Wages report on w-2

by Tina
(USA)

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I am a pastor of a small congregation that is paid 4000.00 yearly.

For 2015 1000.00 was reported as wage each quarter as income on 941 quarterly & state withholding and I elected to have federal and state taxes withheld.

Also at the beginning of the year the board designated the 4000.00 as housing allowance, when filing my taxes I received a w-2 with 1000.00 in box 2 as income is this correct?

Vickey's Reply
No. There are several items of concern in your post. First of all, a housing allowance is not reported on the quarterly 941s. See this page on How to Prepare a Quarterly Form 941

If your compensation was reported on line 2, it is considered taxable compensation and should be reported in Box 1 on your W-2.

Any federal income tax withheld from your compensation will be reported in Box 2 on your W-2.

If all your income was approved as a housing allowance then your quarterly 941s and W-2 all need to be amended.

I advise you to hire a Tax or CPA Firm familiar with churches and ministers such as the firm I work for: Wisdom Over Wealth to amend and straighten out your compensation reporting.

Comments for Wages report on w-2

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Feb 08, 2016
Has your Church filed its W-3 yet?
by: Vickey

I forgot to add that if the Form W-3 has not been filed yet, your church can just redo the W-2 and not have to file the corrected W-2/W-3...

HOWEVER...your W-2 and W-3 MUST match your quarterly 941 forms. So if those are incorrect...it is imperative to contact a knowledgeable tax professional to see what your next step needs to be.

Feb 08, 2016
Reporting a Housing Allowance
by: Vickey

One more thing:)

Housing Allowances can be reported in [Box 14] on a W-2 because Box 14 is an informational box ONLY and is used to report items to the recipient...not the IRS. Do NOT include any housing allowance payments in any other box on a minister's W-2.

A housing allowance amount is reported to the IRS by the minister on his personal return.

See more on housing allowances by clicking on "Topics" in the above navigation bar; clicking on "Minster Taxes" and clicking on the "Housing Allowance" article. Or you can copy and paste this address in your address bar: http://www.freechurchaccounting.com/housingallowance.html

Feb 10, 2016
Housing allowance
by: Anonymous

Read your comments on housing allowance. Where in W-3 transmittal do we put the housing allowance for ministers?

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