Friday, June 22nd, 2018

What employers should know about National Medical Support Notices

An employer may occasionally receive a National Medical Support Notice (NMSN). If this ever happens to your organization, here’s what you should know.

What is it?

An NMSN is a medical child support order used by a state child support enforcement agency to obtain employer-provided group health coverage for a child. If appropriately completed, an NMSN is deemed to be a qualified medical child support order (QMCSO), and benefits must be provided in accordance with its terms.

NMSNs follow a standard format consisting of two parts: Part A, the “Notice to Withhold for Health Care Coverage,” is directed to you, the employer, while Part B, the “Medical Support Notice to Plan Administrator,” directs the plan administrator to enroll the child in specified plans.

What should you do?

Within 20 business days after the date of the NMSN (sooner if reasonable), you must provide certain information to the issuing agency or the plan administrator. To satisfy this requirement, first determine whether one of the following applies:

  • Your organization doesn’t maintain (or contribute to) a plan providing dependent coverage.
  • The employee named in the NMSN is among a class of employees (for example, part-time) that’s ineligible for dependent coverage.
  • The employee’s wages aren’t high enough to cover the cost of dependent coverage.
  • The named individual isn’t an employee of your organization.

If one or more of those conditions apply, you must specify the applicable condition on Part A and return it to the issuing agency within the 20-day period. In such cases, you won’t need to take any further action. Otherwise, you need to, within the 20-day period, send Part B to the plan administrator of each group health plan for which the child may be eligible for enrollment.

What will your plan administrator do?

A plan administrator that receives an NMSN must, within 40 business days after the date of the NMSN (sooner, if reasonable):

  • Review it,
  • Determine whether it’s appropriately completed, and
  • Notify the issuing agency of its determination on Part B.

If the plan administrator determines the NMSN was improperly completed, the plan administrator must indicate why the NMSN is deficient and notify the employee, custodial parent and alternate recipient of the deficiencies.

If the NMSN was properly completed, the plan administrator must treat it as a QMCSO and indicate when the child’s plan coverage will begin. The plan administrator must also inform you that enrollment is proceeding pursuant to the NMSN and provide information that will enable you to determine whether the contributions for the coverage can be withheld from the employee’s wages.

Are there any other potential compliance issues?

Yes. For instance, if federal or state consumer credit-protection limits would prevent you from withholding the necessary contributions, you must notify the issuing agency. Also, an NMSN may cover a child of a terminated employee, even if the employee has elected self-only COBRA coverage. And, finally, special HIPAA privacy considerations may apply. For more information, contact us.

© 2018

Thursday, June 21st, 2018

Should your nonprofit hold virtual board meetings?

Your not-for-profit’s board of directors meetings don’t always need to be performed up-close and personal in the same room. Many organizations hold virtual board meetings via phone and with Web-based applications.

Participation may improve

It can be difficult to secure full board meeting attendance, but going virtual might allow members to attend meetings they otherwise couldn’t. And virtual attendance can make board participation more attractive to potential members. Knowing they won’t be expected to show up in person at every meeting may make busy candidates more likely to commit their time.

Of course, virtual meetings aren’t without obstacles. In teleconferences, participants won’t be able to read each other’s facial expressions and body language. Even in videoconferences, participants may be unable to observe these cues as easily as they could in person. This can potentially lead to misunderstandings or conflicts.

The chair might find it difficult to shepherd discussion, especially with larger boards. Confidentiality is a concern, too. You must be able to trust that the board members are alone in their remote locations and that no outsiders are privy to the discussions.

Preparation is key

Virtual board meetings require extensive preparation, particularly for the inaugural meeting. Don’t spring a virtual meeting on board members without first conducting and sharing research, discussing the implications of such a change at an in-person meeting.

It’s up to your nonprofit’s staff to ensure that everyone has the necessary equipment. Test the system ahead of time to ensure it works as needed and establish backup plans in the event of technological failures. Staff should also send board members any supporting materials well in advance of meetings and consider making them available online during the event.

