Nonprofit Management All-in-One For Dummies

Chapter 7

Accounting for Payroll and Payroll Taxes

IN THIS CHAPTER

Creating payroll accounts for employees

Calculating federal, state, and local taxes

Paying quarterly payroll taxes

Submitting IRS payroll requirements

Reporting info about contract employees

You’re the executive director or manager at a small- to medium-sized nonprofit, so you may assume that because of your organization’s nonprofit status, you don’t have to pay any taxes. After all, your status does mean your organization generally owes no corporate income taxes. However, you’re still responsible for paying federal payroll taxes for your employees.

The good news is that you can account for payroll and payroll taxes for nonprofit employees similarly to how for-profit organizations do so. As an employer, you’re required to withhold and/or pay state and federal payroll taxes on behalf of your employees.

You can easily set up your organization’s payroll accounting yourself. Or if you prefer, you can hire part-time help ...