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Friday, March 16th, 2018

Biggest tax bill in 30+ years!

On December 22, 2017, the most sweeping tax legislation since the Tax Reform Act of 1986 was signed into law. The Tax Cuts and Jobs Act of 2017 (TCJA) makes small reductions to income tax rates for most individual tax brackets and significantly reduces the income tax rate for corporations. It also provides a large new tax deduction for owners of pass-through entities and significantly increases individual alternative minimum tax (AMT) and estate tax exemptions. And it makes major changes related to the taxation of foreign income.

It’s not all good news for taxpayers, however. The TCJA also eliminates or limits many tax breaks, and much of the tax relief is only temporary.

Click below to see an overview of some of the key changes affecting individual and business taxpayers.

Mauldin & Jenkins TCJA 2018


Thursday, March 15th, 2018

Is your nonprofit’s board providing adequate fiscal oversight?

Nonprofits don’t face the same government regulations or public scrutiny as for-profit public companies do. But that doesn’t mean your board can afford to get slack about financial governance. Donors and watchdog groups pay close attention to organizations’ Forms 990 and the media is quick to pounce on rumors of fraud in the nonprofit sector. That’s why you should regularly evaluate your board’s financial oversight (if you aren’t already doing so) and recruit new members or outside advisors with financial expertise if necessary.

Assigning responsibility

Your board needs to ensure that your nonprofit has reliable operating cash flow, avoids unnecessary risk and adheres to commonly accepted accounting policies. Start by focusing on activities that your finance and audit committees have the most direct influence on. For example, does your nonprofit have an operating reserves policy and are your reserves adequate? Does your outside auditor always issue clean reports? If not, how have auditor concerns been addressed?

If you spot negative patterns, dig deeper. In most cases, board members aren’t intentionally negligent. They may not have the time or energy that your organization’s financial governance requires or the background to successfully tackle the complex tasks they’ve been assigned.

Staffing committees

If you’re having trouble finding qualified board members to sit on financial committees, you’re not alone. But it’s important to have at least a few qualified people on your board. Good candidates can interpret financial statements and have a working knowledge of accounting principles. They should also be able to recognize nonfinancial indicators that measure the success of your mission, such as paid hours vs. volunteer hours.

Professionals such as CPAs, bankers and company controllers or CFOs usually fit the bill. But you might also look to attorneys who specialize in financial transactions or insurance professionals who have extensive risk-management experience.

Once you’ve found new board members who meet your criteria, train them on your organization’s issues. You may need to explain such concepts as the differences between restricted and unrestricted funds and accounting rules for pledges, endowments and charitable gift annuities.

Hiring an advisor

If you’re having trouble finding qualified individuals to staff your finance or audit committee, consider contracting with a CPA to act as your board’s independent advisor. A CPA can provide financial expertise and act as a liaison between your finance or audit committee and the full board or staff. Contact us for help.

© 2018

 


Tuesday, March 13th, 2018

Tax Reform Presentation

This past Thursday evening, March 8th, Merrill Lynch sponsored a seminar, where Mauldin & Jenkins’ Brian Carter presented on the topic, “Tax Reform – Tax Cuts & Jobs Act.”

The event was held in the newly- renovated Bishop Planetarium at the South Florida Museum.

Brian not only provided our guests with valuable information, but did a good job of engaging the crowd and helping answer various questions.  Afterwards, guest sampled tasty appetizers and beverages from Pier 22 and had a chance to network in a fun environment.

Here’s a few photos of the evening. Enjoy!

 


Tuesday, March 13th, 2018

Casualty losses can provide a 2017 deduction, but rules tighten for 2018

If you suffered damage to your home or personal property last year, you may be able to deduct these “casualty” losses on your 2017 federal income tax return. From 2018 through 2025, however, the Tax Cuts and Jobs Act suspends this deduction except for losses due to an event officially declared a disaster by the President.

What is a casualty? It’s a sudden, unexpected or unusual event, such as a natural disaster (hurricane, tornado, flood, earthquake, etc.), fire, accident, theft or vandalism. A casualty loss doesn’t include losses from normal wear and tear or progressive deterioration from age or termite damage.

