Tax and Accounting Desk

How well do you listen to your not-for-profit’s supporters on social media? If you don’t engage in “social listening,” your efforts may not be good enough.

This marketing communications strategy is popular with for-profit companies, but can just as easily help not-for-profits attract and retain donors, volunteers and members.


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In the past few months, many businesses and employers nationwide have received “no-match” letters from the Social Security Administration (SSA). The purpose of these letters is to alert employers if there’s a discrepancy between the agency’s files and data reported on W-2 forms, which are given to employees and filed with the IRS. Specifically, they point out that an employee’s name and Social Security number (SSN) don’t match the government’s records.

According to the SSA, the purpose of the letters is to “advise employers that corrections are needed in order for us to properly post” employees’ earnings to the correct records. If a person’s earnings are missing, the worker may not qualify for all of the Social Security benefits he or she is entitled to, or the benefit received may be incorrect. The no-match letters began going out in the spring of 2019.


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Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m here again with Nicole Riley, an Audit Senior Manager and one of the faces of the PKF Texas Not-for-Profit team. Nicole, welcome back to The Playbook.

Nicole: Thanks. Thanks for having me.

Jen: So, we’re touching on topics important to not-for-profits. Accounting departments and development departments are two really critical components of a not-for-profit organization. How do you facilitate cooperation between the two departments?

Nicole: As you mentioned, they really are critical components of an organization, and when they work together well it can really benefit an organization.


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Have staffers complained because their expense reimbursements are taxed? An accountable plan can address the issue. Here’s how accountable plans work and how they benefit employers and employees.

A photo of a folder, a journal and a stack of paper to make not-for-profit employees aware of reimbursement plans.

Be Reasonable
Under an accountable plan, reimbursement payments to employees will be free from federal income and employment taxes and aren’t subject to withholding from workers’ paychecks. Additionally, your organization benefits because the reimbursements aren’t subject to the employer’s portion of federal employment taxes.

The IRS stipulates that all expenses covered in an accountable plan have a business connection and be “reasonable.” Additionally, employers can’t reimburse employees more than what they paid for any business expense. And employees must account to you for their expenses and, if an expense allowance was provided, return any excess allowance within a reasonable time period.


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If you’re lucky enough to be winning at gambling or the lottery, congratulations! After you celebrate, be ready to deal with the tax consequences of your good fortune.

A photo of two slot machines to show the tax implications of winning the lottery or by gambling.

Winning at Gambling
Whether you win at the casino, a bingo hall, or elsewhere, you must report 100% of your winnings as taxable income. They’re reported on the “Other income” line on Schedule 1 of your 1040 tax return. To measure your winnings on a particular wager, use the net gain. For example, if a $30 bet at the race track turns into a $110 win, you’ve won $80, not $110.

You must separately keep track of losses. They’re deductible, but only as itemized deductions. Therefore, if you don’t itemize and take the standard deduction, you can’t deduct gambling losses. In addition, gambling losses are only deductible up to the amount of gambling winnings. So you can use losses to “wipe out” gambling income but you can’t show a gambling tax loss.


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Is your not-for-profit making the most of its email list? If you send every item to individual donors, corporate supporters, volunteers and the media — regardless of their interests or investment in your organization — you probably aren’t. Email segmentation can help you communicate with everyone more efficiently and effectively.

A man is checking his computer to optimize how he sends emails for his not-for-profit.

Keep Them Tuned In
There are many reasons to think about sending particular emails to only specific slices of your email list. For starters, too many irrelevant emails from your not-for-profit will cause some recipients to tune out or unsubscribe.

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Years ago, Congress enacted the “kiddie tax” rules to prevent parents and grandparents in high tax brackets from shifting income (especially from investments) to children in lower tax brackets. And while the tax caused some families pain in the past, it has gotten worse today. That’s because the Tax Cuts and Jobs Act (TCJA) made changes to the kiddie tax by revising the tax rate structure.

A photo of four children dressed in rain gear to show how families can be affected by the new kiddie tax laws.

History of the Tax
The kiddie tax used to apply only to children under age 14 — which provided families with plenty of opportunity to enjoy significant tax savings from income shifting.

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As in the for-profit world, sometimes not-for-profits need to spend money to make money. This is particularly true when it comes to planning a fundraiser.

An event room full of people contributing to a fundraiser that benefits a particular not-for-profit.

At the same time, you need to resist the temptation to overspend or your special event may not raise the amount you were hoping for. Here’s how to stay on budget.


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You may have heard of the “nanny tax.” But even if you don’t employ a nanny, it may apply to you. Hiring a housekeeper, gardener or other household worker (who isn’t an independent contractor) may make you liable for federal income and other taxes. You may also have state tax obligations.

A nanny is babysitting two little children. Your household may be eligible for nanny tax because she is a household worker.

If you employ a household worker, you aren’t required to withhold federal income taxes from pay.

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Your not-for-profit has likely grown and evolved since it was founded. Have your bylaws kept pace? Bylaws are the rules and principles that define your organization — and, if you haven’t revisited them recently, they may not be as effective as they could be.

A woman is reading the rules or bylaws relating to her not-for-profit.

Rules and procedures
Typically, bylaws cover such topics as the broad charitable purpose of an organization. They also include rules about the size and function of the board; election terms and duties of directors and officers;


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