How Do We Report Insufficient Salary?

We approved our Full-time Senior Pastor for a $36K 2019 Compensation package: $18K Salary/$18K HA but the church could only afford to pay him a little over $16K total in 2019.

How do we handle the $16K on the W2? Should we report it?

Please advise. Thank you

Comments for How Do We Report Insufficient Salary?

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Feb 05, 2020
Each Paycheck Should have been Classified
by: Vickey

Each paycheck should have been split and properly designated.

For example, our church payroll clients tells us how to "split" each paycheck between salary, housing allowance, SECA allowance, etc. If that "set" pay amount changed, the church would have to instruct us how to "split" the amount of compensation paid for that particular pay period.

If that did not happen, you should contact a CPA or knowledgable tax professional on what your next steps should be and how to report that compensation.

I can recommend:

Ministry CPA:https://www.ministrycpa.org/

and

Elaine Sommerville:https://www.nonprofit-tax.com/

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If you want to DIY your payroll, I highly recommend you look at using Gusto! It is very user friendly and their support is awesome! Plus they know how to set up and maintain payrolls for churches and nonprofit organizations.

Note: I am a "partner" of Gusto, but as I have told you before ... I never recommend anything that we or our clients have not tried and love =)



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