Here are some things you should know about deducting casualty losses on your 2017 return:

When to deduct. Generally, you must deduct a casualty loss on your return for the year it occurred. However, if you have a loss from a federally declared disaster area, you may have the option to deduct the loss on an amended return for the immediately preceding tax year.

Amount of loss. Your loss is generally the lesser of 1) your adjusted basis in the property before the casualty (typically, the amount you paid for it), or 2) the decrease in fair market value of the property as a result of the casualty. This amount must be reduced by any insurance or other reimbursements you received or expect to receive. (If the property was insured, you must have filed a timely claim for reimbursement of your loss.)

$100 rule. After you’ve figured your casualty loss on personal-use property, you must reduce that loss by $100. This reduction applies to each casualty loss event during the year. It doesn’t matter how many pieces of property are involved in an event.

10% rule. You must reduce the total of all your casualty losses on personal-use property for the year by 10% of your adjusted gross income (AGI). In other words, you can deduct these losses only to the extent they exceed 10% of your AGI.

Note that special relief has been provided to certain victims of Hurricanes Harvey, Irma and Maria and California wildfires that affects some of these rules. For details on this relief or other questions about casualty losses, please contact us.

© 2018


Friday, March 9th, 2018

The CPA Exams: Vanquished By Another M&J Employee!

Congratulations to Elliot Unger in our Chattanooga office for passing all the CPA exams! After months of studying it has finally all paid off. Well done, Elliot!!

 


Wednesday, March 7th, 2018

Spring cleaning: Review your nonprofit’s programs — and possibly replace some

Has your not-for-profit’s program lineup remained unchanged for at least a couple of years? If so, consider using the tradition of spring cleaning to review your offerings. Some of your programs might be due for replacement.

Clear out the closets

Many nonprofits keep programs long after they’ve stopped working. Instead of relying on old assumptions about their effectiveness, perform new research. Start by surveying participants, members, donors, employees, volunteers and community leaders about which of your nonprofit’s programs are the most — and least — effective and why.

You may get mixed responses regarding the same program, so consider their source. Employees and volunteers who work directly with program participants are more likely to know if your current efforts are off target than is a donor who attends a fundraising event once a year.

Right tool for the job

If you don’t already have goals for each program, you need to set them. Also put in place an evaluation system with metrics that are strategic, realistic and timely. For example, a charity that provides tutoring to high school students in low-income neighborhoods might measure the program’s success by considering exam and class grades and graduation rates as well as the students’ and teachers’ feedback.

Apply several measures, including subjective ones, before deciding to cut or fund a program. Numerical data might suggest that a program isn’t worth the money spent on it, but those who benefit from the program may be so vocal about its success that eliminating it could harm your reputation.

Shiny and newer

It’s usually easier to identify obsolete programs than to decide on new ones. If one of your programs is clearly ineffective and another is wildly exceeding expectations, the decision to redeploy funds is simple.

Keep in mind that new programs can be variations of old ones, but they must better serve your basic mission, values and goals. Also, no matter how much good programs do, they can’t be successful if they overspend. For every new program, make a tight budget and stick to it. You might want to start small and, if your soft launch gets positive results, simply revise your budget.

It takes a team

Even if it’s clear to you and your staff which programs must go, some stakeholders may object to your proposals. Handle these individuals — particularly donors — with care. Let us know how we can help.

© 2018


Tuesday, March 6th, 2018

Size of charitable deductions depends on many factors

Whether you’re claiming charitable deductions on your 2017 return or planning your donations for 2018, be sure you know how much you’re allowed to deduct. Your deduction depends on more than just the actual amount you donate.

Type of gift

One of the biggest factors affecting your deduction is what you give:

Cash. You may deduct 100% gifts made by check, credit card or payroll deduction.

Ordinary-income property. For stocks and bonds held one year or less, inventory, and property subject to depreciation recapture, you generally may deduct only the lesser of fair market value or your tax basis.

Long-term capital gains property. You may deduct the current fair market value of appreciated stocks and bonds held for more than one year.

Tangible personal property. Your deduction depends on the situation:

  • If the property isn’t related to the charity’s tax-exempt function (such as a painting donated for a charity auction), your deduction is limited to your basis.
  • If the property is related to the charity’s tax-exempt function (such as a painting donated to a museum for its collection), you can deduct the fair market value.

Vehicle. Unless the vehicle is being used by the charity, you generally may deduct only the amount the charity receives when it sells the vehicle.

