Yesterday I attended a meeting which featured the business manager from Papillion-Lavista Schools talking about their IRS audit. They were one of the first schools in Nebraska ti undergo a thorough audit and she gave some recommendations for other schools in Nebraska.
1. If schools provide cell phones for their administrators, the administrator must highlight personal calls on their bill and pay for those calls. Papillion chose to pay the administrator's a stipend and run the stipend through payroll so that income tax is paid on all monthly charges.
2. If schools provide a uniform allowance to certain employee's, like custodians, any part of the uniform that could be worn as everyday wear is considered wage to the employee and is taxable income.
3. All wages for employees must be processed through payroll. If an employee works as a teacher during the day and a volleyball line judge at night, the volleyball wages must be run through regular payroll, not as a separate check.
4. Currently enrolled students working for the school during the school year are not considered an employee of the district. If they work during the summer, they are considered a school employee.
5. If schools pay tuition for employees to take additional classes, that is considered taxable income unless the payment is made directly to the University.
6. A form W-9 must be obtained from all active vendors the school does business with. A form 1099 must be completed if payments to the vendor exceed $600 and the vendor is not a corporation.
If Bancroft-Rosalie School were to be audited by the IRS, there would be a $100 fine for each 1099 that was not sent. Area businesses that receive a 1099 from us should complete the form and return it to the school in a timely fashion, even if you don't feel you need to. otherwise, Gina Pagels will have to keep bugging you until we get it.
