Payroll

We use Aplos (accounting) and Gusto (payroll) to track our finances and pay our employees and contractors, as well as track payroll taxes.

• Aplos is connected to Gusto via a formal integration.

• The big advantage to Aplos is it allows us to do "fund accounting" AKA it makes it simple to split up our revenue and expenses based on different funds we may have as a nonprofit.

• Aplos and Gusto are user friendly, pretty intuitive, and come with excellent customer service.

• Gusto provides tons of great features, including:

  • • Automatically filing and paying federal, state, and local payroll taxes on our behalf

    • Benefits administration - we can broker benefits for our employees straight on Gusto with automatic deductions from our accounts and employees' paychecks. Types of benefits they offer:

      • • Health insurance (health, dental, vision, etc.)

        • Health savings accounts

        • Retirement (401K + Simple IRA)

        • Commuter - company car, etc.

        • Life Insurance

        • Other

          • • Charity matching

            • Cell Phone

            • Gym + Fitness

Note: We used Quickbooks Simple Start + Payroll until 11/1/21. We much prefer Gusto, although more expensive, due to its intuitive platform, excellent customer service, and the fact it tracks and auto files/pays ALL payroll taxes, unlike QuickBooks.

We run payroll automatically via Gusto, so generally, you won't need to manually run payroll. However, there are some reasons you may want to check in on it or make adjustments.

• Changes must be made by 7pm on the Tuesday before pay day (Friday)

• Types of changes needed:

  • • The main change that may need to be made is adding reimbursement. If an employee pays for something they need reimbursed for, that goes on their paycheck.

• To make changes:

  • • Log into Gusto

    • Payroll tab on left side

    • "Run Payroll"

Non-Profits and Intern Stipends

When a non-profit organization or school hires an intern, the tax rules are normally the same as for for-profit companies. However, non-profits can offer you a student internship and compensate you with a stipend. You must agree to work as a volunteer. The stipend is considered a nominal payment and may not exceed 20 percent of what an employee would make doing the same job. The organization must report the stipend to the Internal Revenue Service when it is more than $600 in one year. If you receive a stipend, you will get a Financial Statement in lieu of a W-2. Non-US residents get a 1042S form instead. Reporting any taxable portion of a stipend on your tax return is your responsibility.

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Read More: What Can You Gain From an Internship?

Unpaid Internships

Both for-profit and non-profit organizations can offer unpaid student internships. If the intern isn’t paid, there are no tax issues. However, since 2018, courts have used a "primary beneficiary test" to determine which party, the employer or the intern, is primarily benefiting from the relationship. The U.S. Department of Labor, Wage and Hour Division has identified these seven factors as part of the test:

• "The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee – and vice versa."

• "The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions."

• "The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit."

• "The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar."

• "The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning."

• "The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern."

• "The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship."

What Student Interns Should Know

When you are paid wages, the earnings are taxable income just like wages for any other job and must be reported when you file your tax return. You can deduct job-related expenses as other employees do. A stipend may be exempt from taxes if certain conditions are met. The stipend may not be payment for services performed. For example, the stipend might be paid to enable you to complete school-related research while any work you do is unpaid.

The stipend money usually needs to be paid directly to your school and used to pay tuition and fees or other expenses required as a condition for enrollment, such as books, supplies or equipment. Any part of the stipend not used for such expenses is income that you have to report on your tax return and is taxed as wages.

Student Intern Volunteer Tax Deductions

When you work as a student intern and you are classified as a nonprofit volunteer instead of an employee, you can't deduct job related-expenses or any of the time you put in. However, you may be able to take a deduction for travel expenses if they are incurred while you are performing a service for the organization. If you spend your own money to get your work done, such as paying for stamps or copier fees, you can write the cost off your taxes if the organization does not reimburse you.

Read More: 5 Useful Apps for Paying Off Student Loans

https://pocketsense.com/tax-rules-for-student-interns-13660982.html