Many not-for-profits have been too busy trying to stay afloat to put a lot of resources and energy into public relations. But as the new year begins, you might start thinking about how you’ll promote your organization, mission and programming in 2021. Here are five suggestions:
The best choice of entity can affect your business in several ways, including the amount of your tax bill. In some cases, businesses decide to switch from one entity type to another. Although S corporations can provide substantial tax benefits over C corporations in some circumstances, there are potentially costly tax issues that you should assess before making the decision to convert from a C corporation to an S corporation.
Many not-for-profits experience a flood of last-minute donations at the end of the year. Although cash is easy to value, valuing noncash property donations is trickier. If you’re struggling to assign amounts to contributions — either for a donor or your own records — review this cheat sheet.
Here are some of the key tax-related deadlines affecting businesses and other employers during the first quarter of 2021. 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.
When it comes to taxes, December 31 is more than just New Year’s Eve. That date will affect the filing status box that will be checked on your 2020 tax return. When filing a return, you do so with one of five tax filing statuses. In part, they depend on whether you’re married or unmarried on December 31.
More than one filing status may apply, and you can use the one that saves the most tax. It’s also possible that your status could change during the year.
If your charity or association depends financially on membership fees, you know that non-renewals are cause for concern. During this time of economic and occupational insecurity, you may be experiencing membership drop-offs and some anxiety about your organization’s future. How can you help retain members and attract new ones to your not-for-profit? By focusing on needs, providing value and prioritizing engagement.
If you’re self-employed and don’t have withholding from paychecks, you probably have to make estimated tax payments. These payments must be sent to the IRS on a quarterly basis. The fourth 2020 estimated tax payment deadline for individuals is Friday, January 15, 2021. Even if you do have some withholding from paychecks or payments you receive, you may still have to make estimated payments if you receive other types of income such as Social Security, prizes, rent, interest, and dividends.
If the events of 2020 have taught not-for-profits anything, it’s that financial reserves are essential to long-term survival. An endowment is different from operating reserves and generally is designed to provide steady income to a nonprofit while its core investments grow untouched. But that steady income can be a financial safeguard in times of crisis.
If you own a business, you may wonder if you’re eligible to take the qualified business income (QBI) deduction. Sometimes this is referred to as the pass-through deduction or the Section 199A deduction.
The QBI deduction:
- Is available to owners of sole proprietorships, single member limited liability companies (LLCs), partnerships, and S corporations, as well as trusts and estates.
- Is intended to reduce the tax rate on QBI to a rate that’s closer to the corporate tax rate.
- Is taken “below the line.” In other words, it reduces your taxable income but not your adjusted gross income.
- Is available regardless of whether you itemize deductions or take the standard deduction.
You may be able to deduct some of your medical expenses, including prescription drugs, on your federal tax return. However, the rules make it hard for many people to qualify. But with proper planning, you may be able to time discretionary medical expenses to your advantage for tax purposes.