We believe in creating a strong working relationship with our clients to determine their specific accounting and compliance needs.

Assistance with 501(c)(3) Tax Exemption Filings

 

 

 

 

 

By: Shannon Robinson, CPA, Senior Assistant Accountant 

We have been helping a number of clients with their 501 (c) (3) tax exemption filings. There are several bases to cover and items to attach to the application so we thought we would blog about the specifics to keep you better informed.

The form / application to be completed for this filing is IRS Form 1023.  We suggest that if your organization does not already have some items such as the articles of organization and bylaws that you work with an attorney on these prior to completing the application.

Also, if your organization expects gross receipts to be less than $50,000 in the next three years and you do not have total assets in excess of $250,000 you may be eligible to file form 1023-EZ which is a much simpler form that can be completed online and can be approved within days.  There is a form 1023-EZ eligibility worksheet to determine if you meet the requirements to file the EZ form.

Below is a selection of items from the list that are needed to complete the application process:

  • Application
    • Form 1023 Checklist
    • Application (Form 1023 and Schedules A through H, as required)
    • Articles of organization
    • Amendments to articles or organization in chronological order
    • Bylaws or other rules of operation and amendments
  • User fee payment
  • Employer Identification Number (EIN)
  • Completed parts I through XI of the application, including any requested information and any required schedules A through H.
    • Must provide specific details about your past, present, and planned activities.
    • Describe your purposes and proposed activities in specific easily understood terms.
    • Financial information should correspond with proposed activities.
  • An exact copy of your complete articles of organization.
  • Signature of an officer, director, trustee, or other official who is authorized to sign

H&M can sit down with you and go over this list to get you started. We are also available to answer any questions you have during the process.  Then once you have all of the necessary information gathered,  we will sit down with you and do a final review to make sure all documentation appears to be in line before you submit your application for approval.  Once filed, the approval of the application could take 2 to 6 months.

H&M’s Stephen Smith Contributes to E-Book Focused on Assisting Small Business Owners

FOR IMMEDIATE RELEASE

Holbrook & Manter, CPAs Professional Services Firm with offices in Columbus, Dublin, Marion and Marysville is proud to announce that Stephen Smith, CPA, CGMA, MBA, CVA recently served as an expert source for an E-Book published on www.AccountingWEB.com

Written by Deanna C. White, the E-Book is entitled, “What Your Clients Really Want” and is designed to educate those in the accounting profession about the ever-changing needs of the small business owner. Stephen’s experience in this area positioned him to serve as a source that is sited heavily throughout the publication. His quotes help bring the topics of compliance, cash flow, technology and more to life throughout the E-Book, which can be downloaded at this link:

https://www.accountingweb.com/resources/what-your-clients-really-want

As stated on their website: AccountingWEB is the leading online community for CPAs in the United States, providing news, software tools and guidance from top industry voices. We aim to inspire the modern accountant to embrace new ideas, develop, grow and make changes that matter.

Holbrook & Manter, CPAs is a professional services firm specializing in family and closely held businesses. Since its origination in 1919, H&M has been dedicated to providing superior accounting, tax and management consulting advice to both businesses and individuals. Holbrook & Manter, CPAs provides cost effective, high quality technical service combined with sound personal attention. They are able to serve clients in virtually all areas of business, including those that require specialized expertise.

H&M is a member of Allinial Global, an association of legally independent accounting and consulting firms who share education, marketing resources and technical knowledge in a wide range of industries.

Please visit the following sites to learn more about our service offerings and areas of expertise:

www.HolbrookManter.com

www.BusinessAccountingServicesOhio.com

www.SOCAuditServices.com

For press inquiries, please contact:

Molly Pensyl, Business Development Manager

MPensyl@HolbrookManter.com

 

Be Prepared for the New Overtime Rule

The final overtime rule goes into effect on December 1, 2016. All employers should be aware of the specifics of the new rule and preparations for these changes should be well underway. We continue to field questions on this topic and turned to our firm’s Senior Administrative Manager, Sherry Keller to share more specifics on this very important topic. Here is what Sherry has to say:

What is overtime?

Unless specifically exempted, employees covered by the FLSA must receive pay for hours worked in excess of 40 hours in a workweek at a rate not less than one and one-half their regular rate of pay.

What determines if an employee falls within one of the white collar exemptions?

