The CPA Desk

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Category Archives: Tax and Accounting Desk

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Is Your Not-for-Profit Board Following These Governance Practices?

Jen:  This is the PKF Texas Entrepreneur’s Playbook.  I’m Jen Lemanski, this week’s guest host, and I’m back again with Nicole Riley, one of our Audit Senior Managers on our not-for-profit team; welcome back to the Playbook Nicole. Nicole:  Thanks, glad to be here. Jen:  Now I’ve heard you talk about Governance procedures; what does… Continue Reading

Term Limits on Your Nonprofit Board. Yes or No?

Term limits for not-for-profit board members can be a double-edged sword. They can allow you to easily let go of unsuccessful board members, but they also can cause you to lose the best sooner than you’d like. Consider some of the issues involved before making a decision. Review the pros Term limits allow you to… Continue Reading

Consider This Tax-Smart Medical Expenses Strategy

Various limits apply to most tax deductions, and one type of limit is a “floor,” which means expenses are deductible only if they exceed that floor (typically a specific percentage of your income). One example is the medical expenses deduction. Because it can be difficult to exceed the floor, a common strategy is to “bunch”… Continue Reading

What a Smart Endowment Spending Policy Can Do for Your Nonprofit

Income from endowment funds may be able to help your not-for-profit meet operating expenses, ease cash-flow problems and supplement next year’s annual budget. But you need to pay attention to several factors, including investment performance, inflation, operational changes and — the only factor you can truly control — your nonprofit’s spending policy. Know your restrictions… Continue Reading

Boost Your 401(k) Contribution Rate Before 2017 Ends

One important step to both reducing taxes and saving for retirement is to contribute to a tax-advantaged retirement plan. If your employer offers a 401(k) plan, contributing to that is likely your best first step. If you’re not already contributing the maximum allowed, consider increasing your contribution rate between now and year-end. Because of tax-deferred… Continue Reading

The Potential Tax Pitfalls of Donating Real Estate

Charitable giving allows you to help an organization you care about and, in most cases, enjoy a valuable income tax deduction. If you’re considering a large gift, a noncash donation such as appreciated real estate can provide additional benefits. For example, if you’ve held the property for more than one year, you generally will be… Continue Reading

Three Audit Issues to Understand When Preparing Your Nonprofit’s Financial Statements

Annual financial statements that have been audited by a professional auditor can help assure funders and lenders that your not-for-profit is financially sound. Here are three critical audit issues to understand when preparing financial statements: 1. The auditor’s role Auditors are responsible for expressing an opinion on financial statements. Beyond that, they’re responsible for obtaining… Continue Reading

How to Avoid Investment Fraud in Your Nonprofit

Investment fraud, such as Ponzi schemes, can cause significant financial losses for not-for-profits. But the harm it can cause an organization’s reputation with donors and the public may be even worse. Nonprofits are required to disclose on their Forms 990 whether they’ve experienced a significant loss to any illegal “diversion” that exceeds the lesser of… Continue Reading

Create a Nonprofit Executive Search Plan to Stay Prepared for Future Hiring

Selecting a new chief executive or other senior staffer is one of the most important decisions your not-for-profit board is likely to face. Even if there’s no immediate hiring need, it’s smart to prepare for the process. With an executive search plan, you’ll be ready to execute an efficient executive search when the time arrives. Form a… Continue Reading

Use a Reverse Audit to Save Sales and Use Tax

It’s a safe bet that state tax authorities will let you know if you haven’t paid enough sales and use taxes, but what are the odds that you’ll be notified if you’ve paid too much? The chances are slim — so slim that many businesses use reverse audits to find overpayments so they can seek… Continue Reading

Eight Disruptive Behaviors That May Be Holding Your Nonprofit Board Back

Your not-for-profit has probably spent a lot of time and effort attracting board members who have the knowledge, enthusiasm, and commitment to make a difference to your organization. Unfortunately, what begins as a good relationship can sour over time, and you may find yourself in the tough position of having to “fire” a board member…. Continue Reading

Affordable Care Act Tax Penalty Refresher

Now that Affordable Care Act (ACA) repeal and replacement efforts appear to have collapsed, at least for the time being, it’s a good time for a refresher on the tax penalty the ACA imposes on individuals who fail to have “minimum essential” health insurance coverage for any month of the year. This requirement is commonly… Continue Reading

The Complexities of Collaboration Between Nonprofit Organizations

More and more not-for-profits are joining forces to better serve their clients and cut costs. But such relationships can come with complicated financial reporting obligations. Starting with the simplest For accounting purposes, the simplest relationship between nonprofits may be a collaborative arrangement. These are typically contractual agreements in which two or more organizations are active… Continue Reading

Considerations When Buying or Selling a Business

Jen:  This is the PKF Texas Entrepreneur’s Playbook.  I’m Jen Lemanski, this week’s guest host, and I’m here with Chris Hatten and Martin Euson, two of our directors on our Transaction Advisory Services team, Martin is on the tax side, Chris is on the audit side; guys welcome to The Playbook. Both:  Thank you for… Continue Reading

Nonprofits: Harness the power of the personal appeal

You’ve probably heard it before: People don’t give to causes — they give to those asking on behalf of a cause. That’s why a personal appeal continues to be such a powerful not-for-profit fundraising tool. In fact, requests from friends or family members typically drive most charitable donations. By appealing to their networks, board members… Continue Reading

When does your nonprofit owe UBIT on investment income?

In recent years, the IRS has increased its scrutiny of not-for-profits’ unrelated business income (UBI). Dividends, interest, rents, annuities and other investment income generally are excluded when calculating unrelated business income tax (UBIT). However, there are two exceptions where such income is taxable. 1. Debt-financed property When your nonprofit incurs debt to acquire an income-producing… Continue Reading

Use Your Vacation Property to Benefit on Your Taxes

If you own a vacation property that you both rent out and use personally, it’s a good time to review the potential tax consequences: If you rent it out for less than 15 days: You don’t have to report the income. But expenses associated with the rental (such as advertising and cleaning) won’t be deductible…. Continue Reading