Recognize that voting on any issue will need to be verbal and not anonymous, with each board member identifying himself or herself. Also, certain issues are better suited to virtual discussion than others. Virtual meetings generally work best for straightforward discussions with no controversy — for example, updates from development staff or the formal approval of a policy.

State laws may apply

Don’t switch to virtual meetings without checking applicable state laws for nonprofit board meeting requirements. Some states, for example, allow teleconferencing but not videoconferencing. And amend your bylaws to permit virtual meetings before holding them.

© 2018

Wednesday, June 20th, 2018

Consider the tax advantages of investing in qualified small business stock

While the Tax Cuts and Jobs Act (TCJA) reduced most ordinary-income tax rates for individuals, it didn’t change long-term capital gains rates. They remain at 0%, 15% and 20%.

The 0% rate generally applies to taxpayers in the bottom two ordinary-income tax brackets (now 10% and 12%), but you no longer have to be in the top ordinary-income tax bracket (now 37%) to be subject to the top long-term capital gains rate of 20%. Many taxpayers in the 35% tax bracket also will be subject to the 20% rate.

So finding ways to defer or minimize taxes on investments is still important. One way to do that — and diversify your portfolio, too — is to invest in qualified small business (QSB) stock.

QSB defined

To be a QSB, a business must be a C corporation engaged in an active trade or business and must not have assets that exceed $50 million when you purchase the shares.

The corporation must be a QSB on the date the stock is issued and during substantially all the time you own the shares. If, however, the corporation’s assets exceed the $50 million threshold while you’re holding the shares, it won’t cause QSB status to be lost in relation to your shares.

2 tax advantages

QSBs offer investors two valuable tax advantages:

1. Up to a 100% exclusion of gain. Generally, taxpayers selling QSB stock are allowed to exclude a portion of their gain if they’ve held the stock for more than five years. The amount of the exclusion depends on the acquisition date. The exclusion is 100% for stock acquired on or after Sept. 28, 2010. So if you purchase QSB stock in 2018, you can enjoy a 100% exclusion if you hold it until sometime in 2023. (The specific date, of course, depends on the date you purchase the stock.)

2. Tax-free gain rollovers. If you don’t want to hold the QSB stock for five years, you still have the opportunity to enjoy a tax benefit: Within 60 days of selling the stock, you can buy other QSB stock with the proceeds and defer the tax on your gain until you dispose of the new stock. The rolled-over gain reduces your basis in the new stock. For determining long-term capital gains treatment, the new stock’s holding period includes the holding period of the stock you sold.

More to think about

Additional requirements and limits apply to these breaks. For example, there are many types of business that don’t qualify as QSBs, ranging from various professional fields to financial services to hospitality and more.

Before investing, it’s important to also consider nontax factors, such as your risk tolerance, time horizon and overall investment goals. Contact us to learn more about QSB stock.

© 2018

Tuesday, June 19th, 2018

M&J Hosts Field Day for Boys & Girls Club!

This past Friday, Mauldin & Jenkins’ Atlanta office hosted a summer cookout and field day for the James T. Anderson Boys and Girls Club in Marietta, GA. Nearly 150 children ranging in ages from 6 to 18 years old, showed up for a day full of games, face painting, and hot dogs and hamburgers!

M&J staffed manned 18 different game stations including ring toss, bowling, football toss, parachute, corn hole, limbo, water balloon toss and many more!

“The kids were particularly into the water balloon toss,” said Matt Orr, an M&J staff volunteer. “What started as a tame water balloon toss, quickly turned into a full-on water balloon battle, kids vs. M&J! It was a ton of fun, but we all got SOAKED!”

The tug-of-war even brought out a little “friendly competition” amongst the M&J staff!

A HUGE THANKS to all the volunteers for spending their Friday sweating their faces off and making fun memories for these great kids! Also, a huge thanks to Katie Smith, Atlanta’s Community Service Coordinator, for organizing this fun-filled event!



