Churches and Ministers Should Be Aware of the Following Deadlines in May and June of 2011
Note: If a date listed below for filing a return or making a tax payment falls on a Saturday, Sunday, or legal holiday (either national or statewide in a state where the return is required to be filed), the return or tax payment is due on the following business day.
Payroll Tax Holiday! Under current law, employees pay a 6.2 percent Social Security tax on all wages earned up to $106,800 (in 2011) and self-employed individuals pay a 12.4 percent Social Security self-employment tax on all their self-employment income up to the same threshold. The Tax Relief and Jobs Creation Act of 2010 provides a payroll tax and self-employment tax "holiday" during 2011 of two percentage points. This means that employees will pay only 4.2 percent on wages and self-employed individuals will pay only 10.4 percent on self-employment income up to the threshold. This provision was passed to stimulate the economy by increasing the take-home pay of millions of workers. The IRS has issued new withholding tables (see Publication 15) that reflect this change, and churches should use the new tables. Employers and payroll companies will handle the withholding changes, so workers typically will not need to take any additional action, such as filling out a new W-4 withholding form.
Depositing Federal Taxes By Electronic Funds Transfer. Beginning January 1, 2011, you must use electronic funds transfers to make all federal payroll tax deposits. Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after December 31, 2010. Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make deposits on your behalf. Also, you may arrange for your financial institution to initiate a same-day tax wire payment on your behalf. EFTPS is a free service provided by the Department of Treasury. Services provided by your tax professional, financial institution, payroll service, or other third party may have a fee. For more information on making federal tax deposits, see "How to Deposit" in IRS Publication 15 (Circular E), Employer's Tax Guide. To get more information about EFTPS or to enroll in EFTPS, visit http:// eftps.gov or call 1-800-555-4477. Additional information about EFTPS is also available in IRS Publication 966, The Secure Way to Pay Your Federal Taxes.