1. Be salaried (meaning that they are paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed.

2.  Be paid more than a specified salary level , which is $913 per week (equivalent of $47,476 annually)

3.  Primarily perform executive, administrative or professional duties (as defined  in the Department’s “duties test”)

What are the significant changes to the overtime regulations for white collared salaried workers?

For the first time, employers will be able to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the standard salary level, provided these payments are made on a quarterly or more frequent basis

How will employers implement the updated salary level requirement established in the final rule?

Employer have a range of options for responding to the updated standard salary level.  For each affected employee newly entitled to overtime pay, employers may:

  • Increase salary of an employee who meets the duties test to at least the new salary level  to retain his or her exempt status;
  • Pay an overtime premium of one and a half times the employee’s regular rate of pay for any overtime hours worked (over 40 hours within one work week)
  • Reduce or eliminate overtime hours
  • Reduce the amount of any pay allocated to base salary (provided that the employee still earns at least the applicable hourly minimum wage) and add pay to account for overtime hours worked over 40 in the workweek, to hold total weekly pay constant
  • Or use a combination of these responses.

Please contact Holbrook & Manter today with any questions you may have. It would be our pleasure to help you prepare ahead of the new rule taking effect. You can also find more information on the U.S. Department of labor website by clicking here: https://www.dol.gov/featured/overtime

Sherry Keller, H&M Senior Administrative Manager 

 

 

H&M a Registered PCAOB Firm

Holbrook & Manter, CPAs is proud to have become a registered firm with the Public Company Accounting Oversight Board (PCAOB).

As stated on their website: The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and the public interest by promoting informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers, including compliance reports filed pursuant to federal securities laws, to promote investor protection.

The PCAOB is directed by the Sarbanes-Oxley Act of 2002 to establish auditing and related professional practice standards for registered public accounting firms to follow in the preparation and issuance of audit reports. The PCAOB establishes auditing and related professional practice standards for registered public accounting firms to follow in preparation and issuance of audit reports.

Holbrook & Manter, CPAs is a professional services firm specializing in family and closely held businesses. Since its origination in 1919, H&M has been dedicated to providing superior accounting, tax, audit and management consulting advice to both businesses and individuals.  Holbrook & Manter, CPAs provides cost effective, high quality technical service combined with sound personal attention. They are able to serve clients in virtually all areas of business, including those that require specialized expertise. H&M is a member of Allinial Global, an association of legally independent accounting and consulting firms who share education, marketing resources, and technical knowledge in a wide range of industries.

Accounting Basics: For-Profit vs. Not-For-Profit

By: William Bauder, CPA, CGMA, CITP, Manager of Assurance and Advisory Services 

There are many consistencies between accounting in a for-profit organization and accounting in a not-for-profit organization; however, there are some nuances as well. Let’s take a look at a few of them.

First, let’s tackle the terminology.  In the for-profit world, accountants are looking at a complete set of financial statements including a balance sheet and a P&L, or income statement, and the statement of cash flows.  In a not-for-profit’s complete set of financial statements these items are still present, however the balance sheet is now called the statement of net assets, the P&L is called the statement of changes in net assets, and the cash flow remains the same.

In the nonprofit world, we aren’t dealing with equity or retained earnings, instead there are net assets.  These are currently segregated between three possible classifications: unrestricted, temporarily restricted, or permanently restricted.   Nonprofits are also required to disclose their expenses across functional category; those being management and general, program, or fundraising.  Often times an expense can be allocated to multiple functional categories, therefore, it is quite common for management to allocate these expenses based upon some allocation method, for example payroll hours, or square footage.

While most people think that all operations of a not-for-profit are tax free, that is not necessarily the case.  Something known as unrelated business income tax could cause a non-profit to actually pay taxes.  For example, say your organization is an Association for a business trade, and you own your own building.  Say, your Association has more space than it needs, so, it rents out a portion of the building to a small business, say a coffee shop.  The Association is now earning revenues for renting space, which is not align with the exempt purpose of the information, therefore, those revenues (allowable to be offset by certain expenses) are subject to federal income tax.

This gives just a glimpse into the ways the for-profit and not-for-profit worlds differ in the ways of handling finances. For more information on the ways Holbrook & Manter can help your nonprofit achieve your mission, contact us today.