Thursday, June 14th, 2018

Make the most of your fundraising with simple metrics

The amount of money your not-for-profit raises in fundraising campaigns is meaningful, but so is how efficiently you’re able to raise it. Such costs can be measured using two metrics: Cost ratio and return on investment (ROI). Let’s take a look.

Find a formula

These two metrics can be used to evaluate both fundraising activities as a whole and individual fundraising events or campaigns. Concentrating not only on the big picture, but also on specific fundraising activities, allows your organization to identify stronger strategies to use more frequently and weaker ones to consider improving or ending. Ultimately, the goal is to determine which activities generate the highest return.

Cost ratio (also known as cost-per-dollar, which is fundraising expense / fundraising revenue) focuses on the expense of fundraising, while ROI focuses on the returns. The formula for ROI uses the same inputs as cost ratio but flips them; the fundraising expense, of course, is the “investment” ROI is referring to:

ROI = Fundraising revenue / Investment in fundraising

Some nonprofits use gross revenues in the ROI formula. However, many others use net revenues (revenues minus the related expenses). Either option is acceptable, but you must be consistent and measure revenues the same way for every year and campaign. After all, these metrics are meaningful only when you compare fundraising activities or trends from one year to prior years.

Calculate inputs

Fundraising expense data should include the direct costs of the initial effort, as well as later activities. Initial costs might include an investment in online advertising or a phone campaign, while subsequent costs might relate to maintaining that relationship, such as a renewal mailing.

As for indirect and overhead costs, exclude those that you would incur with or without the monitored activity (such as website or donor database costs). And make sure they’re excluded from every campaign metric. For both costs and revenues, use rolling averages that cover three to five years. This will reduce the effect of “one-offs,” whether in the form of a significant donation or an economic downturn. You’ll also avoid penalizing fundraising activities, such as a major gift campaign, that require some time to show results.

Allocate resources

Calculating fundraising metrics will help you make better decisions when it comes to allocating limited resources. But keep in mind that ROI can vary greatly by activity, and a lower ROI doesn’t necessarily mean you should cut the activity. Contact us for more information.

© 2018

Wednesday, June 13th, 2018

All Work and No Play, Makes Dull CPAs

Mauldin & Jenkins’ AuditWatch In-House Training is in full swing and after a day of audit presentations, the attendees were in much need of some fun! Last night, the group enjoyed a night out at Suntrust Park. Plenty of peanuts, cracker jacks, and “chopping” for the Braves!

Freddie Freeman belted his 13th homer and Ozzie Albies launched a grand slam to cap off a six-run 6th to beat the Mets, 8-2!


Wednesday, June 13th, 2018

The tax impact of the TCJA on estate planning

The massive changes the Tax Cuts and Jobs Act (TCJA) made to income taxes have garnered the most attention. But the new law also made major changes to gift and estate taxes. While the TCJA didn’t repeal these taxes, it did significantly reduce the number of taxpayers who’ll be subject to them, at least for the next several years. Nevertheless, factoring taxes into your estate planning is still important.

Exemption increases

The TCJA more than doubles the combined gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption, from $5.49 million for 2017 to $11.18 million for 2018.

This amount will continue to be annually adjusted for inflation through 2025. Absent further congressional action, however, the exemptions will revert to their 2017 levels (adjusted for inflation) for 2026 and beyond.

The rate for all three taxes remains at 40% — only three percentage points higher than the top income tax rate.

The impact

Even before the TCJA, the vast majority of taxpayers didn’t have to worry about federal gift and estate taxes. While the TCJA protects even more taxpayers from these taxes, those with estates in the roughly $6 million to $11 million range (twice that for married couples) still need to keep potential post-2025 estate tax liability in mind in their estate planning. Although their estates would escape estate taxes if they were to die while the doubled exemption is in effect, they could face such taxes if they live beyond 2025.

Any taxpayer who could be subject to gift and estate taxes after 2025 may want to consider making gifts now to take advantage of the higher exemptions while they’re available.

