kathy-beck – Page 15 – Beck & Company

Top 8 Reasons To Take Your Nonprofit Budget To The Cloud

Do you pull your hair out at board meetings trying to read the tiny print on an overpopulated excel spreadsheet? Do you dread the line item on the agenda dedicated to budget? You are not alone – many board members find this task frustrating as they try to make sense of poorly managed Quickbooks reports and line items that just don’t always make sense. It can be difficult to even discern if a budgeted line item is actually financially healthy for a nonprofit. These types of budgets fail to be useful as an ongoing solution.

While it may be frustrating it is required by the U.S. government to keep an approved annual budget on file. And, that budget must then be reviewed at monthly board meetings. Although it may feel like the rule exists to frustrate and confuse you it is not. Having a working, well developed and managed budget provides tons of important values to your nonprofit – particularly when the budget process is simple and user friendly.

If you’re like most nonprofits the members of your board are successful and busy people. They believe in your organization and want to contribute their unique skills to help you accomplish your mission. Imagine the possibilities if those same people could review the budget on an ongoing basis online? They could be empowered to…

Analyze predictions and compare them to actual costs.
Show up to meetings with ideas for improvement.
Spend time on the cause at hand rather than trying to decipher code.

Let’s face it – who wants to spend their precious time looking backwards when you can take steps forward? This is all possible with the right tools and using software designed to help you budget with ease is a great place to start.

Although there are many great online budgeting tools available one solution we have found extremely useful for nonprofits is Adaptive Insights. This cloud software makes it easy to move beyond the spreadsheet nightmare without the cost and complexity associated with traditional applications.

There are multiple benefits we have seen from customers using cloud budgeting software. Below are the top 8 that we wanted to highlight:

Dramatically reduce budgeting and forecasting cycle times-by up to 90%
Simplify and standardize data collection across the organization
Decrease errors and improve accuracy by eliminating broken links and formulas
Deliver more complete and frequent forecasts, including rolling forecasts
Enable timely and thorough what-if analysis
Establish one version of the truth
Make faster, more informed decisions
Enhance collaboration with, and ownership by, department managers

When a person decides to support your business with their hard earned money they most certainly want to know where that money is going. People don’t part with their cash carelessly. Your donors give because they believe in the cause. Being able to show them that their donations served a worthy purpose is essential. When you have a good budgeting tool that is easy to use and organize, finding this information is easy and makes board meetings so much more productive.

We know that implementing new budgeting software can be difficult. At Beck & Company, Certified Public Accountants and Business Advisors, we are an accounting and consulting firm delivering specialized expertise, creative thinking, and unsurpassed service to ensure that our clients’ financial endeavors flourish. We want to see you spend your time where your time is most valuable, working towards the vision and mission of your NPO. Let us help you manage your budgeting process so you don’t have to. If your organization is looking for ways to improve your accounting functions and reduce the time you spend managing your back-office, our nonprofit client accounting services may be the answer. Contact us today for a free consultation and see how we can help you reach your goals.

A Closer Look at Healthcare Reform Guidance for Small Businesses

Over the past two weeks, we have been taking a look at an overview of the ever-developing new health care laws and how they impact small businesses. We looked at past guidelines, upcoming deadlines, and options small business employers have when it comes to providing health care coverage. We also examined three reimbursement methods for small business employers that give them choices in terms of how they will provide their employees with coverage options. For more information, visit here.

There is so much background knowledge needed to understand all of this that we thought it would be beneficial to dig a little deeper into healthcare reform regulations for small businesses. Let’s take a closer look.

Background into Healthcare Reform Decisions

Back in 2013, the Internal Revenue Service (IRS) issued Notice 2013-54. This notice defined that an employer had created an “Employer Payment Plan” considered to be a group health plan under the Affordable Care Act (ACA) when the employer reimburses an employee for individual health insurance premiums or directly pays the insurance company for this employee’s individual policy. Even still, the Employer Payment Plans will fail to comply with two aspects of the ACA—the prohibition of annual limits on an individual’s benefits and the preventive health service requirements. If these were not complied with, employers would be subject to an excise tax, according to Section 4980D, of $100 per day for each individual that doesn’t meet compliance.

