A financial dashboard can take your nonprofit where it wants to go

Does your board have a quick and easy way to assess your not-for-profit’s financial performance? It does if it has a dashboard with carefully chosen and up-to-date key performance indicators (KPIs). Dashboards can also be set up to provide critical information to multiple audiences regarding specific goals and fundraising campaigns. Here’s how you can get started.

Why an LLC might be the best choice of entity for your business

The business entity you choose can affect your taxes, your personal liability and other issues. A limited liability company (LLC) is somewhat of a hybrid entity in that it can be structured to resemble a corporation for owner liability purposes and a partnership for federal tax purposes. This duality may provide you with the best of both worlds.

Home sweet home: Do you qualify for office deductions?

If you’re a business owner working from home or an entrepreneur with a home-based side gig, you may qualify for valuable home office deductions.

But not everyone who works from home gets the tax break. Employees who work remotely can’t deduct home office expenses under current federal tax law.

To qualify for a deduction, you must use at least part of your home regularly and exclusively as either:

  • Your principal place of business, or
  • A place to meet with customers, clients or patients in the normal course of business.

How to share your nonprofit’s values and limit fraud losses

Every two years, the Association of Certified Fraud Examiners releases its Report to the Nations, an occupational fraud study of for-profit, not-for-profit and government organizations. As in previous editions, the 2022 study reports that most organizations require employees to read and sign a code of ethics or conduct. This relatively simple control can result in a median 40% reduction in fraud losses, should fraud occur.

But codes of ethics are about more than limiting potential fraud losses. They also provide your nonprofit with an opportunity to document and disseminate its core values.

An “innocent spouse” may be able to escape tax liability

When a married couple files a joint tax return, each spouse is “jointly and severally” liable for the full amount of tax on the couple’s combined income. Therefore, the IRS can come after either spouse to collect the entire tax — not just the part that’s attributed to one spouse or the other. This includes any tax deficiency that the IRS assesses after an audit, as well as any penalties and interest. (However, the civil fraud penalty can be imposed only on spouses who’ve actually committed fraud.)

For a stronger nonprofit, increase the number of income streams

Not-for-profits that rely on a single income source, or only a few, are vulnerable to economic shocks. The COVID-19 pandemic has made this particularly clear. Most organizations have had to scramble to make up for lost revenue when at least some of their usual support dried up in 2020 — and has been slow to return. If you’ve had a hard time staying afloat over the past couple of years, you may need to diversify your nonprofit’s income stream.

How to treat business website costs for tax purposes

These days, most businesses have websites. But surprisingly, the IRS hasn’t issued formal guidance on when website costs can be deducted.

Fortunately, established rules that generally apply to the deductibility of business costs provide business taxpayers launching a website with some guidance as to the proper treatment of the costs. Plus, businesses can turn to IRS guidance that applies to software costs.

Estimated tax payments: Who owes them and when is the next one due?

If you don’t have enough federal tax withheld from your paychecks and other payments, you may have to make estimated tax payments. This is the case if you receive interest, dividends, self-employment income, capital gains or other income. Here are the applicable rules for paying estimated tax without triggering the penalty for underpayment.

If you’re hiring, take a look at veterans

Despite widespread fears of recession in recent months, hiring remains strong in the United States. Employers added 528,000 jobs in July 2022 and many organizations seeking new workers are having trouble filling positions. If your not-for-profit has open slots, you might want to look to military veterans. This demographic can have a harder time finding civilian jobs, and tax breaks may be available for employers who hire them.