Taxable SS and Medicare wages on Form 941

[bjwhitson]

I am using PC+ Ver 11.1 and am trying to reconcile the 941 report with my manual records. Box 2-wages, tips and other compensation- correctly shows all taxable wages for all 6 employees-pastors and other staff-and includes salary and SS reimbursements. However, Box 5a -taxable Social security wages- and Box 5c-taxable Medicare wages- are overstated, but not by an amount that I can easily identify. I have checked all of the Item Descriptions and the pastors' salary descriptions only have Federal and State Income tax boxes checked. All other salary descriptions are showing as taxable. Blocks 5a and 5c should only show the salary amount for non-pastor employees. Any idea where else I can check?

Betsy

PC+ user since 2007

[JohnDMeyers]

We had an issue with step 4, checking the box and going to step 6e.

Make sure you have checked (or unchecked) that box correctly.

If I think of something else, I will chime back in.

[NeilZ]

Um ... have you looked at any housing allowance you may be giving? Housing Allowance is not liable for Income Tax Withholding (unless its over the local average for housing prices), but is liable to SS & Medicare withholding.

[bjwhitson]

Neil,
we've never included the pastors' salary or housing allowance in the taxable Social Security or Medicare wages (5a or 5c) because we don't withhold that tax or pay it on their behalf. While we reimburse them for the entire self-employment tax (13.3% for 2012), it's just considered income to them. The Housing allowance item description is marked as Housing allowance on the Tax Option block.

John, I didn't have that box checked.

Is there any report that I can print that shows what is included in that box?
Betsy

[JohnDMeyers]

It either does or doesn't include SSI wages in the SSI wage box on your W2.

I think checking it includes the wage amount but indicates that you are not participating in SSI for your pastors.