On February 18, 2015, the IRS issued new guidance. Through this, transitional relief was offered to employers that reimburse their employees for the cost of premiums for individual health coverage. This also allowed for arrangements to increase employees’ compensation to help pay for the cost of these individual policies.

Caveats to the Excise Tax—Transitional Relief for Small Businesses

As defined by the IRS as employers that employed an average of less than 50 full-time (and full-time equivalent) employees on business days during the preceding calendar year, small employers were offered limited relief from the Section 4980D excise tax. For these employers only, the excise tax would not be asserted on them for failure to comply with the Market Reforms by Employer Payment Plans that we discussed above. This is applicable through June 30, 2015. In addition to being exempt from the excise tax during this period, small employers are not required to file Form 8928 solely because of the Employer Payment Plan for timeframe during which the employer qualifies for the relief. But, it is important to note that after the June 30th deadline, small employers may be liable for the excise tax, but this does not apply to reimbursement arrangements (health reimbursement arrangements and others) for medical expenses other than insurance premiums.

How Small Employers are Responding

Because of Notice 2013-54, employers don’t want to risk the excise tax by sponsoring Employer Payment Plans. Instead, many have chosen to increase after-tax compensation for employees who can then purchase their own coverage. This practice is only exempt from the ACA and is not considered a group health plan if the compensation is increased and the employer does NOT require that the compensation be used to fund health insurance. It is important to understand that employers that require the extra compensation to be used for health coverage will be considered part of an Employer Payment Plan that IS subject to the 4980D excise tax. Please note that whether an Employer Payment Plan is offered on an after-tax basis will still be subject to treatment as a group health plan.

What to do for the Future

If you, as a small employer, have Employer Payment Plans in place, you’ll want to modify them before June 30th to avoid the Section 4980D excise tax. As Beck and Company’s Certified Public Accountants and Business Advisors, we understand that you, as small business owners, want to do what you can for your employees and hope the information has helped you understand the regulations more thoroughly. To learn more about our accounting services to help you navigate through these tricky processes, visit here.

Contact us here at Beck and Company CPAs so we can help you with your unique needs as small business owners navigating the new healthcare reform regulations.

Health Insurance Options for Small Business Employees

Keeping up with the ever-evolving world of health insurance rules and regulations has probably never been quite as difficult or confusing as it is currently. It is essential to understand current policies, future deadlines, and available options to help your small business be informed and make the best choices for your employees and their health insurance while remaining compliant with government rules. To learn more, visit here. Let’s take a closer and more in-depth look at methods the Internal Revenue Service (IRS) permits employers of small businesses to reimburse employees for the cost of health insurance premiums in three ways. If the regulations were not followed for reimbursement, please note that these reimbursements would then be considered taxable income for the employee.

Reimbursement Method #1: Reimbursements that are administered by the Employer

A payment may be issued to the employee by the employer to reimburse them for a portion or for their full health insurance premiums. If this payment is received, it is the responsibility of the employee to provide proof of both payment and coverage for the times in which they received reimbursement. If the employer does obtain proof from the employee that the funds received from the employer were used by the employee to purchase health insurance, the payments are not taxable income. Instead of paying just the employee, the employer has the option to give a check that is made payable to the employee’s insurance company that must be remitted to the insurance provider. The most important factor of this method is sufficient proof obtained by the employer from the employee that the reimbursement is being used for health insurance and that there was coverage throughout the course of time in which there was reimbursement.

Reimbursement Method #2: HSA- Health Savings Account

Employers are allowed to contribute towards the amount of the premiums of an employee’s health savings account, but the combined amount maximum contributed between employers and employees has limits established by the IRS. Employer contributions do not count as taxable income on the part of the employee, but this is only the case if the funds are used to pay medical expenses and premiums. If they are not expenses that would be deductible, the employee must then report this and pay tax on this amount.

Reimbursement Method #3: HRA- Health Reimbursement Arrangement

With a health reimbursement arrangement (HRA), an employer may establish one for employees that can stand alone or be offered alongside other plans (flexible spending, cafeteria plan, etc.). HRAs can only be contributed to by the employer, and contributions are not included as part of the employee’s taxable income. The IRS does not put limitations on HRAs so there are not limits on the deductible or the employee expenses, and the employer has flexibility in how the plan terms are established.

