Archive for the ‘Uncategorized’ Category

Thursday, February 15th, 2018

Making the most of your nonprofit’s internal audit function

The key role of a not-for-profit’s internal auditors was once limited largely to testing financial and compliance controls and reporting their findings to the organization’s leadership. But today, with their cross-departmental perspective, internal audit staff (whether employees or outside consultants) can help anticipate and mitigate a variety of risks, improve processes — and even help evaluate your nonprofit’s strategies.

Core job

On its most basic level, the internal audit function provides independent assurance of compliance with a nonprofit’s internal controls and their effectiveness in mitigating financial and operational risk. Potential risks include fraud, insufficient funds to support programming and reputational damage.

Internal auditors start by identifying a nonprofit’s vulnerabilities and prioritizing them from high to low. Through testing and other methods, they then assess the effectiveness of internal controls. Auditors document their results in reports that include recommended improvements.

Internal auditors further evaluate compliance with laws, regulations and contracts. They follow up on management’s remediation actions to eliminate identified risks and assist external auditors, when applicable.

The effectiveness of the internal audit function hinges on auditor independence. Auditors should be independent from management and all areas they review to avoid bias or a conflict of interest. Auditors should report directly to the board of directors or its audit committee.

Expanded function

Although the internal audit function is often viewed mainly through the prism of compliance and internal controls, it has a lot to offer beyond risk assessments and audit plans. Savvy nonprofits have begun to tap internal audit for strategic purposes.

Auditors may serve as internal consultants, providing insights gathered while performing compliance and assessment work. For example, while reviewing invoices, internal auditors may discover a way to streamline invoice processing.

The internal audit function’s familiarity with the organization’s inner workings also affords it an unusual perspective for evaluating strategic opportunities. Does your nonprofit have a financial weakness that could undermine plans for continuing current programs or launching new ones? Your internal auditor probably knows the answer.

Ask for more

Increased public scrutiny of how nonprofits are governed and held accountable makes an effective internal audit function a must. But internal auditors can offer your nonprofit more than financial and compliance oversight. To ensure you’re making the most of this function, contact us.

© 2018

Tuesday, February 13th, 2018

Families with college students may save tax on their 2017 returns with one of these breaks

Whether you had a child in college (or graduate school) last year or were a student yourself, you may be eligible for some valuable tax breaks on your 2017 return. One such break that had expired December 31, 2016, was just extended under the recently passed Bipartisan Budget Act of 2018: the tuition and fees deduction.

But a couple of tax credits are also available. Tax credits can be especially valuable because they reduce taxes dollar-for-dollar; deductions reduce only the amount of income that’s taxed.

Higher education breaks 101

While multiple higher-education breaks are available, a taxpayer isn’t allowed to claim all of them. In most cases you can take only one break per student, and, for some breaks, only one per tax return. So first you need to see which breaks you’re eligible for. Then you need to determine which one will provide the greatest benefit.

Also keep in mind that you generally can’t claim deductions or credits for expenses that were paid for with distributions from tax-advantaged accounts, such as 529 plans or Coverdell Education Savings Accounts.

Credits

Two credits are available for higher education expenses:

  1. The American Opportunity credit — up to $2,500 per year per student for qualifying expenses for the first four years of postsecondary education.
  2. The Lifetime Learning credit — up to $2,000 per tax return for postsecondary education expenses, even beyond the first four years.

But income-based phaseouts apply to these credits.

If you’re eligible for the American Opportunity credit, it will likely provide the most tax savings. If you’re not, consider claiming the Lifetime Learning credit. But first determine if the tuition and fees deduction might provide more tax savings.

Deductions

Despite the dollar-for-dollar tax savings credits offer, you might be better off deducting up to $4,000 of qualified higher education tuition and fees. Because it’s an above-the-line deduction, it reduces your adjusted gross income, which could provide additional tax benefits. But income-based limits also apply to the tuition and fees deduction.

