- Listing wages or withholdings in Boxes 3 through 6. Clergy are treated like self-employed individuals in regards to Social Security and Medicare taxes. They should not have taxable Social Security or Medicare wages, and they should not have Social Security or Medicare withholdings.
- Including the Housing or Parsonage allowance in places that it shouldn’t be. These allowances should be listed in Box 14 if they are listed. They should not be in the Box 1 total or included in Box 12.
- Forgetting to put employee 403(b) retirement deferrals in Box 12, or worse, including them as taxable income in Box 1. If you elect to contribute some of your salary to a 403(b) retirement account and defer it until retirement, you should not be taxed on that income.
Does your Church need a corrected W-2? Clergy Financial Resources can make the corrections for you. Visit our website at https://www.clergyfinancial.com/services/church-payroll/easy-w-2-filing-is-a-click-away/ for more details.
Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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