It’s no secret that this is a challenging time for charitable fundraising. In its annual Giving USA 2019 report, the Giving USA Foundation noted a decrease in individual and household giving, blaming such impersonal factors as tax law changes and a wobbly stock market.

a dark-haired woman wearing glasses sits with another dark-haired woman at a wooden table in front of a notepad and laptop computer, possibly discussion fundraising options

So why not fight back by making personal appeals to supporters? Requests from friends or family members have traditionally been significant donation drivers. Even in the age of social media “influencers,” prospective donors are more likely to contribute to the causes championed by people they actually know and trust.

Continue Reading How Personal Appeals Can Fight Fundraising Obstacles

As an employer, you must pay federal unemployment (FUTA) tax on amounts up to $7,000 paid to each employee as wages during the calendar year. The rate of tax imposed is 6% but can be reduced by a credit (described below).

a conference room with long vertical windows and 20 chairs with wheels sitting around a table; photo used in blog post about unemployment tax costs for businesses

Most employers end up paying an effective FUTA tax rate of 0.6%. An employer taxed at a 6% rate would pay FUTA tax of $420 for each employee who earned at least $7,000 per year, while an employer taxed at 0.6% pays $42.

Continue Reading Controlling the Unemployment Tax Costs of Your Business

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I am back again with Michael Veuleman, Audit Practice Leader and one of the faces of PKF Texas’ Employee Benefit Plan team. Michael, welcome back to the Playbook.

Michael: Thanks, Jen. It’s good to be back.

Jen: So, with 401(k) plans, also known as employee benefit plans, we hear a lot about the importance of using proper definitions for compensation within the 401(k) plan. Are there some pitfalls in this area that you’ve seen, because you’ve been in the space for quite a long time?

Michael: Jen, we hear a lot about definition of compensation for good reason. It’s very critical to the proper administration of a 401(k) plan. The definition of compensation is located in the plan document, and many times it’s very simple and straightforward but there are times where it’s very complex.

If your plan is being audited, your auditor should be reviewing for proper application of eligible compensation. If your plan is not being audited, at least on an annual basis, you should be reviewing your definition of compensation and comparing that to what is actually happening in your payroll system.

If new systems are implemented or there’s a change in provider, the administrator should carefully review that all of these components are applied properly. If, for instance, new bonus plans, fringe benefits or per diems are added to the system, you should really be careful that those are applied properly, because if you don’t apply them properly, then your definition of compensation is not correct.

Jen: And that seems like a pretty big deal. I think everybody wants their comp to be correct.

Michael: Absolutely.

Jen: All right, we’ll get you back to talk a little bit more about some more employee benefit plan topics, sounds good?

Michael: Sounds good.

Jen: All right thank you. For more information about this topic, visit www.PKFTexas.com/BenefitPlanAudits. This has been another Thought Leader production brought to you by PKF Texas – the Entrepreneurs Playbook. Tune in next week for another chapter.

The day began bright and early on Friday, September 27, 2019, with a breakfast panel at the Royal Sonesta, “What’s Next for Your Business: Transition Planning,” sponsored by PKF Texas and hosted by the Houston Business Journal (HBJ).

six American gentlemen standing in a line in front of tall posters for the Houston Business Journal and PKF Texas' transition planning panel breakfast event

The HBJ’s Market President and Publisher, Bob Charlet, moderated the panel, which included:

Because not every business sale is the same and has different working components, the panelists shared their knowledge and insights via anecdotes and personal accounts of trials and tribulations from past deals.

Continue Reading Recap: Transition Planning Panel with the Houston Business Journal

One of the worst things that can happen to a not-for-profit organization is to have its tax-exempt status revoked. Among other consequences, the not-for-profit may lose credibility with supporters and the public, and donors will no longer be able to make tax-exempt contributions.

man in a business suit putting a silver coin into a pink porcelain piggy bank, next to stacks of coins, avoiding excess benefit transactions to keep tax-exempt status

Although loss of exempt status isn’t common, certain activities can increase your risk significantly. These include ignoring the IRS’s private benefit and private inurement provisions. Here’s what you need to know to avoid reaping an excess benefit from your organization’s transactions.

Continue Reading Your Not-for-Profit’s Tax-Exempt Status – How to Keep It

As we head toward the gift-giving season, you may be considering giving gifts of cash or securities to your loved ones. Taxpayers can transfer substantial amounts free of gift taxes to their children and others each year through the use of the annual federal gift tax exclusion. The amount is adjusted for inflation annually. For 2019, the exclusion is $15,000.

long shiny red ribbon tied tied on top of white wrapping paper with red and green holiday season messages, symbolizing gift tax rules

The exclusion covers gifts that you make to each person each year. Therefore, if you have three children, you can transfer a total of $45,000 to them this year (and next year) free of federal gift taxes. If the only gifts made during the year are excluded in this way, there’s no need to file a federal gift tax return. If annual gifts exceed $15,000, the exclusion covers the first $15,000 and only the excess is taxable. Further, even taxable gifts may result in no gift tax liability thanks to the unified credit (discussed below).