Policies that are not eligible for reimbursement by employers

The three methods above are acceptable forms of reimbursements for employee health coverage, but there are policies and plans that do not meet IRS regulations. This means these would not qualify for a medical expense deduction cannot be tax-exempt reimbursements. These include hospitalization plans and policies that pay a flat amount for hospitalization or falling ill. Life insurance is not included either. Finally, policies that pay wages of employees while they are ill or disabled are also not included.

As Beck and Company’s Certified Public Accountants and Business Advisors, we understand that you, as small business owners, want to do what you can for your employees and hope the information has helped you understand what you can and cannot do in terms of health coverage reimbursement. Our client accounting services are designed with you and your business in mind to help with the complexities and changes of health insurance and taxation policies. We want to help you understand and navigate through confusing rules and regulations so you can protect your business and still care for your employees and their health insurance needs. To learn more about our accounting services to help you in this process and many others, visit here.

Contact Beck and Company CPAs for further assistance and for us to help you answer any personalized or specific questions you have related to these health insurance reimbursement guidelines.

Small Businesses and Individual Health Insurance: What you Need to Know

It is unbelievable and hard to comprehend just how much has changed in the world of health insurance in the United States in such a short period of time. So much has transformed in just the last few months to a year alone, and keeping up with all of the changes and regulations can be daunting to say the least. As a small business, it is important to stay up-to-date on the latest regulations and policies to avoid penalties and stay compliant. At the same time, following it all can be confusing. Do you know and also truly understand the latest information and its implications for your business? Let’s take a closer look at current policies, future deadlines, and available options to help your small business be informed and make the best choices for your employees and their health insurance while remaining compliant with government rules.

Past Rules and Regulations, Upcoming Deadlines

On September 30, 2013, the Internal Revenue Service (IRS) issued rules prohibiting employers from paying for or reimbursing employee insurance premiums when they enroll in an individual health insurance plan. The fines for not being in compliance are steep. Employers who continue to pay for or reimburse insurance premiums face fines as great as $100 per employee per day. This adds up quickly!

There is good news, though, for those in small businesses of fewer than 50 employees. For these businesses, the IRS has provided a special transitional relief period by waiving penalties for this practice. Unfortunately, the good news of this relief is followed by bad news related to a deadline for when this transitional relief period will run out. This deadline is coming up on July 1, 2015. After this date, there will no longer be a transitional relief for small employers seeking to provide reimbursement to employees for their personal health insurance plans.

Exploring Alternative Options that still Assist your Employees with Coverage

So, how do you, as small business owners, remedy the situation? There are other options besides reimbursement or paying for health insurance policies. One of these would be to increase employees’ pay overall and not connect this pay in any way to pay for health insurance. Another option, now that small businesses cannot be penalized for adverse medical history with higher premiums, is to establish a group health insurance plan instead of having employees find their own policy. With the new laws since 2014, a wider spectrum of products with more benefits and tax advantages are now available with group plans.

As Beck and Company’s Certified Public Accountants and Business Advisors, we realize just how much heart and effort goes into striving to do what you can for employees as a small business. We understand that this is true in terms of wanting to assist them with health insurance as well. It is important to know the regulations and abide by them while simultaneously doing what you can for your employees. That is why we are here to help. Our client accounting services are designed with you and your business in mind. We want to help you understand and navigate through confusing rules and regulations so you can protect your business and still care for your employees and their health insurance needs. To learn more about our accounting services to help you in this process and many others, visit here.

Contact Beck and Company CPAs for further assistance to find out more about employee health insurance rules, regulations, and options for your specific business and its needs. Then, stay tuned next week as we explore your options for health insurance coverage for employees even further.

Important Tax Forms to Complete this Summer

It isn’t just April 15th that is an important date for taxes. There are deadlines for various forms and tax documents throughout the entire year that individuals and businesses need to be aware of. For this upcoming summer in particular, you will need to be aware of two important forms and due dates. These are the Foreign Bank and Financial Accounts (FBAR) forms that are due on June 30, 2015, and the Form 5500 series returns for employee benefit plans for calendar year employers that are due on July 31, 2015. Let’s take a closer look at what these forms are and what they involve. Most of all, be sure to keep the important filing deadlines in mind.