Factoring taxes into your estate planning is also still important if you live in a state with an estate tax. Even before the TCJA, many states imposed estate tax at a lower threshold than the federal government did. Now the differences in some states will be even greater.

Finally, income tax planning, which became more important in estate planning back when exemptions rose to $5 million more than 15 years ago, is now an even more important part of estate planning.

For example, holding assets until death may be advantageous if estate taxes aren’t a concern. When you give away an appreciated asset, the recipient takes over your tax basis in the asset, triggering capital gains tax should he or she turn around and sell it. When an appreciated asset is inherited, on the other hand, the recipient’s basis is “stepped up” to the asset’s fair market value on the date of death, erasing the built-in capital gain. So retaining appreciating assets until death can save significant income tax.

Review your estate plan

Whether or not you need to be concerned about federal gift and estate taxes, having an estate plan in place and reviewing it regularly is important. Contact us to discuss the potential tax impact of the TCJA on your estate plan.

© 2018

Tuesday, June 12th, 2018

Albany Office’s Spring Fling

M&J’s Albany office celebrated Spring Fling with a Field Day! Wynfield Plantation was the perfect setting for a sunny day spent with co-workers, friends, and families.

“We had 4 teams participate in several events including frisbee toss, a hula hoop competition, a shoe kick contest, egg relay, egg toss, and tug of war,” said Ryan Inlow, Albany’s Partner-in-Charge.  “It was pretty intense!

Friday, June 8th, 2018

M&J’s Macon Office Awarded Top 100 Most Generous Workplaces

Congratulations to our Macon office for receiving a Top 100 Most Generous Workplaces award through the United Way of Central Georgia! This Top 100 listing includes philanthropic contributions from organizations and their employees to the United Way workforce campaign.

Pictured (L to R): Lisa Berrian with United Way, Meredith Lipson and Benita

Friday, June 8th, 2018

5 ways to show your commitment to workplace safety

Workplace safety is more than just the law; it makes good business sense. A safe workplace enables well-trained, motivated employees to stay on the job and be productive. In turn, this helps their employer operate more cost-effectively.

Of course, in the day-to-day grind of getting their work done, employees can lose sight of safety — and this is often when accidents happen. Here are five ways you can show your commitment to workplace safety:

1. Ensure compliance. As you likely know, the Occupational Safety and Health Administration (OSHA) is the federal agency that enforces workplace safety regulations. The absolute minimum any employer should do is follow these regulations. Don’t let compliance slip over time.

2. Let everyone know. Put required OSHA workplace posters in a visible place for all to read. Doing so will alert everyone that you “play by the book.” Employees are more likely to follow safety rules when they know their employer is fully cognizant of regulatory compliance.

3. Go beyond the bare minimum. Complying with OSHA regs will help you avoid fines, but it may not fully protect you from costly accidents. Take it to the next level by developing a companywide safety program with buy-in from supervisors and employees. Delegate responsibilities for each part of the program, which should include:

  • Analyzing the worksite to flag potential hazards and eliminating them where possible,
  • Instituting systems and processes to prevent accidents or illnesses where hazards can’t be eliminated,
  • Training supervisors and employees on specific materials and equipment they use,
  • Documenting your safety-related activities, and
  • Keeping detailed records about injuries or illnesses to track trends.

When the program is fully developed, you’ll need to effectively communicate it to your supervisors and employees. Consider holding an introductory meeting followed by a series of department-specific training sessions.

4. Craft a safety mission statement. Enhance your companywide safety program by writing and periodically updating a safety and health mission statement. Seek guidance from your HR department and attorney regarding the optimal language. Post the mission statement in visible places throughout your workplace and distribute it via email as well. You could even share it with customers and vendors.

5. Walk the walk. Ensure that your organization’s leadership — from executives to middle management — complies with all regulatory and internal safety regulations and policies. Making exceptions signals to workers that they need to follow rules only when convenient.

We can provide your organization’s leaders with further information and ideas on workplace safety.

© 2018