Be aware that the tuition and fees deduction was extended only through December 31, 2017. So it won’t be available on your 2018 return unless Congress extends it again or makes it permanent.

Maximizing your savings

If you don’t qualify for breaks for your child’s higher education expenses because your income is too high, your child might. Many additional rules and limits apply to the credits and deduction, however. To learn which breaks your family might be eligible for on your 2017 tax returns — and which will provide the greatest tax savings — please contact us.

© 2018

Monday, February 12th, 2018

Proud to be a sponsor of the Cobb Chamber First Monday Breakfast!

M&J was proud to sponsor the Cobb Chamber First Monday Breakfast today. Our Managing Partner, Donny Luker, spoke about the Firms 100 Years of success and how the military has played an important role within our markets and in the creation of our Firm’s culture.

Friday, February 9th, 2018

Is your employer withholding enough in taxes?

Thursday, February 8th, 2018

Is your nonprofit ready to hire new staffers?

According to the 2017 Nonprofit Employment Practices Survey by human resources consultant Nonprofit HR, charities are hiring at a faster pace than for-profit companies. Of the not-for-profits surveyed, 50% reported that they would add staffers, vs. 40% of for-profit businesses.

Yet plenty of nonprofits are still hesitating to add employees to the payroll. If your organization is on the sidelines but thinking about hiring in the near future, the following three questions can help you decide:

  1. Do you need employees? Although this may seem like an obvious question, it isn’t necessarily. Even if you plan to expand services and introduce new programs, volunteers may be capable of picking up the slack. Or current staffers may be underused on projects that are stagnating or winding down. Carefully examine your nonprofit’s priorities and consider eliminating programs that aren’t meeting expectations so that you can redeploy human resources where you need them most.
  2. Do you have the money? Many nonprofits are experiencing a rebound in financial support to prerecession levels. Even if you’re flush, the fact remains that nonprofits are obligated to be careful financial stewards. Donors, watchdog groups and the media demand it. So consider how you’ll make the most of any new staffing budget before you spend it.
  3. Is outsourcing an option? Remember that, when you hire full-time employees, the expense isn’t limited to salaries or hourly wages — you’ll also be paying for benefits. In many cases, it’s cheaper to outsource functions, particularly accounting, IT and human resources work. Outsourcing offers the additional benefit of being temporary if you aren’t happy with the vendor. Underperforming employees are much harder to let go.

These are only a few questions to ask before deciding to hire new employees. The important thing is to share the decision. Consult your organization’s managers and board members and contact us for more information.

© 2018

Wednesday, February 7th, 2018

Kristen Lord at Georgia Southern Women’s Leadership Conference

Our CFO, Kristen Lord, presented at the Georgia Southern Women’s Leadership Conference on Saturday, February 3rd. She spoke to Juniors and Seniors about transitioning from college to career, networking and mentorship. We know Kristen provided these ladies with some great guidance!

Tuesday, February 6th, 2018

M&J’s Jeff Fucito and Greg Morgan Honored at Cobb Chamber Annual Dinner Gala

Chairman Gary Bottoms & Jeff Fucito Photo Courtesy of Cobb Business Journal

Cynthia Reichard, Chairman Gary Bottoms & Greg Morgan Photo Courtesy of Cobb Business Journal

Saturday, February 3, the Cobb Chamber of Commerce hosted its 76th Annual Dinner celebration at the Cobb Galleria Centre. This black-tie affair is attended by nearly 1000 of Cobb County’s finest, and the event is intended to honor those who continue to support the community. Mauldin & Jenkins was an Emerald Sponsor and was represented by Jeff Fucito, Greg Morgan, Aleisa Howell, Jon Schultz, Bob Heuel, Tiffany Harworth and their significant others.

Jeff Fucito received the 2018 Chairman’s Award from Chairman Gary Bottoms and Greg Morgan was one of 2 recipients of the 2018 Len Gilbert Award. What a fun and memorable night!

