Thursday, May 25th, 2017

Mauldin & Jenkins Sponsors Angelman Syndrome Foundation 5K and Walk

Mauldin & Jenkins was proud to sponsor the Angelman Syndrome Foundation 5K and Walk this past Saturday, May 20th. The event was created in order to raise funds and awareness for a cure, and M&J was more than happy to support such an amazing cause. 1st place went to Claire Shelton, the daughter of one of our very own Atlanta staff members, Jonna Shelton!

To learn more about the disorder and find out ways you can help, visit the foundation website:

Wednesday, May 24th, 2017

How nonprofit youth sports leagues can prevent fraud

Many not-for-profit youth sports leagues are at risk for fraud and don’t even know it. Because cash transactions are common and leagues usually are managed by volunteers with little oversight, it’s easy for crooked individuals to take advantage of the situation. Unfortunately, sports league fraud is usually committed by board members or officers who are well known and respected in their communities. How then can your league prevent this crime?

Simple steps

By far the most important step you can take is to segregate duties. This means that no single individual receives, records and deposits funds coming in, pays bills and reconciles bank statements. Assign someone uninvolved in handling deposits and payments to receive and reconcile the bank statement. A different person should monitor the budget, and every payment (or at least payments over a certain threshold) should require two signatures. If your league has credit or debit cards, ask someone who isn’t an authorized user to review the statements.

Also, your league should:

Mandate board review. Your board of directors should receive and review financial reports on a quarterly or monthly basis — including when the league isn’t in season. The treasurer should submit a report for every board meeting, with bank statements attached.

Require online registration and payment. A lot of leagues still use paper registrations and accept payment by cash or check. Cash can be pocketed in the blink of an eye, and checks can be diverted to thieves’ own accounts. But with online registration, payments are deposited directly into the league’s account.

Rotate treasurers. Treasurers are the most likely youth sports league officials to commit fraud because they have the easiest access to funds and the ability to cover their tracks. Make sure no one person stays in the treasurer position for more than a couple of years. If funds are available, consider hiring a part-time bookkeeper who will report directly to your board.

Not all fun and games

Many youth sports leagues are ripe for fraud, in large part because of their lack of formality and their environment of trust. Structure may seem counter to the spirit of amateur leagues, but if your group doesn’t adopt some smart business practices, it could end up out of business. Contact us for more information.

© 2017

Tuesday, May 23rd, 2017

A “back door” Roth IRA can benefit higher-income taxpayers

A potential downside of tax-deferred saving through a traditional retirement plan is that you’ll have to pay taxes when you make withdrawals at retirement. Roth plans, on the other hand, allow tax-free distributions; the tradeoff is that contributions to these plans don’t reduce your current-year taxable income.

Unfortunately, your employer might not offer a Roth 401(k) or another Roth option, and modified adjusted gross income (MAGI)-based phaseouts may reduce or eliminate your ability to contribute to a Roth IRA. Fortunately, there is a solution: the “back door” Roth IRA.

Are you phased out?

The 2017 contribution limit for all IRAs combined is $5,500 (plus an additional $1,000 catch-up contribution if you’ll be age 50 or older by December 31). You can make a partial Roth IRA contribution if your MAGI falls within the applicable phaseout range, but no contribution if it exceeds the top of the range:

  • For married taxpayers filing jointly: $186,000–$196,000.
  • For single and head-of-household taxpayers: $118,000–$133,000.

(Note: Married taxpayers filing separately are subject to much lower phaseout ranges.)

Using the back door

If the income-based phaseout prevents you from making Roth IRA contributions and you don’t already have a traditional IRA, a “back door” IRA might be right for you.

How does it work? You set up a traditional account and make a nondeductible contribution to it. You then wait until the transaction clears and convert the traditional account to a Roth account. The only tax due will be on any growth in the account between the time you made the contribution and the date of conversion, which should be little, if any, assuming you’re able to make the conversion quickly.

