A spending policy is the formula used to determine how much of the value of investments a nonprofit organization will tap each year for such expenses as operating costs and capital projects. Although it’s usually a good idea to stick with an established spending policy, circumstances may warrant changes.
There’s no one-size-fits-all optimal spending policy. But five general types have emerged — each with pros and cons:
Although merger and acquisition activity has been down in 2022, according to various reports, there are still companies being bought and sold. If your business is considering merging with or acquiring another business, it’s important to understand how the transaction will be taxed under current law.
It’s not just businesses that can deduct vehicle-related expenses on their tax returns. Individuals also can deduct them in certain circumstances. Unfortunately, under current law, you may not be able to deduct as much as you could years ago.
Many states have already held primary elections, and the airwaves are clogged with candidate ads. Yes, the November “mid-terms” election season has begun! So now is a good time to review political activity restrictions that affect Section 501(c)(3) organizations.
Here are some of the key tax-related deadlines affecting businesses and other employers during the third quarter of 2022. Keep in mind that this list isn’t all-inclusive, so there may be additional deadlines that apply to you. Contact us to ensure you’re meeting all applicable deadlines and to learn more about the filing requirements.
Are you in the early stages of divorce? In addition to the tough personal issues that you’re dealing with, several tax concerns need to be addressed to ensure that taxes are kept to a minimum and that important tax-related decisions are properly made. Here are five issues to consider if you’re in the process of getting a divorce.
When the COVID-19 pandemic forced lockdowns in Spring 2020, many not-for-profit organizations initially resisted laying off employees. Retention tax credits provided under the CARES Act helped. But nonprofits that are still struggling may think they have no choice but to cut compensation expenses, especially as high inflation increases the cost of other expenses.
However, your organization may still have alternatives to terminating employees. Here are some ideas for organization-wide cost cutting.
There’s a valuable tax deduction available to a C corporation when it receives dividends. The “dividends-received deduction” is designed to reduce or eliminate an extra level of tax on dividends received by a corporation. As a result, a corporation will typically be taxed at a lower rate on dividends than on capital gains.
Ordinarily, the deduction is 50% of the dividend, with the result that only 50% of the dividend received is effectively subject to tax. For example, if your corporation receives a $1,000 dividend, it includes $1,000 in income, but after the $500 dividends-received deduction, its taxable income from the dividend is only $500.
As a result of the current estate tax exemption amount ($12.06 million in 2022), many people no longer need to be concerned with federal estate tax. Before 2011, a much smaller amount resulted in estate plans attempting to avoid it. Now, because many estates won’t be subject to estate tax, more planning can be devoted to saving income taxes for your heirs.
Recently, the Association of Certified Fraud Examiners (ACFE) published its biannual Report to the Nations: 2022 Global Study on Occupational Fraud and Abuse. Of all the types of organizations surveyed by the ACFE, not-for-profits actually were the least likely to experience occupational fraud. However, nonprofits also are generally the least likely to be able to afford fraud losses. So it’s important for your organization’s leaders to understand the risks and take steps to prevent criminal activity.