Christmas Bonus

[northside]

How do you handle a Christmas bonus in Powerchurch?
Do you run it through payroll as a special item and take taxes out?

[BroDave]

The Christmas bonus is reportable income, so I would say, yes, you have to take taxes out. The reason I am not sure is because our pastor (Small church) is considered self-employed, so he has his own accountant for tax purposes. I do, however report the amount of his Christmas bonus to the accountant. Whether he has to pay Medicare tax, I don't know.
I hope this helps.

[NeilZ]

The Christmas bonus is reportable income, so I would say, yes, you have to take taxes out. The reason I am not sure is because our pastor (Small church) is considered self-employed, so he has his own accountant for tax purposes. I do, however report the amount of his Christmas bonus to the accountant. Whether he has to pay Medicare tax, I don't know.
I hope this helps.

This is INCOME so it needs to be listed as income on the W-2, should be listed in Federal Taxed wages (Box1 on the W-2), even if you do not withhold Federal Taxes. All pastors are considered self-employed, so they are subject to Fed Income Tax and SECA (SS & Medicare) Taxes.