Important Summer/Fall Tax Deadlines

Many important deadlines are approaching in the third quarter. Here is a list

July 15 — If the monthly deposit rule applies, employers must deposit the tax for payments in June for Social Security, Medicare, withheld income tax, and nonpayroll withholding.

August 1 — If you have employees, a federal unemployment tax (FUTA) deposit is due if the FUTA liability through June exceeds $500.

The second quarter Form 941 (“Employer’s Quarterly Federal Tax Return”) is also due today. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until August 10 to file the return.

August 15 — If the monthly deposit rule applies, employers must deposit the tax for payments in July for Social Security, Medicare, withheld income tax, and nonpayroll withholding.

September 15 — Third quarter estimated tax payments are due for individuals, trusts, and calendar-year corporations.

  • If a five-month extension was obtained, partnerships should file their 2015 Form 1065 by this date.
  • If a six-month extension was obtained, calendar-year corporations should file their 2015 income tax returns by this date.
  • If the monthly deposit rule applies, employers must deposit the tax for payments in August for Social Security, Medicare, withheld income tax, and nonpayroll withholding.

For assistance with all of your tax needs, please contact Holbrook & Manter today. We would be happy to assist you.

New Rules for Revenue Recognition for Manufacturers

Changes are on the horizon regarding the rules used to determine when revenue from agreements with customers for goods and services is recognized for financial statement purposes.

H&M works with many manufacturing clients and it is important to us to keep you up up-to-date on important industry information. The Tax Adviser does a nice job of explaining these changes. We encourage you to visit the link below to read their write-up. Please contact us with any questions you may have. We would be happy to assist you.

 http://www.thetaxadviser.com/issues/2016/jun/evolving-revenue-recognition-issues-manufacturers.html?utm_source=mnl:cpald&utm_medium=email&utm_campaign=21Jun2016

Juggling Family Wealth Management

Preserving and managing family wealth requires addressing a number of major issues. These include saving for your children’s education and funding your own retirement. Juggling these competing demands is no trick. Rather, it requires a carefully devised and maintained family wealth management plan.

Start with the basics

First, a good estate plan can help ensure that, in the event of your death, your children will be taken care of and, if your estate is large, that they won’t lose a substantial portion of their inheritances to estate taxes. It can also guarantee that your assets will be passed along to your heirs according to your wishes.

Second, life insurance is essential. The right coverage can provide the liquidity needed to repay debts, support your children and others who depend on you financially, and pay estate taxes.

Prepare for the challenge

Most families face two long-term wealth management challenges: funding retirement and paying for college education. While both issues can be daunting, don’t sacrifice saving for your own retirement to finance your child’s education. Scholarships, grants, loans and work-study may help pay for college — but only you can fund your retirement.

Uncle Sam has provided several education incentives that are worth checking out, including tax credits and deductions for qualifying expenses and tax-advantaged savings opportunities such as 529 plans and Education Savings Accounts (ESAs). Because of income limits and phaseouts, many higher-income families won’t benefit from some of these tax breaks. But, your children (or your parents, in the case of contributing to an ESA) may be able to take advantage of them.

Give assets wisely

Giving money, investments or other assets to your children or other family members can save future income tax and be a sound estate planning strategy as well. You can currently give up to $14,000 per year per individual ($28,000 if married) without incurring gift tax or using your lifetime gift tax exemption. Depending on the number of children and grandchildren you have, and how many years you continue this gifting program, it can really add up.

By gifting assets that produce income or that you expect to appreciate, you not only remove assets from your taxable estate, but also shift income and future appreciation to people who may be in lower tax brackets.

Also consider using trusts to facilitate your gifting plan. The benefit of trusts is that they can ensure funds are used in the manner you intended and can protect the assets from your loved ones’ creditors.

Overcome the complexities

Creating a comprehensive plan for family wealth management and following through with it may not be simple — but you owe it to yourself and your family. Holbrook & Manter can help you overcome the complexities and manage your tax burden. Contact us for more information.

Brian Ravencraft’s Latest Article in Ohio’s Country Journal

H&M’s Brian Ravencraft continues to contribute a monthly article to Ohio’s Country Journal, the state’s premier agribusiness publication.

His latest article shares the top signs that agribusiness professionals should be on the look out for as indicators that it is time to consider working with an accountant.

Read his tips here:

http://ocj.com/2016/06/when-to-call-an-accountant-know-the-signs/