Tax and Accounting Desk

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.

Continue Reading

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;


Continue Reading

There’s good news about the Section 179 depreciation deduction for business property. The election has long provided a tax windfall to businesses, enabling them to claim immediate deductions for qualified assets, instead of taking depreciation deductions over time. And it was increased and expanded by the Tax Cuts and Jobs Act (TCJA).

It would be smart to purchase items for your business now because of deprecation deductions with Section 179. This photo is of a person holding a leather wallet in one hand and pulling money out with the other.

Even better, the Sec. 179 deduction isn’t the only avenue for immediate tax write-offs for qualified assets.


Continue Reading

Based on the number of SEC comment letters publicly published, the overall volume has been steadily decreasing for the last nine years. We looked at the most common issues raised in an SEC comment letter; the table below shows 10 of the top issues discussed in these letters over the past three years. It is important to note that, in many cases, more than one issue is mentioned.

numeric table listing common issues with SEC comment letters and the numbers of reviews with a comment on respective topic

The major topics in 2018 were similar to what we have seen in 2016 and 2017, with MD&A, the use of non-GAAP measures and fair value comments at the top of the list. There are, however, some new emerging trends SEC filers should consider:


Continue Reading

Not-for-profit organizations don’t lose as much to occupational fraud as for-profit businesses do. According to the Association of Certified Fraud Examiners’ (ACFE’s) 2018 Report to the Nations, not-for-profits lost a median amount of $75,000 during the 21-month study period, compared with $164,000 for private for-profit companies. Yet few not-for-profit budgets can afford a $75,000 shortfall or the bad publicity associated with fraud.

A photo of grey padlocks on a red metal fence to show why Not-for-Profits need protection from fraud.

Here’s how not-for-profits open the door to occupational fraud — and how your organization can shut it.


Continue Reading

If you’re a volunteer who works for charity, you may be entitled to some tax breaks if you itemize deductions on your tax return. Unfortunately, they may not amount to as much as you think your generosity is worth.

Because donations to charity of cash or property generally are tax deductible for itemizers, it may seem like donations of something more valuable for many people — their time — would also be deductible. However, no tax deduction is allowed for the value of time you spend volunteering or the services you perform for a charitable organization.

A women with white nail polish on her nails is holding loose change in an effort to give back to charity through donation. She is standing on a curbside.

It doesn’t matter if the services you provide require significant skills and experience, such as construction, which a charity would have to pay dearly for if it went out and obtained itself. You still don’t get to deduct the value of your time.

However, you potentially can deduct out-of-pocket costs associated with your volunteer work.


Continue Reading

Not-for-profits with multiple sources of support are generally less likely to have budget shortfalls and are better able to grow and expand their services. If you’re looking for new funding sources, consider cause marketing.

overhead view of a wooden desk with a piece of paper in the center that says "marketing strategy" with books sitting to the left, titled "marketing and pricing"

Made possible via a partnership with a for-profit business, cause marketing can boost your budget, your public profile and even your volunteer base.
Continue Reading

According to a July 1, 2019 Notice from the Office of Federal Financial Management, the 2019 Office of Management and Budget Compliance Supplement (2019 Compliance Supplement) is now available. It will replace the 2018 and 2017 Supplements and will apply to audits of fiscal years beginning after June 30, 2018.

a pencil lying beside an open notebook with the printed words "2019 Compliance Supplement"

The 2019 Compliance Supplement includes the following:


Continue Reading

During your working days, you pay Social Security tax in the form of withholding from your salary or self-employment tax. And when you start receiving Social Security benefits, you may be surprised to learn that some of the payments may be taxed.

If you’re getting close to retirement age, you may be wondering if your benefits are going to be taxed. And if so, how much will you have to pay? The answer depends on your other income. If you are taxed, between 50% and 85% of your payments will be hit with federal income tax. (There could also be state tax.)

A photo of sheets of paper and a notebook being used to calculate the taxes from Social Security benefits.
Important: This doesn’t mean you pay 50% to 85% of your benefits back to the government in taxes. It means that you have to include 50% to 85% of them in your income subject to your regular tax rates.


Continue Reading

The IRS’s staffing shortages have been well publicized and audits of individuals have decreased in the past several years. But it’s a mistake to assume that the agency has stopped scrutinizing not-for-profits and conducting audits when it deems necessary. If your organization receives an IRS audit letter, you need to know what the process involves and how you can help resolve it as quickly as possible.

Image of a man in a blue shirt writing audit letters on pieces of paper with a pen


Continue Reading