More limited tax benefit in some cases

If you do already have a traditional IRA, the back-door Roth IRA strategy is still available but there will be more tax liability on the conversion. A portion of the amount you convert to a Roth IRA will be considered attributable to deductible contributions and thus be taxable. It doesn’t matter if you set up a new traditional IRA for the nondeductible contributions; all of your traditional IRAs will be treated as one for tax purposes.

Roth IRAs have other benefits and downsides you need to factor into your decision, and additional rules apply to IRA conversions. Please contact us for assistance in determining whether a backdoor Roth IRA is right for you.

© 2017

Friday, May 19th, 2017

What really motivates nonprofit donors

What do charitable donors want? The classic answer is: Go ask each one individually. However, research provides some insight into donor motivation that can help your not-for-profit grow its financial support.

Taxing matters

The biennial U.S. Trust® Study of High Net Worth Philanthropy, conducted in partnership with the Indiana University Lilly Family School of Philanthropy, regularly finds that wealthy donors are primarily motivated by philanthropy. The tax benefits of giving were cited by only 18% of respondents in the 2016 survey.

On its own, your organization has little control over tax rates or deductions. But by teaming up with other nonprofits, you can exercise influence over tax policy. For example, groups such as the Charitable Giving Coalition have been credited with helping to defeat congressional challenges to the charitable deduction. Some nonprofits also partner up to influence state legislation on charitable giving incentive caps. Just keep in mind that, to preserve your nonprofit’s tax-exempt status, political lobbying should be kept to a minimum.

Matching opportunity

Other research has found that donors are just as motivated by matching gifts as they are by tax benefits. A joint Australian and American study gave supporters a choice between a tax rebate and a matching donation to charity. Donors were evenly split between the two — but those opting for the match gave more generously than those who took the rebate.

If your nonprofit hasn’t already tried offering matching gifts, it’s worth testing. You’ll need to identify donors willing to use their large gift to incentivize others — reliable supporters such as board members or trustees. Consider using their gifts during short-lived fundraisers, where a “ticking clock” lends the offer greater urgency

Other strategies can enable donors to stretch their giving dollars. For example, encourage your supporters to give appreciated stock or real estate. As long as the donors meet applicable rules, they can avoid the capital gains tax liability they’d incur if they sold the assets.

Don’t make assumptions

Donors can be motivated by many social, emotional and financial factors. So it’s important not to assume you know how your target audience will respond to certain types of fundraising appeals. Perform some basic research, asking major donors and their advisors about their philanthropic priorities. Contact us for more revenue-boosting ideas.

© 2017

Thursday, May 18th, 2017

A Few Helping Hands for Albany’s Habitat for Humanity

Members of the Albany office participated in Habitat for Humanity’s National Women Build Week on Friday, May 12th. The group included Kyle Nichols, Morgan Bishop. Becca Pettit, Hays Lacey, Bradley Abell, Blair Blackburn, and Emily Dent. The team worked on the demolition for the remodel of Flint River Habitat of Humanity’s new ReStore location. As you can see from these before and after pictures, they put in a lot of sweat and effort…a lot of sweat!

Tuesday, May 16th, 2017

Real estate investor vs. professional: Why it matters

Income and losses from investment real estate or rental property are passive by definition — unless you’re a real estate professional. Why does this matter? Passive income may be subject to the 3.8% net investment income tax (NIIT), and passive losses generally are deductible only against passive income, with the excess being carried forward.

Of course the NIIT is part of the Affordable Care Act (ACA) and might be eliminated under ACA repeal and replace legislation or tax reform legislation. But if/when such legislation will be passed and signed into law is uncertain. Even if the NIIT is eliminated, the passive loss issue will still be an important one for many taxpayers investing in real estate.

“Professional” requirements

To qualify as a real estate professional, you must annually perform:

  • More than 50% of your personal services in real property trades or businesses in which you materially participate, and
  • More than 750 hours of service in these businesses.

Each year stands on its own, and there are other nuances. (Special rules for spouses may help you meet the 750-hour test.)

