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Investigate small nonprofit payroll options #308

Closed seekanddefine closed 2 years ago

seekanddefine commented 2 years ago

Investigate options. Find a few good options and list some description and coat comparisons. One to start with is quick books since that as been used by one contributor.

Time: 1 hr

Potential tasks identified after researching the issue taken from below:

Questions "from comment by @seekanddefine below":

seekanddefine commented 2 years ago

Chat message: https://github.com/knowledge-for-good/knowledgeforgood/issues/308 A new issue for the payroll research I listed it as an hour of research for time and assigned it to me. Let me know what you think. Is this a good chunk? I put a few labels on it and am hoping to do it this morning. Hope you both have wonderful days! I am looking forward to completing this task today but could use help with the tasks that come next. I put it under the milestone org setup but im not sure if it should also get nestled in a new project.

avidrucker commented 2 years ago

Is this a good chunk? [...] I put it under the milestone org setup

@seekanddefine LGTM (Looks good to me) 👍🙂

As a rule of thumb, when in doubt, I think it's OK to leave it out (labels, milestones, etc. - though I very much like what you chose). Asking questions (as you are doing here) is awesome!!!

Please let me know when you know how I can help with the tasks that come next 🙇

im not sure if it should also get nestled in a new project

I'm also not sure - I figure we can make the decision whether or not to label this a project later, as we feel it is helpful to do so 🙂

seekanddefine commented 2 years ago

2021 02 09 9:00-10:00 am

Intro 

Thought: As I'm diving in I'm realizing that there may be multiple tasks here. First of all we haven't incorporated so for taxes for 2022 we are unincorporated and not a nonprofit. That will change how payroll is accounted for in 2022. We may want that to be a separate issue then we can figure out incorporation which is a second issue, lastly taxes and payroll after incorporation which is a third issue. Meanwhile we want a better more joyful way to ensure payroll is happening now, while we figure all this out, which seems to be a third issue.

Potential New Issues from breaking up the task

Issues moved to original issue note above by seekanddefine

Body

Accounting/Payroll

All orgs must must pay and withhold FICA taxes.

501(c)(3)s are exempt from federal unemployment taxes (FUTA) and can pay SUTA in advance or after claims are filed, but not all nonprofits are tax-exempt (must decide what kind of nonprofit). 

Options: Do it yourself or use a program.

Do it yourself:

Excel sheets

Use a program

Programs should ensure all local, state, and federal taxes are calculated, filed, and paid

Question: What are pay runs? (Some programs offer unlimited pay runs)

Type of Business

Business owner structures:

  1. Sole proprietorship
  2. Partnership
  3. Corporation
  4. S-corporation
  5. B-corporation
  6. Limited liability company (LLC)

Partner structures:

Note: partners aren’t considered employees, so they shouldn’t be issued a W-2 form. 

Payments to self are not salary but profit. You have to pay income taxes, Social Security, and/or Medicare when you file personal tax returns. Once the business is profitable then you will pay quarterly estimated taxes. The first year of business, you may not have to pay anything until you file your annual return.

Corporations:

Tend to have more fees. Complex tax and legal requirements. Can take special deductions. Double tax of corporation earnings and shareholder dividends. Cannot deduct losses if C corp, but can if S corp. B corps are for public benefit may require additional paperwork yearly to prove contribution to public good. Example is patagonia and kickstarter. (May be the right option if we decide not to incorporate as a nonprofit but to act like a nonprofit. 

LLC:

Can have multiple owners. Members/owners report profits and loses on personal tax returns like owners of a partnership. Not recognized as a business for taxation purposes. Must file as a corp, partnership, or sole proprietorship on tax returns. 

Questions: Edit: See top of this page in the body of this issue for questions requiring attention. ~ Avi

Resources 

https://fitsmallbusiness.com/payroll-for-nonprofits/

https://www.zenbusiness.com/blog/self-employed-pay-yourself/

https://www.peoplekeep.com/blog/the-six-small-business-structures

Misc

Frustrations:

I accidentally click my roller mouse when I am typing sometimes because I use my wrist rests on my roller mouse. This causes me to lose time. I also backspace somewhat frequently because these switches are so sensitive to touch. I would like to try:

seekanddefine commented 2 years ago

Ok, so I did an hour of work and put all my notes in the issue. After researching for an hour I am realizing that I didn't list any specific programs for accounting. Doh. A lot of other questions came up in my brain that were related. Now I'm wondering what to do.

Do I try again for an hour on this issue or do I make separate issues for each of the things I delineated are future tasks to do and then assign each of those tasks time which I then work in?

seekanddefine commented 2 years ago

Hello friends, Avi and I met for a jam today and talked all about issues while helping me navigate a block. Lots of wonderful connecting and fruitful dialogue. I created a bunch of new issues to help us proceed to finding a more joyful way of doing payroll and figure out our taxes. Hope your days are going well.

seekanddefine commented 2 years ago

I'm closing this now because all identified tasks have become new issues. Woo hoo! Progress!