Report of Foreign Bank and Financial Accounts (FBAR)

If you, as a United States person, had interest in a foreign financial account or signature authority over a foreign financial account (including bank or brokerage accounts, mutual funds, trusts, and other foreign financial accounts) at any time during the last calendar year, you likely are required to file the FBAR. A United States person includes U.S. citizens, U.S. residents, entities, and trusts/estates formed under United States laws. According to regulations, if the aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year, you must file an FBAR. For FBAR filing purposes, even an LLC is required to file an FBAR report with interest in or signature authority over a foreign financial account. Please note that you may be required to report even if your foreign account did not generate any income.

The FBAR must be filed electronically with FinCEN. This form is not filed with income tax returns and must be RECEIVED by the Department of the Treasury on or before June 30th. No extensions are granted for the FBAR, and postmarks are not considered evidence of timely filing.

Form 5500 Series Returns for Employee Benefit Plans

The Internal Revenue Service (IRS), the Department of Labor (DOL) Employee Benefits Security Administration (EBSA), and the Pension Benefit Guaranty Corporation jointly require nearly all employee benefit plans to file some version (Form 5500, Form 5500-SF, Form 5500-EZ, etc.) of the Form 5500 report each year for employee benefit plans. This satisfies annual reporting requirements. This form reports profit sharing or money purchase pension plans, individual 401(k), and ERISA 403(b) plans. The version of the form that must be completed depends on the number of plan participants and the type of plan. These forms are the annual returns/reports of employee or small employee benefit plan forms. The return must be filed with the EBSA by the last day of the seventh month after the end of the plan year that began in 2014. For calendar year plans, this year’s filing due date is July 31, 2015.

Beck and Company Certified Public Accountants and Business Advisors know that tax documents and forms such as the FBAR and the Form 5500 are certainly complicated and can be confusing. It can even be tricky to know if they are required to be filed and which version needs to be filed, if required. The good news is that you don’t have to figure this all out alone. Beck and Company CPAs offer a large variety of tax services including tax planning and preparation to meet your needs. For more information about our tax consulting services, visit here.

Contact us here at Beck and Company CPAs if we can be of assistance to you or help you as you fill out these summer tax forms. We are happy to answer questions you may have about the forms and filing as well.

Nonprofit Leaders and How they Influence Board Members

The factors that contribute to the success (or failure) of nonprofits are many. Over the past month, we have taken a closer look at many of these factors. These include following through on commitments to staff and nonprofit constituents, prioritizing people over tasks, advocating for instead of simply satisfying the needs of constituents, using data to inform decisions, and using technology to take advantage of all possible venues with which to connect with all involved in the organization. In addition, we looked at how directors can help their board members to enhance organizational success by the ways in which meetings and other interactions with board members are structured in order to maximize the boards’ expertise. To learn more about this, visit here.

In addition to structuring board meetings and other interactions, leaders and directors of nonprofits have other powerful potential to positively influence the board of directors. These can be split into tasks and effective use of time. Let’s take a closer look at both.

Tasks Essential to Leaders and Directors of Nonprofits Positively Assisting Boards in their Job and the Organization Overall

Ensuring compliance and control of organizational practices even as the organization grows, changes, and increases in complexity
Ensuring financial practices are in place, monitored, upheld, and secure
Helping structure, navigate, and implement the strategic direction of the nonprofit and being sure operations are matching intended goals and outcomes
Building capability for the future by guiding current practices, future decisions, and daily operations well in addition to evaluating prior actions for effectiveness

Tips Essential to Leaders and Directors of Nonprofits Using Time with Board Members Effectively

Carefully plan interactions, meetings, and prioritization of tasks/decisions that need to be done/made
Manage expectations of what can be achieved in the time given to make strategic decision-making possible instead of challenging by not overwhelming board members but still wisely using instead of wasting time
Use opportunities for conversation unrelated to actual board meetings (such as dinners or other gatherings) to gain better overall insight into board members and their skill sets in order to better leverage the talents they possess
Think strategically about what the board truly needs to hear about and be involved in versus what can be handled within the organization’s daily operations instead. The ultimate waste of valuable time is spending it on areas that are unnecessary and not seeking guidance and direction in areas that are essential to success.
Use technology effectively to communicate with board members in a convenient way that also keeps communication flowing. This means using emails or other forms of communication for check-ins between scheduled board meetings. In addition, this can involve telephone and video conferencing to make it possible for meetings to occur without requiring everybody to be in the same place at the same time in order for a meeting to be held.

