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Three Questions You May Have After You File Your Return

After filing a tax return, you may have questions. 1. Where’s my refund? Go to irs.gov and click on “Refund Status” to find out. 2. How long must I save tax records? You should generally save them for 3 years after filing (although keep the actual returns indefinitely). But there are exceptions to this general rule. 3. If I forgot something on my return, can I still claim a refund? You can generally file an amended return to claim a refund within 3 years after the date you filed the original return or 2 years of the date you paid the tax, whichever is later.

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Now or later? When To Report Subsequent Events

Financial statements present a company’s financial position as of a specific date. But some events happen after the cutoff date that have financial implications for the prior period or the future. Subsequent events that provide further evidence of conditions that existed on the financial statement date must be recorded. Other unforeseeable events may be disclosed in the footnotes to keep the financial statements from being misleading. Contact us to help determine the appropriate accounting treatment for these types of events.

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Seniors: Medicare Premiums Could Lower Your Tax Bill

Medicare premiums and supplemental insurance can be more expensive than seniors expect. However, some taxpayers may be able to lower their tax bills by deducting Medicare premiums and other qualifying medical expenses. However, it can be difficult to qualify to claim medical expenses on your tax return. For 2019, you can deduct medical expenses only if you itemize deductions and only to the extent that total qualifying expenses exceeded 10% of adjusted gross income. Contact us if you have questions about writing off medical expenses, including Medicare premiums.

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Make A Deductible IRA Contribution For 2018. It’s Not Too Late!

You still have time to make your 2018 traditional and Roth IRA contributions. The deadline for most taxpayers is April 15, 2019. If you qualify, deductible contributions to traditional IRAs can lower your 2018 tax bill. Even nondeductible contributions can be beneficial because of tax-deferred growth. The 2018 contribution limit is $5,500 (plus $1,000 for those age 50 or older on Dec. 31, 2018). However, your deduction or contribution may be reduced or eliminated based on your income. Contact us to learn more about retirement saving in your situation.

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Why You Should Run Your Nonprofit Like A Business

The missions of for-profits and not-for-profits may be different, but how to achieve them often are the same. If you’re looking for fresh ideas, try some from the business world. One example is a strategic plan that sets objectives for one, five and 10 years and focuses on each goal’s return on investment. Consider tying your annual budget to your strategic plan. And you might apply for a loan (or create a for-profit subsidiary) so you’ll have the funds to grow. Finally, conduct annual audits to reassure stakeholders of your nonprofit’s financial integrity.

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Simplifying The Accounting Rules For Convertible Debt And Equity

Distinguishing between liabilities and equity may seem straightforward. But difficulties arise when it comes to accounting for convertible instruments, such as equity-linked bonds and preferred stock. To help reduce confusion and restatements, the Financial Accounting Standards Board started work on a simplification project. It would narrow down the accounting models for convertible debt from five to one or two models and require convertible preferred shares to be recognized as a single equity element. Contact us for the latest developments on this project.

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Writing A Winning Grant Proposal

Your not-for-profit can’t afford to submit sloppy, unprofessional grant proposals. You’ll be more successful if you familiarize yourself with the grant-maker’s goals and objectives, the types of projects it has funded in the past, and its processes and procedures. Your proposal should follow the grant-maker’s instructions to the letter, meet all deadlines and include adequate support with facts and figures. Also, be sure to double-check for spelling, math and other errors before submitting your proposal. If you need help with your revenue model, contact us.

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Still Working After Age 70½? You May Not Have To Begin 401(k) Withdrawals

If you participate in a qualified retirement plan, such as a 401(k), you must generally begin taking required minimum distributions (RMDs) no later than April 1 of the year after which you turn age 70½. The penalty for withdrawing less than the RMD is 50% of the portion that should have been withdrawn but wasn’t. However, there’s an exception that may apply to certain people if they’re still working for the entire year in which they turn 70½. The RMD rules are complex. Contact us to customize a plan based on your individual retirement and estate planning goals.

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Stretch Your College Student’s Spending Money With The Dependent Tax Credit

If you’re the parent of a child age 17 to 23, and you pay all (or most) of his or her expenses, you may be surprised to learn you’re not eligible for the child tax credit. But there’s a $500 dependent tax credit that may be available to you. That can provide some extra spending money! To qualify, you and your child must pass certain tests. These include: The child lives with you for over half the year; the child is over age 16 and up to age 23 if he or she is a student; and you provide over half of the child’s support for the year. Contact us for more details.

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ESG issues: To Report Or Not To Report?

To disclose or not to disclose? Most companies report environmental, social and governance (ESG) matters in the business description, legal proceedings and risk factors disclosure sections of their financial statements, as well as in the management’s discussion and analysis section. Though some stakeholders want more information, the SEC says that ESG disclosures should stay voluntary and unstandardized to keep them relevant. We can help create financial statement disclosures and standalone reports that reflect your company’s most pressing ESG concerns.

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Holding On To Your Nonprofit’s Exempt Status

Whether you’re running a 501(c)(3) or other type of tax-exempt organization, be careful. The activities you conduct and the ways you generate and use revenue could threaten your exempt status. Lobbying and campaign activities are generally restricted for 501(c)(3) nonprofits. And all nonprofits should ensure that excess profits aren’t used for the private benefit of an individual or entity. Also, organizations that generate income through a business conducted regularly and outside their mission’s scope may be subject to scrutiny. Contact us for information.

