Quarterly Reports

by Sue Prime
(North Kingsville,Ohio)

The pastor at this small Presbyterian Church is a Commissioned Lay Pastor hired by the church Session. As the treasurer for this church, I prepare a W-2 for the pastor along with W-2s for the three other employees. I have been preparing the W-2s on-line and submitting them on-line. The program picks up the total of all the income of the employees and the pastor and the IRS thinks the church underpaid because of the pastor's salary being included. I have been going round and round with them explaining that the pastor has paid the money they are saying the church owes as he is considered self-employed. On line 1 of the 941, I put 4 which includes the pastor. Online 2 I put the total of all 4 salaries. On line 5a I put the total of the 3 employees salaries excluding the pastor's salary and calculate the the SS and MC withholdings using that number. On the year-end submittal form there is no place for that line 5a total and it just automatically totals the line 1 figures. Now the IRS thinks we didn't pay the right amount of withholding. Am I doing the quarterly reports or the year-end report wrong?? I cannot find an answer to this question anywhere. Sue