Tax strategies

If you’re concerned you’ll fail either test and be subject to the 3.8% NIIT or stuck with passive losses, consider doing one of the following:

Increasing your involvement in the real estate activity. If you can pass the real estate professional tests, the activity no longer will be subject to passive activity rules.

Looking at other activities. If you have passive losses from your real estate investment, consider investing in another income-producing trade or business that will be passive to you. That way, you’ll have passive income that can absorb some or all of your passive losses.

Disposing of the activity. This generally allows you to deduct all passive losses — including any loss on disposition (subject to basis and capital loss limitations). But, again, the rules are complex.

Also be aware that the IRS frequently challenges claims of real estate professional status — and is often successful. One situation where the IRS commonly prevails is when the taxpayer didn’t keep adequate records of time spent on real estate activities.

If you’re not sure whether you qualify as a real estate professional, please contact us. We can help you make this determination and guide you on how to properly document your hours.

© 2017

Thursday, May 11th, 2017

Nonprofits: Don’t gamble with gaming fundraisers

Whether you’re planning to raise funds for your not-for-profit with a simple bingo game or raffle, or with a more elaborate casino night, you need to understand and follow the federal rules that govern these kinds of activities. Gaming activities can open the door to unexpected taxes and trigger requirements for specific IRS filings.

Filings and special taxes

If you regularly conduct a gaming activity, you may be required to report it to the IRS. For example, nonprofits that gross more than $1,000 in unrelated business income from regular gaming fundraisers may need to file Form 990-T, “Exempt Organization Business Income Tax Return.”

Your group also may be subject to a wagering excise or occupational tax, depending on:

  • The type of wagering you engage in,
  • How it’s structured, and
  • How your organization benefits from the proceeds.

Generally, this tax applies to lotteries or wagering pools that involve a sporting event or a contest that’s conducted for profit.

Winnings and withholding

Depending on the type of game and the amount won by an individual, you may also be required to report the winnings to the IRS. This applies if your fundraiser includes a single instant/pull-tab prize of $600 or more (if more than 300 times the amount of the wager), a single bingo or slot machine prize of $1,200 or more, or a single Keno prize of $1,500. You’ll need to obtain the winner’s name and Social Security number.

Regular income tax or backup withholding is necessary in some games with winnings over a certain threshold. No withholding is required for bingo prizes up to $1,200. But withholding is necessary when raffle and some other types of winnings are $600 or more. Your organization is required to pay these amounts, regardless of whether you get the withholding from the winner.

Tip of the iceberg

These are just some of the federal rules surrounding gaming. In addition, many states and municipalities impose their own regulations on gaming activities, including requiring licenses or permits. To ensure your fundraiser complies with complex IRS rules, contact us.

© 2017

Thursday, May 11th, 2017

Sleep Mats for the Homeless

 M&J’s Atlanta office has been donating bags to the “Bag Ladies” in order to make crochet bedrolls for the homeless.

The article below was retrieved from:

It’s ten o’clock on a Wednesday morning and if you listen real closely you will hear laughter and rustling of plastic shopping bags. Every Wednesday since October 2016, a group of people gather in a Smyrna home to give back to the community in a unique way. Patti Barnett, the original organizer of the “Bag Ladies” as they have named themselves, has been looking for a way to give back to her community for some time and now she has found it.

Ms. Barnett is spearheading an initiative to crochet bedrolls made out of plastic shopping bags and distribute these bedrolls to homeless individuals in the Smyrna/Marietta area. Every year, around 500 billion plastic bags are used worldwide. 500,000,000,000. Five hundred followed by nine zeros. That’s a lot of bags.

So many that over one million bags are being used every minute and they’re damaging our environment. Big numbers can be daunting so let’s put it another way…every man, woman and child on our planet uses 83 plastic bags every year. That’s one bag per person every four and half days. Of those 500 billion bags, 100 billion are consumed in the United States alone. ( These “Bag Ladies” have found a way to keep these bags out of the landfill that would otherwise go to waste.