Note: this discussion isn’t relevant to gifts made from one spouse to the other spouse, because these gifts are gift tax-free under separate marital deduction rules.

Continue Reading Here are the Gift Tax Exclusion Rules…

professional headshot of Danielle Supkis Cheek, a brunette woman wearing glasses with her hair pulled back smiling at the cameraWe have more exciting news! One of our Directors, Danielle Supkis Cheek, CPA, CFE, CVA, has been named a “40 Under 40” by CPA Practice Advisor. This is her sixth time receiving recognition for this award.

The 40 Under 40 Awards spotlight top practicing public accountants, educators and thought leaders, who are leading their profession by visibly and incrementally changing the accounting through exemplary leadership, innovative thinking, collaborative efforts to provide unity across generations and community outreach, which extends visibility of the profession outside the workplace.

This is the most recent of several honors Danielle has received this year, including:

Danielle is a Director in PKF Texas’ Entrepreneurial Advisory Services team and is the face of the fraud and forensics team. She is passionate and enthusiastic about her work, which will continue her drive for innovation in our firm, as well as the accounting industry. Currently she is the chair of the AICPA PCPS Technical Issues Committee (TIC).

To learn more about Danielle Supkis Cheek, visit www.PKFTexas.com.

As trusted business advisors, we enjoy working with you to co-create ideas and co-develop innovative solutions for your business. To supplement this, we also want to provide valuable information, including upcoming Houston events that we support, and think may be of interest to you.

  • Houston Business Journal
  • Greater Houston Partnership
  • Turnaround Management Association – Breakfast Meeting
  • Comerica Bank
  • YWCA Houston
  • Turnaround Management Association Network of Women – Lunch Panel
  • Turnaround Management Association and Secured Finance Network – Social Event
If you have questions about any event details or registration information, the organization-specific contacts are below. We hope to see you at any or all of these Houston events!

Continue Reading Mark Your Calendars! Upcoming October 2019 Houston Events…

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m here with Michael Veuleman, Audit Practice Leader and one of the faces of PKF Texas’ Employee Benefit Plan team. Michael, welcome back to the Playbook.

Michael: Thanks, Jen. It’s good to be here.

Jen: So, Michael, with cyber security being in the forefront of companies’ minds, do they have an obligation to safeguard their employees’ data, including 401(k) plans?

Michael: So, Jen, the short answer is yes. Plan sponsors and plan administrators have a fiduciary responsibility to protect the plan information and make sure that it’s secure. In the U. S., retirement assets are approaching $30 trillion, and of that, about eight trillion is defined contribution plans and these assets are increasingly becoming targets of foreign hackers.

Jen: So, what are some ways that companies can be exposed?

Michael: Well, Jen, the fact is most companies are just not fully prepared to sustain a sophisticated cyberattack. Plan sponsors and administrators contract with third-party administrators—we call TPAs. These TPAs allow access to many different people involved in the process. Some obvious examples of this are your HR department, your payroll clerks and even your corporate and plan auditors.

Jen: Interesting. So, are there ways that they can help limit their exposure for the employee data?

Michael: Even in the audit process auditors are given access to online data, mainly it’s to streamline the process. What we suggest that plan sponsors and ministers do is have their employees, their third-party administrators, and their auditors change their passwords on a routine basis and also implement a dual authentication program. Also, they should ensure that the auditors do not retain the social security numbers of the plan participants in their files and in any files that they don’t retain in the audit file should be deleted. And then lastly, they should have their TPA set some time period restrictions on access.

Jen: Well, good. We’ll get you here to talk a little bit more about some employee benefit plan topics at another time. Does that sound good?

Michael: Sounds great.

Jen: All right. For more information about this topic, visit www.PKFTexas.com/BenefitPlanAudits. This has been another Thought Leader Production brought to you by PKF Texas the Entrepreneurs Playbook. Tune in next week for another chapter.

Who would defraud a kids’ organization? The answer, unfortunately, is that trusted adults sometimes steal from not-for-profits benefiting children. Youth sports leagues and teams, for example, are ripe for fraud. Cash transactions are common, and coaches and board members usually are volunteers with little accountability.

photo taken behind the goalie net, a young boy in black shirt and red shorts about to kick a soccer ball at the young girl goalie, caution to protect youth sports league from fraud

If you or your children are involved in a youth sports league, here’s what you can do to ensure that its funds support the kids, not thieves.

Continue Reading How to Protect Youth Sports Leagues from Fraud