Beck and Company Certified Public Accountants and Business Advisors know that achieving success as a nonprofit and positively impacting board members are no easy feats. That is why we are here to help. Needing to focus on so many people (including board members) even with time limitation plus carrying out important tasks makes it hard to also need to focus time and energy on the financial side of operations. We can help with this aspect so you can focus on the others areas that will help you be successful. Beck and Company CPAs offer a large variety of financial services that are tailored to nonprofit needs. For more information on these nonprofit services, visit here.

Contact us here at Beck and Company CPAs to request financial nonprofit service offerings or to get more information on how to help your board and constituents in order to be successful as a nonprofit.

Helping your Nonprofit Board of Directors to be Successful

Being a successful nonprofit organization has never been an easy task. Unfortunately, it is more difficult than ever to be a successful nonprofit thanks to the quick pace of changes in our modern world, higher stakes than ever before, rapid technological advances, added pressures to keep up with all of the venues being used to get the word out, and many other facets. To find success, much is required on the part of the organization. To learn more about four keys to success for nonprofits, visit here.

When it comes to your board of directors, the challenges they face are no different. The modern board faces constantly evolving challenges with multiple issues competing for its attention in a limited period of time. With so many factors influencing nonprofits and such limited time for boards to meet, how can you help your board maximize the use of their board meeting time?

Structuring Board Meetings: Have a Central Focus

As directors of your nonprofit, it all begins with careful planning of the agenda to secure adequate time for the issues you most want to focus on. As we’ve discussed over the past few weeks, if you don’t know what to focus on at your nonprofit, this can be costly and detrimental to success. If it is unclear where to put emphasis and energy, you will likely need to change your focus from day-to-day operations to people and your mission in order to ensure success. Be sure your priorities, goals, and focus are defined and prioritized first and foremost. Once you know what to focus on during the meeting, start it with the strategic issues of priority for that year, ensuring there is time for quality discussion. Routine matters can be slotted in later.

Ways to Engage the Board of Directors during Meetings and Other Venues of Involvement

In addition to the idea of using traditional board meeting discussions and forums during board meetings, site visits and specialized briefings help to draw all the key strands of the agenda together to support strategic decision-making and gain a better understanding of what goes on at the organization. After these visits and briefings, a next step is to look at trends, call out the impact of technology, and use this body of evidence to influence and inform where the organization anticipates and desires to go moving forward. However, it is also important to provide an opportunity for unstructured discussion– a free flow of information with you as the chief executive or director before the demands of the agenda take over. This also provides an opportunity to hear about and benefit from board members’ wide-ranging experience and expertise.

As Beck and Company Certified Public Accountants and Business Advisors, we understand all that goes into being successful as a nonprofit and how much work goes into being intentional in helping your board members along this same path. For this reason, we are here to help. You can allow yourself to focus on your mission and being the liaison between the organization and board if you have less to focus on in terms of the financial side of daily operations. We would be happy to assist you with your auditing, accounting, and overall financial needs. Visit here for more information on the variety of nonprofit services we offer including CFO, controllership, and accounting services.

Contact us here at Beck and Company CPAs so we can equip you as nonprofit directors to equip your board of directors while easing the burdens of financial responsibilities by helping with them. We look forward to being part of your success as a nonprofit!

4 Keys to Being a Truly Successful Nonprofit

It is often the case that mainstream businesses are a bit “ahead of the times” of what most nonprofits are doing. High-performing companies are not just sitting on the sideline in order to get ahead of the curve. Instead, they are actively implementing innovative processes and honing their focus to get ahead. These companies are increasing revenue, growing in profits, raising market shares, and improving customer satisfaction. Although the desired outcomes are a little different for nonprofits, the desire to achieve success in goals is no different between mainstream businesses and nonprofit organizations. By implementing some of the same practices these successful companies are using at your nonprofit, you can help your organization to not only get out of its own ruts but be a leader and innovator among nonprofits. In turn, you can have the level of success in achieving your mission and goals that many large and successful businesses are having in achieving their desired profits.

