Online Filing of Forms W-2 and W-3
Churches and other church-related employers, along with other businesses, may file Forms W-2 and W-3 electronically by visiting the Social Security Administrations’ website at www.socialsecurity.gov/employer/. On the website, you will need to select “Business Services Online (BSO)” and register as a user. Once registered, you can upload electronic wage files or use the site’s “Create Forms W-2 Online” to send electronic information to the Social Security Administration. This option allows you to create “fill-in” versions of Forms W-2 for filing with the federal government and to print out copies of the forms for filing with state or local governments, distribution to your employees, and for your records. From the information filled in on the Form W-2s, a Form W-3 will be created for you.
Normally, the Form W-3 has to be filed by the end of February. However, when you file electronically, you receive an extra month to file because electronically filed W-2s aren’t due until March 31st. Once you submit your W-3 electronically, you will receive an acknowledgment receipt.
So if you need a little extra time to submit your Form W-3, using the electronic system is the way to go. In addition, it is simple, convenient, and quick.
Additional Tax Tips
During the holiday season in years past, each taxpayer use to receive another package in the mail from their favorite uncle. Yes, “Uncle Sam” would send a package immediately after Christmas that contains tax forms for filing your income taxes. As of December 2010, the IRS stopped sending out those tax forms, primarily because of the costs associated with such and the increasing number of tax filers who are using electronic filing. Even though you are not getting a tax package from Uncle Sam with all the forms and instructions, you should visit the Internal Revenue Services’ web site (Forms and Publications) to read the instructions carefully because, as in most years, a few things change each year. If you use a tax preparer, you should begin immediately to get your documentation together to present to him or her. Here are just a few tips:
- W-2 vs. 1099 – If you are a pastor or employee of a Church of God church or related entity, you should receive a Form W-2 from your employer before February 1. While many ministers (and churches) continue to claim that the minister is “self-employed” and therefore should receive a Form 1099, the church polity of our denomination makes it almost universal that our ministers are employees of the local church – and thus entitled to receive a W-2 rather than a Form 1099. Based upon case law, it seems rather clear that Church of God ministers have a dual tax status – they are employees for federal tax purposes but they are self-employed for Social Security purposes. While this topic is confusing and not subject to clarification in this brief forum, I would recommend that you visit our web site (www.benefitsboard.com) and review theTreasurer’s Manual or the Minister’s Compensation Manual where a more detail discussion on this issue can be found.
- Saver’s Credit – If you made contributions to a retirement plan (such as the Ministers’ Retirement Plan), you may be eligible for a tax credit, called the “saver’s credit.” This credit could reduce the federal income tax you pay dollar-for-dollar. The amount of the credit you can get is based on the contributions you make and your “credit rate”. The “credit rate” can be as low as 10% or as high as 50%, depending on your adjusted gross income – the lower your income, the higher the credit rate. The credit rate also depends on your filing status. To obtain more information on the Saver’s Credit, visit the Forms section of our web site (www.benefitsboard.com).
** Please refer to the Tax Information Manual on our website for more information concerning these topics.