How to Prepare W-2s for Church Employees and Ministers

Richard Hammer at Managing Your Church posted an excellent article on how to prepare W-2's.

Churches need to report each employee’s taxable income and withheld income taxes as well as Social Security and Medicare taxes on Form W-2, and furnish copies B, C, and two of the 2011 Form W-2 to each employee by January 31, 2012. Copy A should be submitted to the Social Security Administration by February 29, 2012, along with Form W-3, Transmittal of Wage and Tax Statements. If your employees give their consent, you may be able to furnish Forms W-2 to your employees electronically. Electronic forms are due April 2, 2012. See IRS Publication 15-A for additional information.

Although W-2s are not difficult to prepare, there are some tips you should know. First, be sure to add cents to all amounts. Make all dollar entries without a dollar sign and comma, but with a decimal point and cents. For example, $1,000 should read “1000.00.” Government scanning equipment assumes that the last two figures of any amount are cents. If you report $40,000 of income as “40000,” the scanning equipment would interpret this as 400.00 ($400)!

Continue reading at How To Prepare W-2s.

If you have any questions about this topic, tax law changes, business tips, or how to become a client, please call us at 954-591-8290 or use our Contact form.