I was just notified that our minister was supposed to be set up as W-2 for Federal and a 1099 for Social Security and Medicare. How do I change him to that status and then make the necessary adjustments to his taxable wage and tax.
I am fairly new to QB so step y step instructions would be good. We are using Desktop premier 2017.
Thanks for reaching out the Community, churchsecretary1.
You'll have to enter your minister as an employee and vendor in QuickBooks Desktop. Then, record the employee's paycheck by creating some payroll adjustments and write a check or bill for vendor's 1099 accounts.
To set the minister as an employee, please follow these steps:
I've attached some screenshots for reference.
Now, make a payroll liability adjustment to correct the employee's year-to-date. Know that all entered adjustments will show up on the Form W-2.
You can follow the detailed steps in this article to make an adjustment: Adjust payroll liabilities.
Then, let's also record him as a vendor:
The following articles will help you with creating checks and bills in QuickBooks:
I'm also linking some of our great resources that will walk you through in creating the 1099 and W-2 Forms:
Let me know if you have any follow-up questions. I'll do everything I can to answer them. Wishing you a good one.
Thanks so much for the information. I am finally making the changes. I want to ensure I understand correctly. The minister already has a file in QB and has been paid all year. Instead of changing the current file to SS/Med exempt I need to set up a new hire? What is the reasoning behind that?
Thanks again for your assistance
You won’t need to create a new profile, churchsecretary1.
You’ll only want to update the payroll information of the employee. Then, well run Payroll Checkup to correct the wage base and to get the discrepancy amounts. Once we get them, we’ll create liability adjustments to correct the taxes of the employee. This will be our road map, and we’ll do these step by step.
By the way, in your original post, you mentioned about 1099. It's only for sub-contractors (Vendors in QuickBooks). Please clarify if you want to make the employee a 1099 vendor, or just retain him as an employee, but with corrected payroll information. What we'll do now is for the employee's record.
First, open the employee’s profile and make the necessary changes in his payroll information.
Second, run the Payroll Checkup. This will go through all your payroll data and we’ll ask you to correct any lacking information, or correct the wages if it detects discrepancies.
Third, create a liability adjustment.
After this, you can go back to the Payroll Checkup window and continue checking the next quarter, and so on.
If there are other adjustments you need help with, feel free to go back to this thread. We’ll help you out.
I confirmed he should not receive a 1099 he will only receive a W-2 with no Soc/Med taxable wages or tax on it.
Thank you for confirming the filling status of your employee, @churchsecretary1.
Let's ensure to add the minister as your employee. Also, tagged the employee's profile as Tax Exempt.
To set the employee as tax exempt, here's how:
For additional information, you can read this article: Set up tax exempt employees.
Please let me know if you need anything else. Have a nice day!