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Monday, February 5th, 2018

2018 tax calendar

To help you make sure you don’t miss any important 2018 deadlines, we’ve provided this summary of when various tax-related forms, payments and other actions are due. Be aware that some deadlines have been moved up or pushed back compared to previous years. Please review the calendar and let us know if you have any questions about the deadlines or would like assistance in meeting them.

Date Deadline for
February 12 Individuals: Reporting January tip income, $20 or more, to employers (Form 4070).

Employers: Reporting income tax withholding and FICA taxes for fourth quarter 2017 (Form 941) and filing a 2017 return for federal unemployment taxes (Form 940), if you deposited on time and in full all of the associated taxes due.

February 15 Businesses: Providing Form 1099-B, 1099-S and certain Forms 1099-MISC (those in which payments in Box 8 or Box 14 are being reported) to recipients.

Individuals: Filing a new Form W-4 to continue exemption for another year, if you claimed exemption from federal income tax withholding in 2017.

February 28 Businesses: Filing Form 1098, Form 1099 (other than those with a January 31 or February 15 deadline) and Form W-2G and transmittal Form 1096 for interest, dividends and miscellaneous payments made during 2017. (Electronic filers can defer filing to April 2.)
March 12 Individuals: Reporting February tip income, $20 or more, to employers (Form 4070).
March 15 Calendar-year S corporations: Filing a 2017 income tax return (Form 1120S) or filing for an automatic six-month extension (Form 7004), and paying any tax due.

Calendar-year partnerships: Filing a 2017 income tax return (Form 1065 or Form 1065-B) or requesting an automatic six-month extension (Form 7004).

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Friday, February 2nd, 2018

5th Tuesday Kennesaw Business Association Luncheon

Nick Rider from our Atlanta office had the opportunity to speak at the Kennesaw Business Association Luncheon to 40 business leaders on the Tax Reform. Rider presented to local business owners of the KBA and answered questions that everyone had about how their tax situations would be impacted. He shared details on individual and business provisions of the Tax Cuts and Jobs Act of 2017.

Thursday, February 1st, 2018

How nonprofits can regain their tax-exempt status

Thousands of not-for-profits lose their tax-exempt status every year because they’ve neglected to file required annual forms with the IRS for three consecutive years. Fortunately, if your organization is on the revocation list, you can re-attain your exempt status by following the proper steps.

File the right form

Assuming you lost your exempt status due to one of these automatic revocations, you can regain your status by filing:

  • Form 1023,“Application for Recognition of Exemption Under Section 501(c)(3),” or
  • Form 1024,“Application for Recognition of Exemption Under Section 501(a).”

Unless you apply for retroactive reinstatement, all of your organization’s activities between the revocation and the reinstatement date will be considered taxable. Thus, all contributions made during that period won’t be deductible by donors.

You may apply for retroactive reinstatement, effective the date of the automatic revocation, by filing the applicable form within 15 months or the later of the date of 1) the IRS revocation letter, or 2) the date the IRS posted your organization’s name on its website.

Support your application

When you file the form, you must attach the following five items:

  1. A detailed statement that provides reasonable cause for failing to file required returns in each of the three consecutive years. It should state the facts that led to each failure and the continual failure, discovery of the failures and steps taken to avoid or mitigate them.
  2. A statement that describes safeguards put in place and steps taken to avoid future failures.
  3. Evidence to support all material aspects of those two statements.
  4. Properly completed and executed paper tax returns for all taxable years during and after the three-year period your organization failed to file.
  5. An original declaration dated and signed by an authorized person such as an officer or director. (See IRS Notice 2011-44 for the required wording.)

To expedite your application, write “AUTOMATICALLY REVOKED” on the top of the form and envelope and include the specified fee.

Make it the priority

Without your tax-exempt status, you’re likely to lose donations and other funding. So make reinstatement a top priority. Contact us for more information and help with the process.

© 2018