Ready, Set, Go – File W2 Forms Easily with Our Handy Tips

By | Year-End | No Comments

We’re rapidly coming to the end of the calendar year. As the festivities celebrating the holidays and the New Year are underway, it’s not too soon to start thinking about W2 requirements for nonprofits.

Nonprofits are subject to the same regulations concerning employee taxes and social security taxes as for-profits, with a few exceptions. Clergy may opt out of social security, for example, and thus, religious institutions may choose to exempt their clergy from paying into social security.

Employees sometimes erroneously believe that working for a tax-exempt organization makes them tax-free too. It does not. It is incumbent upon your organization to issue W2s in a timely fashion and to assist employees with any background paperwork they need to report income and taxes accurately.

W2 Preparation

Preparing W2 forms doesn’t have to be a laborious process. Take time now to run through this simple checklist of what you need to prepare W2 forms for your employees and gather together all the paperwork and info you need so that you have it on hand.

  1. W4 Forms: You are required by law to have a W4 form on file for every employee of your company. Each employee should complete the W4 form upon being hired by your nonprofit. It includes their legal name, federal income tax withholding, marital status, number of dependents, and any additional information to assist with withholding accuracy. Employees can update their W4 forms at any time and should review them annually to make sure that no information has changed. They may also update their additional withholding at any time.
  2. Legal identification information: Ask employees to verify all of their legal information including their name, social security number, and mailing address. You’d be surprised at how many people forget to alert the HR department when they move or change names.
  3. Organization information: Confirm the organization’s information for W2 forms as well. You will need the legal entity name, address, contact name, email address, state and federal ID numbers.
  4. Annual payroll reports: Even if your nonprofit operates on a different fiscal year, the W2 is always calculated on the calendar year. Run your reports now. These should include Payroll Summary Report, Employer Summary Report, Master Adjustments Report for Deductions, Contributions and Other Income, and quarterly 941s.
  5. Generate W2 forms: You can use an automated system to generate W2 forms or use the IRS W2 form to prepare each employees’ forms.
  6. Print the W3: The W3 remains in your offices and provides a copy of all of the data submitted.
  7. File W2: The W2 forms must be filed with the appropriate government agencies by January 31.

Do Small Nonprofits File W2 and W3 Forms?

All nonprofits, regardless of the number of employees, must file W2 and W3 forms. You may think it’s silly to file these forms if it’s only yourself and a handful of others who work at your nonprofit. But you and others will need W2 forms to complete your income tax forms and to adhere to all government regulations.

All of the forms that you need to complete, along with detailed instructions, may be found on the IRS website. It’s easy to complete W2s, just tedious to collect and confirm the data needed. Start now to ensure that you’re all set in January to get those form files.

Welter Consulting

Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.

Fiscal Year-End for Nonprofits

By | Accounting, Accounting Software, Budget, CPA, Fiscal, MIP Fund Accounting, Nonprofit, Year-End | No Comments

For many nonprofit organizations June represents the last month of their nonprofits fiscal year, and the start of closing of the grants. As soon as fiscal and executive staff return to the office in July 2018, there will be plenty of work to do to close the books.

Oftentimes nonprofit organizations that operate around a program schedule find that closing their fiscal year at the end of June simply works better. For example, after colleges and other higher education organizations have celebrated graduations they enter a slower time making it an optimal season to close out their books.

Healthcare and human services receiving substantial funding from grants are preparing for end of July reporting requirements, making it an ideal time to get in line with parallel grant cycles. Others prefer to avoid the double whammy of having fiscal closing and tax season that start in January. Whatever their reason, July marks a new financial year of opportunity ahead.

What will your fiscal 2017 results look like, and how will you distribute them? If you close your books at the end of June your IRS tax Form 990 will be due on November 15. Audits will also start to get scheduled which include financial statement scrutiny, especially for organizations covered under OMB’s A-133 single audit act.

Some questions you and your team can be asking include:

  • Where will your organization be presenting your results?
  • Will you go beyond a normal board meeting update and provide results to your top funding stakeholders?
  • Do you also publish results to your website and/or an annual report?

Keep in mind the future funders of your organization likely expect more transparency than the ones to whom you’re delivering results today.  Getting audit ready for year-end is probably at the top of your to-do list and making sure you have all your tools in place is important.

Another way to effectively navigate this end of year season with success is to put a budget plan in place. This plan should be adaptable. If you have just started a new FY 2018 budget, think about your checkpoints and where you can adjust the plan. If you’re on the cusp of starting budget planning, though, please consider how you can build a better budget. We are offering a guide to building a nonprofit budget roadmap that can help you wherever you happen to be in your own organization’s journey.


Welter Consulting

Welter Consulting is a technology firm empowering nonprofit and government organizations with effective software, consulting & training that can help you with your accounting needs. We are committed to finding the most affordable technology, the most powerful solution, and providing expert support. By leveraging technology and superior reporting, our team helps to free more of your time to devote to the important work of your mission. We bridge people and technology together for effective solutions for nonprofit organizations. We are passionate professionals who choose to work in the nonprofit sector for the same reason you do – helping others. Please contact Welter Consulting online at 206-605-3113 for more information.