Retirement Deduction

[silvertown]

Our pastor has recently started paying into a retirement account through Guidestone Financial Resources. He wants to pay $20 per payday. Can I just reduce his pay by $20 and cut a check to Guidestone every payday and take that $20 from the Salary line item?

[Zorak]

Set up a new pay item to process the deduction. Do this on the Maintain Item Descriptions screen found under Accounting > Payroll > Setup. The item will be an "Other Deduction". There is a checkbox option labeled "Retirement". Check that and the pretax settings will be handled automatically.

If the church is paying into the retirement account as well, you can also set up a new employer liability item for the employer portion.

[NeilZ]

FWIW .. you have to show that he is voluntarily deducting the amount from his salary. If it is indeed a pretax deduction, the IRS must be informed about it, and the total amount will appear on the W-2 in the proper box with the proper notation at the end of the year. You may have to setup a liability account to hold the deductions, which you would then pay out from as you do for normal Taxes (Credit the checking, Debit the liability).

[silvertown]

Set up a new pay item to process the deduction. Do this on the Maintain Item Descriptions screen found under Accounting > Payroll > Setup. The item will be an "Other Deduction". There is a checkbox option labeled "Retirement". Check that and the pretax settings will be handled automatically.

If the church is paying into the retirement account as well, you can also set up a new employer liability item for the employer portion.

When I go to Maintain Item Description there is not "Other Deduction".There is only Taxable, Non-taxable, housing allowance, advanced EIC

[NeilZ]

Set up a new pay item to process the deduction. Do this on the Maintain Item Descriptions screen found under Accounting > Payroll > Setup. The item will be an "Other Deduction". There is a checkbox option labeled "Retirement". Check that and the pretax settings will be handled automatically.

If the church is paying into the retirement account as well, you can also set up a new employer liability item for the employer portion.

When I go to Maintain Item Description there is not "Other Deduction".There is only Taxable, Non-taxable, housing allowance, advanced EIC

Select Other Deduction, the next screen will allow you to enter the new Item Number, Description, Liability Account (if you don't have one setup, you can create an account by clicking on the PLUS in a Circle button).

The next thing on the screen are the Tax Options pull-down list. You'll find the Retirement Deduction listed there. The Box 12 code will then be available to select the type of Retirement Deduction it is, 401K, 403b, etc.

You can find out more info by clicking the F1 HELP key with the screen open.

[silvertown]

Set up a new pay item to process the deduction. Do this on the Maintain Item Descriptions screen found under Accounting > Payroll > Setup. The item will be an "Other Deduction". There is a checkbox option labeled "Retirement". Check that and the pretax settings will be handled automatically.

If the church is paying into the retirement account as well, you can also set up a new employer liability item for the employer portion.

When I go to Maintain Item Description there is not "Other Deduction".There is only Taxable, Non-taxable, housing allowance, advanced EIC

Select Other Deduction, the next screen will allow you to enter the new Item Number, Description, Liability Account (if you don't have one setup, you can create an account by clicking on the PLUS in a Circle button).

The next thing on the screen are the Tax Options pull-down list. You'll find the Retirement Deduction listed there. The Box 12 code will then be available to select the type of Retirement Deduction it is, 401K, 403b, etc.

You can find out more info by clicking the F1 HELP key with the screen open.

There is not an "Other Deduction" to click.

[Zorak]

On the Maintain Item Descriptions screen, click Add. When it asks what type of item you want to add, the options are income, tax deduction, other deduction, contribution deduction, employer liability, and taxable benefit.

If you don't see those options, you might not be on the Maintain Item Descriptions screen.

Actually, this advice is for Versions 11 and 11.5. If you have an older version of the software, it is much more complicated:

https://www.powerchurch.com/support/19/ ... plus-v6-10