Non behalf Payroll

Non Profit - Non behalf Payroll

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Non profit Organizations have some unique situations when addressing payroll and payroll taxes for their employees. Here we are addressing here many of the common payroll situations for Non profit Payrolls.

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Non Profit

Non profit Payroll: laborer Records

There are many state and federal laws and regulations with regard to laborer records that can be confusing and some times contradictory. What laborer records should you keep to be safe? The following items if you de facto have them (and you should) need to be kept in employee's personnel files. We propose for audit and Irs purposes that you keep them for at least seven full years.

Employee job application Reference and background checks Offer of employment Job description Irs Form W4 State W4 equivalent Hls Form I9 Employee benefit enrollment or declining forms Annual doing evaluations Interim evaluations or disciplinary forms Exit Interview

Additional inherent forms to keep

Non profit Payroll: Payroll Pay Records

Non profit Payroll: Employees

Officers and Directors

The Internal revenue Code defines the officers of a corporation--president, vice president, secretary, and treasurer--as employees, and your 501(c)(3) must classify them as such for tax purposes. This applies if your assosication pays these officers to achieve their duties as officers.

A 501(c)(3) should not classify a corporate officer as an laborer if he or she performs no services, or performs only minor services and neither receives nor is entitled to compensation.

By contrast, the Code defines the directors of a corporation--that is, members of the governing board--as nonemployees, and your 501(c)(3) must classify them as such for tax purposes. This applies if your assosication pays its board members to attend board meetings or otherwise compensates them for performing their duties as directors.

Volunteers

From time to time, some 501(c)(3)s may contribute volunteers with awards, or gifts. In general, if these are non-cash items of nominal value, such as a ham nearby the holidays, your assosication should not count these items as assessable wages.

If your 501(c)(3) gives volunteers cash items, such as gift certificates or any other assessable fringe benefit, it must contain these items in the volunteers assessable wages.

Employees

If a man is not an officer, director or volunteer and you compensate them for work done and they are not an independent contractor, they are an employee. Like other employers, 501(c)(3)s that pay wages to employees must pay Federal Employment taxes on those wages. These taxes include:

Federal revenue tax Fica taxes (Social safety and Medicare)

Non profit Payroll: Federal revenue Tax Withholding

Your 501(c)(3) commonly (except Statutory Employees) must preserve and pay Federal revenue tax from its employees' wages.

To outline out how much Federal revenue tax to withhold, employers should ask employees to unblemished Irs Form W-4, laborer Withholding allowance Certificate. Ask each new laborer to unblemished and sign a W-4 by his or her first day of work. Keep the form on file, and send a copy to the Irs if the Irs directs you to do so in a written notice.

If a new laborer fails to contribute a completed Form W-4, your 501(c)(3) should assume particular status with no withholding allowances.

Non profit Payroll: Fica Taxes

Fica taxes go toward communal safety and Medicare. Your 501(c)(3) must preserve and pay these taxes from employees' wages, with one exception: If your assosication pays an laborer less than 0 in any calendar year, it need not preserve Fica taxes for that employee. A 501(c)(3) must pay both the number of Fica tax withheld from employees' wages and the organization's match of that amount.

Non profit Payroll: Federal Unemployment Taxes

The following is a direct quote from the Irs 940 instructions ready at the following link:
http://www.irs.gov/instructions/i940/ch01.html#d0e251

"Religious, educational, scientific, charitable, and other organizations described in section 501(c)(3) and exempt from tax under section 501(a) are not field to Futa tax and do not have to file Form 940. "

What it comes down to is that if you are a 501(c) (3) and you have received your suitable determination letter from the Irs you don't have to pay Federal Unemployment taxes.

Non profit Payroll: State Unemployment Taxes

States vary on unemployment taxes on non profits and you should check with your State Unemployment assurance group for the rules in the States you have employees.

Non profit Payroll: Paying Federal revenue and Fica Taxes

Your 501(c)(3) must pay withheld revenue taxes, together with both the boss and laborer portions of Fica taxes (minus any progress earned revenue reputation [Eic] payments). These payments must be paid electronically using the Electronic Federal Tax cost ideas (Eftps) or by mailing or delivering a check, money order, or cash to an authorized depositary. Note that some taxpayers are required to exclusivly deposit using Eftps. Check with a excellent non profit payroll tax professional for added information.

Non profit Payroll: Reporting Payroll Taxes

Once your 501(c)(3) deposits the Federal revenue and Fica taxes, it must submit returns reporting that it has withheld and paid them. Just as the 501(c)(3) pays Federal revenue and Fica taxes together, it must narrative them together on Irs Form 941Employers regular Federal Tax Return. They must also be reported annually on Irs Form W2 a copy of which is also distributed to your employees

Non profit Payroll: Conclusion

There are many similarities between Non profit Payroll and For profit Payrolls but some differences not all of which have been discussed here. We all the time propose that you use a excellent payroll outsourcing business with Cpa's on staff. That way your questions can be answered professionally and any problems solved by a Cpa who is eminently excellent by training and experience to work with the Irs on payroll tax problems.

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