2020 has been a year for the record books. Thankfully, we have made it to the last few weeks of 2020. As we prepare for a new year, there are a few financial items churches should do now to begin 2021 on the best foot!
Verify W2 information for 2020 to make sure employees receive accurate and timely forms at tax time.
Verify legal names, SSN and addresses for each employee.
Make sure all W2 information is being reported. This includes bonuses, personal use of company car, gifts to employees, reimbursed moving expenses, etc.
Make sure that all employee information is updated so that there isn’t a hitch with 2021 payrolls being run on time.
Have employees fill out new W4 forms.
Update housing allowance designations for all clergy. Housing allowances should be updated and affirmed each year.
Verify or adjust salary/hourly compensation levels.
Check state minimum wage changes and other state tax laws beginning on January 1, 2021.
State minimum wage changes can be found here.
Connecticut’s Paid Family Medical Leave deduction begins Jan 1, 2021.
The IRS has removed Non-Employee Compensation from the 1099 MISC form. Non-Employee Compensation must be included on the form 1099 – NEC. Wisdom is prepared to process these forms for your church. Contact us for more info!
Many COVID specific provisions end on Dec. 31, 2020.
If you have deferred withholding payroll taxes be prepared for those to begin again starting Jan 1, 2021as well as paying any taxes deferred that will be owed in early 2021.
December 31, 2020 is the last day to rehire employees for the good faith exemption for the PPP Loan and the last date that can be included for a PPP Loan Covered Period.
Prepare and approve your 2021 budget as soon as possible. Although there is much about the start of 2021 that is unknown, it is important to begin with some sort of plan. Consider using a quarterly budget that can be adjusted as the reality of 2021 becomes known.
We are all looking forward to a fresh start in 2021. Make the transition seamless by preparing well for the end of year! Contact Wisdom to learn how we can help your church start 2021 on the best foot!