News and Posts

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. This issue is more likely to arise in connection with a financially troubled corporation. Deductible vs. nondeductible expenses In general, you can’t deduct an expense you incur [...]

No not-for-profit looks forward to annual audits. But regular maintenance and preparation specific to an impending audit can make the process less disruptive. We recommend taking the following steps. 1. Reconcile routinely You shouldn’t wait until audit time to reconcile accounts — for example, cash, receivables, pledges, payables, accruals and revenues. Reconcile general ledger account balances to supporting schedules (bank reconciliation, receivables and payable aging) [...]

Ten months into the 2021 fiscal year, the estimated federal budget deficit soared to $2.5 trillion, the Congressional Budget Office (CBO) reported. Estimated revenues rose 17% over the same period last FY, which “largely reflects the general strength of the economy over the past year,” the CBO stated. Estimated outlays rose 4%, due to programs related to the pandemic response that “substantially boosted spending” in [...]

If your child is fortunate enough to be awarded a scholarship, you may wonder about the tax implications. Fortunately, scholarships (and fellowships) are generally tax free for students at elementary, middle and high schools, as well as those attending college, graduate school or accredited vocational schools. It doesn’t matter if the scholarship makes a direct payment to the individual or reduces tuition. Requirements for tax-free [...]

The deadline for the third 2021 estimated tax payment is rolling up on Sept. 15. Changes in the economy brought by COVID-19 include a new crop of self-employed persons, such as gig-economy workers. Like most people with income that isn’t subject to withholding, these workers may need to make estimated tax payments for the first time. Generally, estimated tax payments are required for those who [...]

The IRS has published new guidance on the Employee Retention Credit (ERC). The credit was created in March 2020 to encourage employers to keep their workforces intact during the COVID-19 pandemic. Notice 2021-49 addresses various issues, particularly those related to the extension of the credit through 2021 by the American Rescue Plan Act (ARPA). The guidance comes as Congress weighs ending the ERC early to [...]

The National Taxpayer Advocate (NTA) is providing information about what to do if the IRS erroneously assesses tax after a taxpayer petitions the U.S. Tax Court. As a result of recent IRS and Tax Court administrative delays, the IRS has erroneously closed cases and assessed taxes because it wasn’t aware that a taxpayer had petitioned the court with regard to the taxes at issue. The [...]

Auditors of public companies started reporting critical audit matters (CAMs) in their audit opinions in 2019. This represents a major change to the pass-fail auditors’ reports that had been in place for decades. Now, accounting rule makers are assessing how this project has fared over the last two years — and whether changes are needed to provide financial statement users with more useful, cost-effective information. [...]

The IRS and the U.S. Treasury Department have announced that the August advance Child Tax Credit (CTC) payments have begun to reach eligible families. This second batch of advance monthly payments, worth about $15 billion, are reaching about 36 million families. The IRS is stressing that it’s not too late for low-income families to sign up for advance CTC payments. Anyone who normally isn’t required [...]

Auditors typically deliver financial statements to calendar-year businesses in the spring. A useful tool that accompanies the annual report is the management letter. It may provide suggestions — based on industry best practices — on how to fortify internal control systems, streamline operations and reduce expenses. Managers generally appreciate the suggestions found in management letters. But, realistically, they may not have time to implement those [...]

Despite the COVID-19 pandemic, government officials are seeing a large increase in the number of new businesses being launched. From June 2020 through June 2021, the U.S. Census Bureau reports that business applications are up 18.6%. The Bureau measures this by the number of businesses applying for an Employer Identification Number. Entrepreneurs often don’t know that many of the expenses incurred by start-ups can’t be [...]

There’s a harsh tax penalty that you could be at risk for paying personally if you own or manage a business with employees. It’s called the “Trust Fund Recovery Penalty” and it applies to the Social Security and income taxes required to be withheld by a business from its employees’ wages. Because taxes are considered property of the government, the employer holds them in “trust” [...]

When not-for-profits first start up, fundraising can be an ad hoc process, with intense campaigns followed by fallow periods. As organizations grow and acquire staff and support, they generally decide that fundraising needs to be ongoing. But it can be hard to maintain focus and momentum without a strategic fundraising plan. Here’s how to create one. Building on past experience The first step to a [...]

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 outsourcing HR makes financial and operational sense? Here’s what you should consider before acting. Take a hard look First, decide which segments of the HR function [...]