Use of property. Examples include use of a vacation home and a loan of artwork. Generally, you receive no deduction because it isn’t considered a completed gift.

Services. You may deduct only your out-of-pocket expenses, not the fair market value of your services. You can deduct 14 cents per charitable mile driven.

Other factors

First, you’ll benefit from the charitable deduction only if you itemize deductions rather than claim the standard deduction. Also, your annual charitable donation deductions may be reduced if they exceed certain income-based limits.

In addition, your deduction generally must be reduced by the value of any benefit received from the charity. Finally, various substantiation requirements apply, and the charity must be eligible to receive tax-deductible contributions.

2018 planning

While December’s Tax Cuts and Jobs Act (TCJA) preserves the charitable deduction, it temporarily makes itemizing less attractive for many taxpayers, reducing the tax benefits of charitable giving for them.

Itemizing saves tax only if itemized deductions exceed the standard deduction. For 2018 through 2025, the TCJA nearly doubles the standard deduction — plus, it limits or eliminates some common itemized deductions. As a result, you may no longer have enough itemized deductions to exceed the standard deduction, in which case your charitable donations won’t save you tax.

You might be able to preserve your charitable deduction by “bunching” donations into alternating years, so that you’ll exceed the standard deduction and can claim a charitable deduction (and other itemized deductions) every other year.

Let us know if you have questions about how much you can deduct on your 2017 return or what your charitable giving strategy should be going forward, in light of the TCJA.

© 2018


Monday, March 5th, 2018

MJ’s Summer Leadership Program (SLP)

SLP Invite

We’re gearing up for our Summer Leadership Program! If you’re a student and are interested in attending, click here to submit your resume.  M&J’s Leadership Conference aims to help students learn more about M&J, leadership and the accounting profession!

Deadline to apply is March 30th.

To qualify, you must have a 3.0 Accounting GPA or higher.

 


Friday, March 2nd, 2018

Donny Luker at USC’s BAP

Managing Partner, Donny Luker, presented to University of South Carolina’s Beta Alpha Psi on Tuesday, March 27th. Everyone enjoyed hearing Donny speak on the panel topic of “What is there besides Audit & Tax?” Way to go Donny!

Donny at USC


Wednesday, February 28th, 2018

It’s time for nonprofits to embrace the cloud

Cloud computing promises lower technology costs and greater efficiency and productivity. Yet many nonprofits have yet to move to the cloud, possibly because their staffs are smaller and their IT expertise is limited. Fortunately, cloud computing is a simple concept that’s easy to adopt.

Remote control

Cloud computing, also known as “software as a service,” uses a network of remote third-party servers made available online. Rather than relying on your organization’s own computers or server, you remotely share software and storage to process, manage and share information.

For many nonprofits, the greatest advantage of using cloud services is lower costs. The technology generally eliminates pricey contracts and per-user licensing fees. Instead, cloud customers pay a monthly subscription fee or are billed based on actual usage. What’s more, service providers update their offerings and provide security patches on an ongoing basis.

Another benefit is the scalability of cloud services. You can scale up when you need more storage or data capacity and scale back when you need less. Also, because cloud services aren’t limited to a physical location and can be accessed from anywhere, they make it easy for colleagues, board members and volunteers to collaborate on projects. Finally, cloud services can make it easier to track and report funds over multiple time periods and to analyze budgets, expenses and cash flows. They can also produce specialized data reports.

Rest assured

Most reputable services boast stronger security, including firewalls, authorization restrictions and data encryption, than your own nonprofit could afford to put in place on its own. And cloud services typically offer continuous data backup and disaster recovery capabilities.

That said, your nonprofit can’t possibly have as much control over a cloud system as it would of its own infrastructure. So if control is a priority, you need to weigh it against the benefits of cloud computing.

Vendor options

You’ll want to look for a service that:

  • Frequently updates features,
  • Immediately responds to security threats,
  • Protects the privacy of your data, and
  • Backs up data in multiple locations.

Cost is another major consideration when selecting a vendor. But your nonprofit may qualify for discounts or even gratis services.

Get satisfaction

Before leaping into the cloud, be sure to research your options and get recommendations from other nonprofits and from IT experts. Contact us for help finding a cost-effective cloud provider.

© 2018