The idea originally came from a social media post that Patti’s daughter forwarded to her mother, and now this idea has grown to include neighbors, friends, and acquaintances throughout our area. Ms. Barnett attends Hurt Road Baptist Church in Smyrna and has included many in her church in the effort. The Women’s Missionary Union (WMU) group has been the biggest driver in this initiative. Ms. Barnett says, “Making these mats is not hard to do at all. It just takes commitment.

Each mat requires about 1200 bags, but with so many people helping, it really isn’t as daunting as it sounds.” She continued, “Overall we have about 25 people helping each week on average. Even more than that as you think about the whole process. Between the collecting, sorting, folding, cutting, crocheting, and distribution, I really haven’t counted all of the participants.” In all, each mat takes approximately a week to complete and that is with someone crocheting at least 6 hours a day.

Ms. Barnett has been really surprised at times with the number of bags that have been donated, but with the help of volunteers the numbers aren’t too overwhelming. Besides the volunteers from her church, Ms. Barnett has made trips to train others how to make these mats for the homeless. She has trained a school and a church in the Covington area, and also trained a group of women at another local congregation, and two troops from the Girl Scouts of America. She has even gotten the support of some local businesses that have begun to collect bags for her to use.

Ms. Barnett says, “The biggest benefit for us is the fellowship and the sense of community we feel as we gather. It’s really been a lot of fun!” One participant said, “This is the highlight of my week, we learn a lot…like how to use Shoe Gu to fix my boots, and that yellow mustard takes away muscle cramps.” There is another lady who has said, “I can’t fold, cut, or crochet, but I can cook for those who do and bring them food as they serve others.” These ladies are driven by the Great Commandment to love God and love others and they are using their talents to make a difference in the life of someone less fortunate. So far there are 22 homeless individuals who have been blessed with a mat from the Bag Ladies, and each recipient’s name is written down and prayed over as they gather to help others. Ms. Barnett says, “We are really praying for more people to step forward who would be willing to crochet. We have plenty of bags to supply them, but not enough people actually crocheting.”

If you, or your church group, would like to find out more information regarding this project you can call the office at Hurt Road Baptist Church at 770-435-8164.

Wednesday, May 10th, 2017

Want to help your child (or grandchild) buy a home? Don’t wait!

Mortgage interest rates are still at low levels, but they likely will increase as the Fed continues to raise rates. So if you’ve been thinking about helping your child — or grandchild — buy a home, consider acting soon. There also are some favorable tax factors that will help:

0% capital gains rate. If the child is in the 10% or 15% income tax bracket, instead of giving cash to help fund a down payment, consider giving long-term appreciated assets such as stock or mutual fund shares. The child can sell the assets without incurring any federal income taxes on the gain, and you can save the taxes you’d owe if you sold the assets yourself.

As long as the assets are worth $14,000 or less (when combined with any other 2017 gifts to the child), there will be no federal gift tax consequences — thanks to the annual gift tax exclusion. Married couples can give twice that amount tax-free if they split the gift. And if you don’t mind using up some of your lifetime exemption ($5.49 million for 2017), you can give even more. Plus, there’s the possibility that the gift and estate taxes could be repealed. If that were to happen, there’d be no limit on how much you could give tax-free (for federal purposes).

Low federal interest rates. Another tax-friendly option is lending funds to the child. Now is a good time for taking this step, too. Currently, Applicable Federal Rates — the rates that can be charged on intrafamily loans without causing unwanted tax consequences — are still quite low by historical standards. But these rates have begun to rise and are also expected to continue to increase this year. So lending money to a loved one for a home purchase sooner rather than later might be a good idea.

If you choose the loan option, it’s important to put a loan agreement in writing and actually collect payment (including interest) on the loan. Otherwise the IRS could deem the loan to actually be a taxable gift. Keep in mind that you’ll have to report the interest as income. But if the interest rate is low, the tax impact should be minimal.

If you have questions about these or other tax-efficient ways to help your child or grandchild buy a home, please contact us.

© 2017

Friday, May 5th, 2017

Accountants who hunt!

M&J was a proud sponsor of the Ducks Unlimited Banquet Smyrna Chapter last night. Our guys had a great time and even scored a few pieces of artwork!