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The 2018 Gift Tax Return Deadline Is Almost Here

Did you make large gifts to your heirs in 2018? If so, it’s important to determine whether you’re required to file a gift tax return by April 15 (Oct. 15 if you file for an extension). Generally, you’ll need to file one if you made 2018 gifts that exceeded the $15,000-per-recipient gift tax annual exclusion (unless to your U.S. citizen spouse) and in certain other situations. But sometimes it’s desirable to file a gift tax return even if you aren’t required to. If you’re not sure whether you must (or should) file a 2018 gift tax return, contact us.

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Audits Home In On Cybersecurity

In 2018, the average organizational cost of a data breach in the United States was $7.91 million. With so much at stake, it’s no surprise that auditors consider data security when conducting their audit risk assessments. During audit fieldwork, expect to answer questions about cybersecurity and the effectiveness of your company’s internal controls against these threats. Your answers, in turn, can help you formulate more effective governance strategies.

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Does Your Nonprofit Adequately Protect Whistleblowers?

A formal whistleblower policy is critical to protecting your not-for-profit’s financial security and public reputation. Your policy should state which individuals (for example, staffers, volunteers and clients) and activities (such as fraud, conflicts of interest and discrimination) are covered. Also explain how reports will be investigated and what will happen when investigations end. It’s particularly important to stress that your nonprofit will protect whistleblower confidentiality to the extent possible.

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D&O Insurance: Some FAQs For Nonprofits

Directors and officers (D&O) liability insurance enables board members to make decisions without fear that they’ll be personally responsible for any related litigation costs. Such coverage is common in the business world, but many not-for-profits incorrectly assume that their charitable mission and the volunteer status of their board insulate them from lawsuits. To determine whether your nonprofit needs D&O insurance, consider the risks you may face (for example, financial mismanagement and self-dealing), the policy period and the claims insurers will reimburse.

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Auditing Cashless Transactions

Does your business accept cashless payments, such as credit cards, PayPal, Venmo or even Bitcoin? If so, your auditors may need to modify their procedures to address your company’s electronic sales records. This requires four specific audit procedures: 1) identifying accepted payment methods, 2) evaluating roles and responsibilities, 3) testing the reconciliation process, and 4) analyzing trends for anomalies. Before we start fieldwork, let’s discuss the types of cashless payments you currently accept or plan to take in the future.

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How To Convince Donors To Remove “Restricted” From Their Gifts

Restricted gifts can be difficult for not-for-profits to manage. Unlike unrestricted gifts, these donations can’t go into your general operating fund and be used where they’re most needed. Some donors will be determined to make restricted gifts, but you may be able to persuade others to remove restrictions if you explain how the money will be used in a responsible and mission-enhancing way. Provide donors with sample bequest language that refers to your general fund. Use similar language in fundraising materials and thank-you letters. Contact us for more ideas.

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Public Companies To Disclose Stock Hedging Policies And Practices

Some public companies issue stock compensation to help align the financial interests of company insiders and shareholders. But the prevalence of hedging instruments has eroded that common interest. New SEC guidance will soon require public companies to disclose whether their employees (including officers) and directors are allowed to hedge a decrease in the market value of the company’s stock. Does this disclosure requirement apply to your company? In addition to drafting hedging disclosures, we can discuss best practices regarding hedging policies.

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Warning! 4 Signs Your Nonprofit Is In Financial Danger

To avert potential disaster and ensure your not-for-profit’s long-term survival, board members need to be alert to subtle signs of financial distress. These might include budget variances that aren’t easily explained or management dipping into operational reserves. Also be wary of financial statements that are late, inconsistent or not prepared according to GAAP. And investigate if long-time donors express concern about your nonprofit’s finances or the executive director starts to overstep his or her authority. Contact us if you suspect financial trouble.

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Private Companies: Have You Implemented The New Revenue Recognition Standard?

Private companies that follow Generally Accepted Accounting Principles (GAAP) must use an updated five-step method to recognize revenue beginning in 2019. Public companies that made the switch in 2018 report that the process was more difficult than expected. The standard required them to comb through contracts, make subjective judgment calls and offer paper trails to back up their estimates to auditors. If you haven’t started implementing this landmark standard, we can help prepare your revenue reporting systems, processes and policies.

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Why You Shouldn’t Wait to File Your 2018 Income Tax Return

The IRS opened the 2018 income tax return filing season on Jan. 28. Consider filing as soon as you can, even if you typically don’t file this early. It can help protect you from tax identity theft, in which a thief files a return using your Social Security number to claim a bogus refund. If you file first, it will be returns filed by any would-be thieves that are rejected by the IRS, not yours. Other benefits: You’ll get your refund sooner or, if you owe tax, you’ll know how much you owe sooner so you can be ready to pay it by April 15. Contact us with questions.

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Is Your Nonprofit Ready for a Raffle?

Raffles are popular fundraisers for not-for-profits. But they’re subject to strict tax rules. State laws on nonprofit-sponsored raffles vary, but you must comply with federal income tax requirements. First, you may owe unrelated business income tax unless your fundraiser is “substantially” staffed by volunteers. Second, raffle winnings must be reported to the IRS when the amount is $600 or more and at least 300 times the raffle ticket price. Third, you need to withhold income tax from the winnings if the proceeds are more than $5,000. Contact us for details.

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