4. 4th Quarter Federal 941, W-2, and W-3 Prep
At the end of the year, 4th quarter payroll tax returns along with W-2 and W-3 form preparation are added to your “To Do” list. Don’t make the common mistake of allowing PowerChurch to print the 4th quarter federal 941 and W-2 forms without doing the following:
Determine if there is additional taxable income that should be manually added to the 4th quarter 941 and W-2 forms.
Common additions include, but are not limited to:
Cash or non-cash gifts to employees
Non-accountable reimbursements to employees
Taxable moving expense reimbursements
Personal use of a church owned vehicle
Taxable life insurance
Taxable health insurance
Gifts to volunteers…if the annual total per volunteer is $100 or more
Print payroll reports from PowerChurch to prove out the amounts showing on the federal 941 and W-2 forms.
Tip: If the payroll items are not set up correctly, they may not flow to the federal 941 or W-2 forms correctly.
NOTE: In our experience, 90% of church payrolls would not pass an IRS audit. It is very important to:
Understand IRS rules related to church payroll.
Make sure payroll is set up properly.
This newsletter contains information about churches and tax matters. This information is general in nature and does not consider your organization’s specific circumstances. This information should not be treated as an alternative to taxation advice from an appropriately qualified professional. If you have specific questions, please consult Stewardship Resources, LLC (a division of Summit Tax & Accounting, PLLC) at (217) 877-6766 for advice tailored to your need.
