IRS Releases New Tax Withholding Estimator
The IRS has released an enhanced Tax Withholding Estimator that incorporates changes from the redesigned Form W-4, Employee’s Withholding Certificate. The new Form W-4 includes changes that can affect employees’ refunds or the amount of tax they owe. For example, income tax withholding is no longer based on the employee’s marital status and withholding allowances,…
Common Payroll Errors to Avoid
Let’s face it. Managing church payroll – and the avalanche of payroll regulations – means you’re under a lot of scrutiny, and you have to get it right. Each year sixty percent of the church W-2 forms are reported with errors. This is created by the lack of understanding of the reporting requirements of taxable…
FAQs on the 2020 Form W-4
1. Why redesign Form W-4? The new design reduces the form’s complexity and increases the transparency and accuracy of the withholding system. While it uses the same underlying information as the old design, it replaces complicated worksheets with more straightforward questions that make accurate withholding easier for employees. 2. What happened to withholding allowances? Allowances are no…
It’s here! IRS rolls out final Form W-4 for 2020
The IRS has released the final 2020 version of Form W-4, Employee’s Withholding Certificate. The IRS stood its ground and dropped the word “Allowance” from the title of the form, as well as dropping withholding allowances from the body of the form. Filling out and submitting a Form W-4, Employee’s Withholding Allowance Certificate, the Employee’s…
Avoid Classifying Employees as Independent Contractors
Q. Can churches classify paid workers as independent contractors to avoid paying FICA or withholding income taxes from them? A. No. Churches cannot classify paid workers as independent contractors in an effort to save money. They must follow the law. For a non-clergy employee, the church generally must withhold income and FICA (Social Security and…
Reporting taxable perks for pastors – Q&A
Question: Our pastors are allowed to charge their gym memberships on the church credit card. Is there a specific box on the W-2 where this is reported? Answer: No. The full fair market value of gym memberships is taxable and reportable on the pastor’s W-2s as wages in Box 1.
FLSA Changes: Updating Your Policies and Practices
Have you reviewed your policies and practices in light of the upcoming overtime changes? Reclassified employees may have to follow procedures and policies that didn’t apply to them before—or that you didn’t have. Changing habits can be a challenge, but changing those of your formerly exempt employees with respect to hours worked and tracked is…
Church Responsibilities – I-9 Audit
In accordance with federal law, all individuals hired by the church are required to establish and certify their identity and right to work in the United States. Individuals employed in the United States are required to complete Section 1 of the Form I-9 no later than their first day of employment. This may be completed…
Payroll Compliance – Form I-9
We receive a lot of questions about the I-9—the form used to verify the identity and employment authorization of all individuals hired for employment in the United States. Here are some of the most common: 1: How Should I-9s Be Stored? Separately. We recommend that you keep all I-9s in either a separate master file or…
Are churches exempt from unemployment insurance?
Unemployment benefits are available to workers who lose their job involuntarily because of reasons out of their control and meet basic state law eligibility requirements. Unemployment benefits are administered at the state level and offer temporary financial help to workers who have lost their job and meet state law requirements. Most employers are required to…
