We give the adminstrative secretary a certain amount to put towards a pension plan of her choice. This is done once a year usually in January. Her choice is to open a regular CD. How do I handle this? Through payroll with taxes withheld included in her regular paycheck or a separate paycheck? Is it legitimate to write her the full amount in AP?
We have another employee who chooses to add her amount to an already existing IRA at a bank. How is that handled?
Pension
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Matt
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Unless the church has set up a formal retirement plan the money that you give to both employees is considered taxable income. It should be handled through payroll and taxes should be withheld. The amount can be included in the regular paycheck or a separate paycheck can be written. Subject to the IRS rules the 2nd employee can take a deduction for the amount put into the IRA on their income tax return.