MinistryCPA - Corey A. Pfaffe, CPA, LLC

Forms 941 and 944 are both used to report payroll expenses and taxes to the IRS. The forms include information such as total wages paid, number of employees, income taxes withheld, group term life insurance, sick pay, tips, Social Security taxes (employer and employee portions), and Medicare taxes (employer and employee portions). These forms report the total liability that the employer owes to the IRS. Both forms have the same purpose, but there are a few differences.  Even though the forms are used for the same purpose, there is one main difference. Form 941 is filed quarterly and is the standard payroll reporting form that employers use. Form 944 is filed annually and can only be filed by employers who have less than $1,000 in payroll tax liabilities.  If your organization... Has employees Has more than $1,000 in Federal Tax liability (Federal income withholdings, Medicare, and Social Security) Has not received permission from the IRS to file Form 944 Then you should file F...

This is another posting in the MinistryCPA Top 10 series: Understanding what to offer a pastor as part of his compensation package can be a difficult task. There are a number of different factors to consider. Variables such as compensation, insurance, housing allowance, taxes, and retirement all play into compensation. We have compiled a list of factors that a church should consider when designing a compensation package for the pastor. Every church situation is unique, and each church should analyze what it can actually afford. 1. How does the church determine an appropriate compensation rate? Determining an appropriate compensation level can be a difficult task in a small ministry. There are a few factors that can be used to help determine a fair compensation for the pastor. The first factor that should be taken into consideration is the needs of the pastor. If the church wants a pastor to work full time, then it must consider what he needs to be paid to support himself and his fami...

This is another posting in the MinistryCPA Top 10 series:  Understanding payroll can be a difficult task in any business. Knowing how to onboard new employees, pay them, file tax documents, and deal with other benefits is a daunting task. We have created a list of some of the top payroll compliance issues that we see here at MinistryCPA. 1.       Employee vs Independent Contractor Understanding the difference between an employee and an independent contractor is essential to the payroll process. If a person is classified as an employee, then the business is responsible for employment taxes such as social security, Medicare, unemployment, and income tax withholding. If the person is classified as an independent contractor, the business is not responsible for any of these taxes.  There are three factors that help a business determine whether an individual is an employee or an independent contractor. These three factors are the degree of behavioral...