2) housing, (3) SS offset. For the salary and SS offset, i have the "Federal withholding" box checked. For the housing, I have the drop down box by "Tax options" set to "Housing Allowance".

What should show on the 941 report in box 2 (Wages, tips and other compensation)? Obviously, it contains all the gross salary for regular employees. But what pieces of a pastor's pay should go there? All of it? Just the salary or salary + SS offset? I had errors in 2010 that the IRS is now hassling us about. I have to file corrected 941s and i want to make sure i do them right this time.

Use the following fictional salaries as an example to let me know what amounts you would fill in on a quarterly report....

regular staff.......$20,000
pastor salary.......$ 2,000
pastor housing....$ 2,500
pastor SS offset ..$ 500


BTW...we are PC+ 11.5

Box 2 should show the Salary and SS Offset .. these are classified as income. The Board of Pensions of the PC(USA) puts out a tax guide that may help:
http://web.pensions.org/Publications/pe ... ax-000.pdf

[debbieg]

Neil,
that's what i thought. So then in my example, Box 2 would show $22,500, right?
I think that is now coming out correctly on my 941's. But when I look at the W3 that would get generated, it seems to show the regular staff salaries plus the housing allowance in box 1. That would then not match with the totals from 941s. Do you think the W2/W3 report is using different settings?
Debbie

[NeilZ]

Neil,
that's what i thought. So then in my example, Box 2 would show $22,500, right?
I think that is now coming out correctly on my 941's. But when I look at the W3 that would get generated, it seems to show the regular staff salaries plus the housing allowance in box 1. That would then not match with the totals from 941s. Do you think the W2/W3 report is using different settings?
Debbie

I'm not an expert on W3s ... you may have to wait until Monday when the Powerchurch staff gets in to answer this one.