Tax and Accounting Desk

As the COVID-19 pandemic continues, various not-for-profit organizations have experienced a decline in charitable contributions from supporters, and Congress responded with a new provision in the Coronavirus Aid, Relief, and Economic Security (CARES) Act – Public Law (P.L.) 116-136.

a computer screen with white numbers and red numbers in the shape of a heart; image used for blog post about charitable deductions provision under CARES Act

This provision aims to provide relief to charitable organizations. Under Section 2204, the provision allows

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m back again with Carlos Gomez, an audit manager and one of the faces of the PKF Texas Contract Compliance Services team. Carlos, will come back to the Playbook.

Carlos: Thanks, Jen.

Jen: Carlos, in previous editions we’ve talked about vendor management audits. What are those and how do those help a company in this type of situation?

Carlos: Typically, our clients benefit from having some visibility into their vendors with a vendor audit. It will help you identify any key issues and maybe recover some expenses that you happened to lose that weren’t in line with the agreement.

Jen: So, how does a vendor audit actually work?


Continue Reading What to Know About a Vendor Audit

The IRS has provided guidance to employers regarding the recent presidential action to allow employers the deferral of the withholding, deposit and payment of certain payroll tax obligations.

The three-page guidance in Notice 2020-65 was issued to implement President Trump’s executive memorandum signed on August 8.

dollar bills sitting underneath a medical mask; image used for blog post about deferral of employees' social security tax

Private employers still have questions and concerns about whether, and how, to implement the optional deferral. The President’s action only defers the employee’s share of Social Security taxes; it doesn’t forgive them, meaning employees will still have to pay the taxes later unless Congress acts to eliminate the liability. (The payroll services provider for federal employers announced that federal employees will have their taxes deferred.)


Continue Reading Deferral of Your Employees’ Social Security Taxes

A financial audit conducted by outside experts is among the most effective tools for revealing risks in not-for-profits. They help assure donors and other stakeholders about your stability — so long as you respond to the results appropriately.

booklets and papers stacked on a wooden table; image used for blog post about what happens after a financial audit for a not-for-profit

In fact, failing to act on issues identified in an audit could threaten your organization’s long-term viability.


Continue Reading After Your Not-for-Profit’s Financial Audit…

Does your private foundation have a detailed conflict-of-interest policy? If it doesn’t — and if it doesn’t follow the policy closely — you could face IRS attention that results in penalties and even the revocation of your tax-exempt status.

Image of a paper document shaped as a question mark with the words "conflict-of-interest policy;" used for blog post about private foundations needing a conflict-of-interest policyHere’s how to prevent accusations of self-dealing.
Continue Reading Why Foundations Need Strong Conflict-of-Interest Policies

Jen: This is the PKF Texas Entrepreneur’s Playbook. I’m Jen Lemanski, and I’m here today with Carlos Gomez, an Audit Manager and one of the faces of the PKF Texas Contract Compliance services team. Carlos, welcome to the Playbook.

Carlos: Thank you. Thank you for having me.

Jen: So, what are contract compliance services?

Carlos: Contract compliance services is a mixture of different types of audit that we can do for a third-party in order to make sure you’re getting paid the right amount of money that you’re due, whether it be a license agreement or franchise or a vendor that you want to review.

Jen: So, who would need these types of services?


Continue Reading What are Contract Compliance Services?

Employees or independent contractors? It’s not only for-profit companies that struggle with the question of how to classify workers for federal tax purposes. Not-for-profit organizations must withhold and pay Social Security, Medicare and unemployment taxes for employees, but not for contractors. (There may also be state tax responsibilities.)

a Black woman and American woman pose together, wearing blazers, in front of a white board; image used for blog post about not-for-profits classifying workers for tax purposes

But be careful before you decide that most of your staffers must be contractors. The IRS may not agree.


Continue Reading How to Classify Your NFP’s Workers for Tax Purposes

If you’re getting close to retirement, you may wonder: Are my Social Security benefits going to be taxed? And if so, how much will you have to pay?

a phone calculator sitting on top of a red journal and white and grey folder; image used for blog post about paying tax on social security benefits

It depends on your other income. If you’re taxed, between 50% and 85% of your benefits could be taxed. (This doesn’t mean you pay 85% of your benefits back to the government in taxes. It merely that you’d include 85% of them in your income subject to your regular tax rates.)


Continue Reading Paying Tax on Your Social Security Benefits