Thinking about hiring a new auditor can be overwhelming. Many times over the years I have heard auditees say, “I don’t want to get used to a new auditor, or have to deal with a new process.” They want to stick with what’s comfortable and familiar, despite the possibility that a better option may exist out there. However, there could be an auditor that is a much better fit for your organization, and you are missing out on an opportunity to better serve your organization by not considering the below items. Here are 10 signs that it may be time to consider a change. There are in no particular order, as each organization may feel certain items are more important than others.
When it comes to preparing individual tax returns, many individuals wonder what kind of documentation they need to support their charitable contributions. First and foremost, to qualify for a charitable contribution deduction, a contribution must have been given to a qualified charitable organization. The Internal Revenue Service (IRS) website contains a link in to search for exempt organizations (https://www.irs.gov/charities-non-profits/search-for-charities). Donations given to directly to an individual in need are not considered a deductible contribution but instead are considered by the IRS to be personal gifts. Secondly, an individual can only deduct contributions if they are itemizing their individual tax return. Generally an individual may be able to deduct up to 50 percent of their adjusted gross income, however, there are limitations. Seek advice regarding your individual deduction limitations from a tax professional.
A nonprofit will not ordinarily be taxed on its revenues. However, income from unrelated business income is subject to tax (UBIT). UBIT is based on gross income derived by any nonprofit from any unrelated business activity it regularly conducts less the expenses directly connected with the activity.
In 2007, President George Bush signed into law the Public Student Loan Forgiveness Program. This program allows people working in certain industries to have their student loans forgiven, tax-free, after 10 years. Usually people believe this program only applies to governmental employees. However, the law allows for employees of a 501(c)(3) not-for-profit to also qualify for student loan forgiveness. This is a great way to attract employees who may otherwise require a larger salary and a great way to keep employees at your not-for-profit.
On Tuesday May 23, President Trump released his budget request for 2018 entitled “A New Foundation for American Greatness.”
The U.S. Government suffered budget deficits every year from 1970 through 1997. There were surpluses recorded in 1998 through 2001, but deficits returned from 2002 through today.
President Trump signed the Promoting Free Speech and Religious Liberty Executive Order on May 4, 2017. This Executive Order requests that the Treasury and IRS no longer enforce the Johnson Amendment, which does not allow 501(c)(3) tax exempt organizations to engage in certain types of political activities.
Interest in not-for-profits’ governance practices from lawmakers, watchdog groups and the general public has been growing in recent years. If your board hasn’t reviewed its roles and responsibilities recently, now is a good time.