Tax and Accounting Desk

Do you play a major role in a closely held corporation and sometimes spend money on corporate expenses personally? These costs may wind up being nondeductible both by an officer and the corporation unless proper steps are taken.

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This issue is more likely to arise in connection with a financially troubled corporation.


Continue Reading The Deductibility of Corporate Expenses Covered by Officers and Shareholders

The global market for human resources outsourcing was approximately $32.8 billion in 2020 and is projected to rise to $45.8 billion by 2027, according to market research company Reportlinker. Should your not-for-profit join the many organizations that have already determined that HR outsourcing makes financial and operational sense?

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Here’s what you should consider before acting.


Continue Reading Is Your Not-for-Profit Considering HR Outsourcing?

Your not-for-profit may prefer to avoid activities that subject it to unrelated business income tax (UBIT). But if you accept advertising or sponsorships that aren’t substantially related to your tax-exempt purpose, you may unwittingly expose your organization to UBIT liability.

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The rules governing these types of support are complicated, so it’s important to have a basic understanding of what is and what isn’t potentially taxable.


Continue Reading What’s Taxable for Your Not-for-Profit’s Sponsorships and Advertising?

Do you have significant investment-related expenses, including the cost of subscriptions to financial services, home office expenses and clerical costs? Under current tax law, these expenses aren’t deductible through 2025 if they’re considered investment expenses for the production of income.

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But they’re deductible if they’re considered trade or business expenses.


Continue Reading Can Taxpayers Who Manage Their Own Investment Portfolios Deduct Related Expenses?

Cryptocurrency has gone mainstream, and if you’ve been sitting on the fence about accepting donations in virtual currency, it’s time to make a decision. But before your not-for-profit says “yes” to a Bitcoin (or other cryptocurrency) gift, make sure you understand the issues involved — including the risks.

Virtual currency = risk

Cryptocurrency refers to a decentralized form of digital currency that’s tracked in a blockchain ledger. Unlike traditional currencies, the ledger doesn’t reside with a central authority, such as a bank or government, but across public peer-to-peer networks. The value of cryptocurrencies derives in part from its scarcity. In the case of Bitcoins, for example, the supply is limited to 21 million “coins.”
Continue Reading Cryptocurrency donations: Will your nonprofit accept them?

The IRS just released its audit statistics for the 2020 fiscal year and fewer taxpayers had their returns examined as compared with prior years. But even though a small percentage of returns are being chosen for audit these days, that will be little consolation if yours is one of them.

Latest statistics

Overall, just 0.5% of individual tax returns were audited in 2020. However, as in the past, those with higher incomes were audited at higher rates. For example, in 2020, 2.2% of taxpayers with adjusted gross incomes (AGIs) of between $1 million and $5 million were audited. Among the richest taxpayers, those with AGIs of $10 million and more, 7% of returns were audited in 2020.
Continue Reading IRS Audits may be Increasing, so be Prepared

During the pandemic, your not-for-profit may have been forced to operate without your dedicated volunteers. It has probably come as a great relief to welcome them back in person. However, a volunteer, like an employee, could represent some risk to your organization.

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For example, you could be exposed to lawsuits if volunteers are harmed or harm others while volunteering for you.


Continue Reading Considerations for Tackling Volunteer Liability