As watchdog groups and other stakeholders continue to expect increased transparency from nonprofits, it’s become all the more important for organizations to prepare Form 990 as accurately and completely as possible. These publicly available forms can expose organizations to public scrutiny, but they can also leave the door open for preventable penalties from the IRS and state and local taxing authorities. Read the list below to learn about some of the hidden pitfalls in your Form 990 that you may never have noticed, but need to address.
The interest rates the IRS charges on underpaid taxes and pays on tax overpayments have gone up for the second quarter of 2016 (April 1 through June 30). Here are the new rates for individuals and corporations.
It’s critical for an enterprise periodically to review the status of its workers and see if they are properly classified. An enterprise must withhold federal income tax, social security taxes, and federal unemployment taxes on wages it pays workers who are employees. It also may have to provide them with the same fringe benefits and retirement plan coverage available to its other employees. There may be state tax obligations as well. By contrast, these responsibilities don’t apply for workers who are independent contractors. The business simply cuts them a check for their services and sends them a form 1099-misc.
As business owners, business consultants and certified public accountants for over 35 years, we have witnessed fraud firsthand and have seen fraud in approximately 20%-30% of businesses. Many of these fraud cases were committed by a trusted employee.
Two-thirds of workers want to work until age 65 or later, but deteriorating health and mental decline can make this difficult. This is especially true for jobs that involve physical labor, but also for white-collar jobs where fluid cognitive abilities are important.
Take a look at the Spring 2016 Manufacturing Output Newsletter, which includes the following articles:
Back in November 2015, the FASB released a proposed accounting standard update (ASU) designed to increase transparency about government assistance to businesses for comment. This proposed ASU,Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance, was developed in response to increasing levels of monetary assistance from both the federal government and state and local governments as well. In the proposed ASU, nonprofits have been initially scoped out.
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Builders have available to them a little known deduction called the Domestic Manufacturing Deduction or called by its code section “The 199 Deduction”. The deduction is available to builders who have profits and payroll.
The 199 deduction is allowed to all taxpayers—individuals (shown on Form 1040 line 35), and C corporations (shown on Form 1120 line 25). The 199 deduction for partnerships and S corporations (reported on Form K-1 in box 13) flows through to the owner’s individual tax return.
Did you hire workers who qualified for the Work Opportunity Tax Credit in 2015?