Small organizations, businesses, and churches must manage their Payroll Software Singapore work just like any other entities. In recent times, these entities are experiencing major challenges with payroll management. Some of the firms and churches are exempted from paying taxes; however, some managers have taken this to mean that they are not supposed to pay any tax including the payroll taxes. Unless your organization has submitted an IRS Form 8274 that was subsequently approved, you are not exempted from wage taxes. Individuals acting for Churches and Organizations can be Held Responsible for Nonpayment of Taxes. Several aspects can help you with managing payroll.
Classification of Workers
Proper classification of workers will give you an easy time when dealing with taxes. Paying volunteers could classify them as employed, and thus you will be expected to pay tax for them. You should be able to classify other forms of employment, such as part-time and full-time employees.
Get Professional Help
Professionals will be of great assistance when helping manage your payroll. They will keep you updated on the changing labor laws and how to apply them to your payrolls. For a small organization, it might be unnecessary to employ full-time services of pay role management, however, consultation remains important.
Ministerial Tax Status
This is mainly applicable in churches that have employed some people under ministerial positions. Although they are church employees, the government classifies them under dual tax status meaning they are considered for the federal income tax as well as for the social and Medicare category under a self-employed basis. You are supposed to understand the government requirements for a person to be classified as clergy for the purposes of taxation.
IRS Forms W-4 and I9
These two aspects are vital because they are the first thing an auditor will request to see. Always make sure you keep copies of these forms. Ensure that you have a well-documented W-4 and an I9 form for every worker.
These forms are also important, and the editor is also likely to request them. Also, ensure that your W-2 is in agreement with your quarterly 941 Forms.
The general ledge and the W-2s forms must match. For example, if you issued your employee with a check of $60,000, but the W-2 shows $30,000 you must be able to explain the $30,000, why they were given, and whether they are taxable or not. The accountant should be advised to record every detail involving money.
Employee’s Reimbursement Payments
The worker’s reimbursement money should be taxed unless the recipient is qualified for tax exemption. A reimbursement policy should be included in W-2 to cover the recipient from taxation. If you lack a supporting policy, reimbursements will be considered as a payment. You also need to note that reimbursement must be made within 60 days of the issue.
Staff Gifts and Property Transfers
Gifts to individual employees should be recorded in the employees’ wage report. The transfer of properties is regarded as taxable income. Records of the current values of the properties should be considered and documented.