Fall is in the air, colors are changing, and pumpkin spice is the flavor of the day. Following not too far behind is everyone’s favorite time of year: tax season. This can be a challenging time for churches, particularly when understanding the ins and outs of ministerial/clergy staff tax codes. Church staff often grapple with the tedious task of ensuring that their payroll data is accurate and recorded correctly on the appropriate tax forms. However, amidst these difficulties, there are changes on the horizon that will help streamline the process and ease some of the anxiety. These changes involve the e-filing requirements for W2s and 1099s.
First, let’s take a look at what’s different for this upcoming tax season. These changes come directly from the federal government, or more specifically, the Internal Revenue Service (IRS). The goal here is to simplify and modernize the tax filing process. Previously, if an employer had at least 250 of any one tax form (i.e., 250 W2s, OR 250 1099s), that employer was required to file electronically. As of this year, the IRS has significantly lowered that threshold to a combined total of 10 or more forms. This means that when tax season rolls around, you’ll need to count both the number of W2s and 1099s together. Should that amount total at least 10, you’ll need to file all of your tax forms electronically.
If you’ve never e-filed before, don’t worry, there’s nothing to be apprehensive about. Electronic filing offers numerous advantages over traditional paper filing. For one, there’s no need for printing, mailing, or manually filling out forms. The entire process can be completed electronically, saving time and effort. Second, e-filing is generally more secure than paper filing, reducing the risk of sensitive information falling into the wrong hands or simply getting lost in the mail. And lastly, since e-filed tax forms are processed more quickly, there is a faster turnaround time. That’s less time nervously waiting to know if your forms are correct.
You may be wondering, is PowerChurch capable of handling e-filing tax forms for the upcoming year? And the answer is yes! It is important to note, however, that only versions 12, and 14, and PowerChurch Online offer integrated e-filing capabilities within the program itself. If you’re using an older version, you will need to purchase an upgrade. By upgrading to the latest version, you can take advantage of the time-saving benefits and improved efficiency of e-filing, as well as many other new features. If you stay with an older version of PowerChurch, you can still use an external tax preparation service to aid in the filing of your tax forms.
To electronically file tax forms from within PowerChurch itself, just process the W2s and 1099s as usual. When you get to the final screen, you’ll see a nice little button in the center that’s labeled ‘File Electronically.’ Clicking on this will open up a web page that acts as a portal between PowerChurch and Nelco, a third-party company that does the filing. Nelco does require you to register an account on their website, which is quick and simple to set up. Once logged in, tax forms from PowerChurch can then be imported to Nelco, which will do the rest. Keep in mind that Nelco does charge to e-file tax forms, and there is an easy-to-navigate price table on their site.
Understanding and navigating the tax filing process can sometimes be daunting and overwhelming. That’s why the friendly staff at PowerChurch Software is here to help. If you have questions or need assistance with e-filing or any other tax-related issues, don’t hesitate to contact our dedicated support team. You can contact us at 800.486.1800 or send an email to support@powerchurch.com. We are available Monday through Friday, 9 a.m. to 6 p.m. Eastern time. Additionally, we encourage you to explore our forums at powerchurch.com, where you can find valuable resources, engage with our community, and gain insights from others who may have faced similar challenges.
Remember, tax season doesn’t have to be a dreaded time for church staff. With the changes in e-filing requirements for both W2s and 1099s comes the opportunity to streamline the tax filing process and ensure compliance with the IRS. By utilizing PowerChurch Plus’s e-filing capabilities in versions 12, 14, and PowerChurch Online you can simplify the process, save time, and reduce the risk of errors associated with paper filing. Don't hesitate to reach out to our support team or explore our forums for additional information and assistance. With the right tools and support, you can navigate tax season confidently and focus on what matters most – serving your congregation.