Church disaffiliation/separation

[dalzellumc]

Our church will become independent with a new corporation and EIN effective July 1, 2023. Our tax year has been (and will be) a calendar year. Has anyone done this in PC yet? I'm wondering if I can have two different entities with my subscription, in order to close one out and start a new one? I haven't given it much thought yet, but believe it would be good to still do a calendar year report at the end of December that includes both entities (since we will continue to operate as we always have).Will I need to do that manually?

[NeilZ]

Our church will become independent with a new corporation and EIN effective July 1, 2023. Our tax year has been (and will be) a calendar year. Has anyone done this in PC yet? I'm wondering if I can have two different entities with my subscription, in order to close one out and start a new one? I haven't given it much thought yet, but believe it would be good to still do a calendar year report at the end of December that includes both entities (since we will continue to operate as we always have).Will I need to do that manually?

Since you're talking 'subscription', I'm assuming Powerchurch Online, if you're using the desktop version, then there is no need, as you have what is basically a 'site license'.

I really don't know if you'd have to do the reporting manually, other than for Income Taxes, Federal, state and local. I would do some research (or get some advice from an accountant) on what you need to do about tax reporting. I'm surprised that they're requiring you to get a new EIN as you're just reconstituting the corporation under a new name, and the new corporation is a successor to the old one. Of course, I'm not an accountant, so being logical about what the IRS requires often causes pain.

[sgbani]

Our Church is going through the process as well, but we use PC+ desktop, not online.
So, for us it is going to be a bit easier to implement the change because we use the desktop version.
The real issue is one has to properly keep track of payroll tax data and deposits, plus W2's the following year.
I say this because once you change entities (name and EIN), every employee will get two (2) W2's, and potentially up to two (2) 1099's for those requiring one.
The W2 forms would have to be manually adjusted to account for the changes.
While we use PC+ to generate the needed data/reports / draft documents, we use a third-party online service to submit and mail out the W2 forms to employees.

We are also on a July 1st change-over date. It is convenient because it is a new quarter and half the year left. Since our church does payroll as salary and monthly payroll, the calculations become easier.

Neil is correct, having a conversation with an accountant familiar with mid-year changes is advised. The biggest issue we are facing is ensuring a backup of the 'old entity' is intact through end of June, to preserve that data, and then continue on with the new entity without making any mistakes / missing entries.
Basically, January 2024 is not going to be as "fun" as year's past, because of the double forms to complete and file.

[dalzellumc]

Thank you for your replies. I guess I'll experiment with this some in advance. As an online user, I am still able to do backup and restore. Our attorneys strongly encouraged us to create a new corporation and get a new EIN instead of just changing names.