Tax tips/best practices for Employers if you hired interns this summer
Have you hired summer interns to assist you in your business? You may have many questions around tax compliances. The following are few quick tax tips that may help you :
- Choosing the right classification: In most scenarios, an intern should be classified as an employee. Classifying them incorrectly as a contractor may trigger tax audits.
- Tax withholding: For students, even if the internship amount is a smaller amount you may be required to withhold Social security and Medicare taxes.
- Tips are taxable: If your interns earned any tips, you are required to report them.
- Expense reimbursements: The process would be the same similar as employees. However, if they were paid separately and not reimbursed as part of expense reimbursement – you may be required to report this as part of their reportable income.
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