It all starts by putting your focus in the right place. When it comes to businesses, they have found that there is connection between strong customer and employee engagement. A genuine customer focus is needed in order for businesses to thrive. This is no different for nonprofits. There needs to be a focus on nonprofit constituents and staff members instead of just day-to-day operations. To evaluate where your organization lies in putting your focus on the people and fulfilling commitments made to them, visit here.

If the focus of your organization, just like high-performing businesses that focus on customers and employees, is on the mission/constituents and staff, you are on the right track. Now, let’s take a closer look at four key areas that will help you, along with the right focus, to be truly successful as a nonprofit that are based on keys to success found amongst successful mainstream businesses.

4 Keys to being a Truly Successful Nonprofit

Right priorities start from the top but run deep. The behaviors of nonprofit leaders and board members support a focus on nonprofit constituents and the mission in high-performing nonprofits, and the practice is drilled down to include the behaviors of staff members, too. Success stems from supporting the execution of constituent- and mission-focused strategies. Leadership involvement includes crafting a formal strategy (such as a solid mission and action steps to meet it), setting clear goals, and aligning internal systems and processes with the needs that need to be met.
Focus beyond just constituent satisfaction to extend to customer advocacy. Satisfaction is the global standard for measuring a focus on customers for businesses and constituents for nonprofits. But, high performers across the spectrum recognize that active engagement is essential. Feedback and referrals are both important. In addition, advocating for constituents as a whole instead of simply meeting a need or two is essential.
The focus of the nonprofit should be driven, at least in part, by data. In the age of Big Data and evidence-based business activity, high-performance companies use customer insights, shared organization-wide, to shape products, services, and strategy. This should not be any different for nonprofits. Are you regularly collecting and actively using data to help meet your mission and goals?
Connect with constituents in as many ways as you can, including the use of technology. Are you putting technology to good use to better make connections with everyone from donors to those who receive the services offered by your nonprofit? This can include social media venues and technology offerings meant to track interactions plus marketing initiatives. These connections should encompass sharing stories and service offerings, soliciting feedback, listening to and acting on feedback, and promoting participation.

Beck and Company Certified Public Accountants and Business Advisors know that being a truly successful nonprofit, just like a successful business, is no easy task. That is why we are here to help. With so much focus needed on prioritizing, keeping people satisfied, advocating for constituents, using data to enhance success, and connecting well with those involved, it is hard to also need to focus time and energy on the financial side of operations. Leave this part to us so you can focus on the others areas that will help you be successful. We can help with a large variety of financial services that are tailored to nonprofit needs. For more information on all of our nonprofit services, visit here.

Beck and Company CPAs would be happy to help you achieve your nonprofit goals by helping with your financial practices and carrying out audits, etc. Contact us to learn more.

Setting your Nonprofit Organization Apart: Where Do Your Commitments Lie?

It is undeniable that you want your nonprofit organization to be as successful as possible, but do you really know what that takes? It can be easy, almost too easy, to simply do what has always been done at your organization instead of trying to be the best you can be and set yourselves apart from the pack. Too often, nonprofits do what they have always done instead of being innovative leaders themselves. Don’t let the success of your organization be robbed by a lack of initiative and best practices to simply maintain what has always been done and what is comfortable.

If you agree that you want to be as successful as possible as a nonprofit, that some things will need to be developed instead of staying the same in order to get there, and that you want to separate yourselves from the identity of “surviving” with acceptable practices to “thriving,” how do you do this? It starts by having a true focus on so much more than just day-to-day operations and tasks. It stems from a focus on people.

Developing the Right Focus on People instead of Operations

Let’s take it a step further and consider if your organization really does even focus at all beyond the day-to-day operations. Should your focus just be on routines and practices or should there be more of a focus on the people? Have you considered the people you are trying to reach and the people trying to make this outreach possible by working for your organization? This is an important starting point to evaluate your priorities and where your focus actually lies. It takes being focused on your mission and its constituents and helping your staff to be successful in these efforts.

