Avoid these common not-for-profit financial statement mistakes
At times during audit season, not-for-profit financial statement auditors may feel like medical professionals in January. They're extremely busy, and many of the "patients" receive the same diagnosis.
"It's like flu season," said Dennis Morrone, CPA, the national partner-in-charge of audit services in Grant Thornton's not-for-profit and higher education practices. "It seems like as we go through audit season, organizations are dealing with the same kinds of issues."
Morrone co-presented at a session on common not-for-profit financial statement mistakes last month at the AICPA Not-for-Profit Industry Conference near Washington. The good news is that one of the most common issues leading to not-for-profit restatements — classification of donor gifts — is changing with the implementation of FASB Accounting Standards Update No. 2016-14, Not-for-Profit Entities (Topic 958), Presentation of Financial Statements of Not-for-Profit Entities.
How well is your business really doing? Here’s a “key” to let you know!
Do you know if your business is performing well? If so, how do you know? Maybe you look at the bottom line and see there is a profit? Maybe you just make sure there is cash in the bank account?
These might be indicators that the business is surviving, but they don’t give you an idea of how well the business is performing. To know how your business is performing, it can be very useful to track some of your businesses key performance indicators (KPI).
Key performance indicators are measurable values that help determine if a business objective is successful. These can be used throughout the organization to measure success. It is important to pick metrics that are important to your business. They should be metrics that you understand and that are meaningful to it.
State and local tax implications of federal tax reform for tax-exempt organizations
In the rush to understand the changes made by the 2017 federal tax reform law, known as the Tax Cuts and Jobs Act (TCJA), tax-exempt organizations may not yet have had time to consider how the federal changes may affect state taxes. Similarly, state taxing authorities and state tax practitioners may be so wrapped up in the state and local tax (SALT) implications of the TCJA for individuals or regular C corporations (especially changes affecting the 2017 tax year) that they may not yet have had time to consider the SALT implications of tax reform for tax-exempt organizations.
Significant changes to federal unrelated business income under TCJA
A tax-exempt organization is generally subject to federal income tax only on unrelated business income (UBI) — generally, income that is unrelated to the organization's tax-exempt purpose. The TCJA made several significant changes to the definition and structure of federal UBI, effective for tax years beginning after Dec. 31, 2017. One such change is the new "siloing" rule, under which a tax-exempt organization must track its income and expenses from each separate unrelated trade or business, and losses derived from one unrelated trade or business may not offset the income from another unrelated trade or business.
Dugan & Lopatka talks Tax Cuts & Jobs Act on NCTV17
Tax Department Principal, Peter Zich and Tax Manager, Andrew Schmidt, recently sat down with Liz Spencer, host of NCTV17's Business Connections to discuss the Tax Cuts & Jobs Act and how it is affecting local businesses and individuals.
Summer's a time for vacations and tax planning
It's tempting to take a break from everything this summer, but you may regret it come tax season if you push off tax planning. Here are some tips to help you keep your head in the game even when your feet are in the pool:
• If you are a sole proprietor with children, consider putting them on the payroll during the summer months. Wages paid to your children under age 18 are not subject to Social Security and Medicare taxes. What's more, their earnings are not subject to federal unemployment tax until they turn 21.
If employing your children is not an option, you might still be able to score a deduction by sending them to summer camp. Day camp expenses for kids under 13 can provide a tax credit of up to 35 percent. Just remember, overnight camps do not qualify, and usually both parents must work to claim this credit.
Four ways you can cut spending in retirement — with little sacrifice
Looking for ways to control, perhaps slash, your spending in retirement without sacrificing your quality of life? Spending does generally decline in retirement. The real challenge for many retirees is how to cut spending in retirement — perhaps lots of spending — without resorting to radical, depressing solutions like eating bologna sandwiches five days a week.
Here are tips for saving money, often big bucks, in four key areas of retirement spending from experts:
Health care. This is the big kahuna of retirement expenses. Health care will cost a 65-year-old couple retiring this year a whopping $280,000 throughout retirement, according to Fidelity Investments.
How can you put a dent into such a staggering demand on your retirement finances? Exercise and education can make a big difference.