If the focus of your organization should be on the mission/constituents and staff, you need to evaluate how they currently are being reached and how they are feeling. Let’s take a closer look at how to evaluate this by using some reflection questions you can ask yourself. The reality is that these questions should highlight if you are keeping your commitments to these groups because keeping commitments is essential to success.

Questions to ask yourself regarding those you are trying to reach based on your mission (your nonprofit constituents):

Are we meeting the needs we said we would meet or failing to provide what was promised?
Are constituents satisfied or disgruntled?
Does our mission come across to our constituents in how we act upon it or not?
Do constituents feel comfortable interacting with staff members and that their needs are being understood and responded to?

Questions to ask yourself regarding your organization’s staff:

Are we keeping promises made to our staff?
Are staff members feeling like they are being taken for granted, or are they appreciated?
Are staff needs being met by the organization to the point that they can truly focus on meeting the needs of others—of the nonprofit constituents being served?
Are staff members treating constituents well?
Are staff members bought in to the mission?
Are staff members equipped with the resources and training they need or not?

As Beck and Company Certified Public Accountants and Business Advisors, we realize just how much goes into being successful as a nonprofit. This is so much more than just day-to-day operations but requires pouring time, energy, and resources into the people serving and being served by the nonprofit. That is why we are here to help. You can allow yourself to focus on your mission and the important people involved with your nonprofit more if you have less to focus on in terms of the financial side of daily operations. We would be happy to assist you with your auditing, accounting, and overall financial needs. For more information on the variety of nonprofit services we offer including CFO, controllership, and accounting services, visit here.

Contact Beck and Company CPAs to find out more about helping your nonprofit to be successful and how we can help you achieve this by meeting your auditing and accounting needs.

New Tangible Property Regulations: What You Need to Know

It has been a long time coming. In fact, it has taken over ten years, but the tangible property regulations have finally been finalized. Why is this important for you and your business? In short, the new regulations will have a far-reaching impact because they affect every taxpayer whose business uses tangible property. If this applies to you, it is important to understand the new regulations and what they mean for you with regards to implementing them. The reality is that the rules are complex and comprehensive. They will require careful consideration of your circumstances and may necessitate new collection procedures in order to have the necessary data captured to use in implementing the regulations. Let’s take a closer look at the history that got us to where we are today and an overview of the new regulations to help you gain a better understanding of them.

The History of Regulations Past that Led us to Where We are Today:

First, understanding the background of these regulations and their history is essential. These regulations come as a result of a long-standing debate over the distinction between deductible repairs and capital improvement and whether tangible property is deductible or must be capitalized and recovered through depreciation. Until now, the rules were that deductible repairs included expenditures that restore the property to its operating state. On the contrary, capital expenditures were those that provide a more permanent increment in longevity, utility, or worth of the property. The IRS has announced various proposed regulations in the past decade but has turned around and withdrawn those a couple years later time and time again.

Finally, in September of 2013, the IRS issued final regulations for tangible property applicable to tax year 2014 and beyond. Now, the regulations state that all tangible property that is not inventory must be capitalized and depreciated unless there is an exception. Let’s take a closer look at how to understand the new rules.

Understanding the New Tangible Property Rules and Regulations:

-Materials and supplies are an exception if they cost $200 or less or have a life of use less than one year. In this case, the item is considered a deduction not a capitalized cost.

-When acquiring property, taxpayers are required to capitalize the amount paid to acquire or produce tangible property. This includes transaction costs.

-A unit of property is defined by how the final regulations establish a single asset for capitalization purposes. Once established, then the improvement standards are applied to the unit to see if the expenditures improve the property and require capitalization. A unit of property includes all functionally interdependent components.

-In terms of improvements, an expenditure must be capitalized if it results in betterment (B) to the unit of property, adapts (A) the unit of property to a new or different use, or results in a restoration (R) of the unit of property. This is called the “BAR” test. Expenditures on existing assets are deductible repairs only if they do NOT meet the BAR test.

-The rules regarding disposition assets have been expanded. A disposition includes the sale, exchange, retirement, physical abandonment, or destruction of an asset. This also includes when an asset is transferred to a supplies or scrap account including the retirement of building structural components. It is now the case that a gain or loss must be recognized when assets are permanently withdrawn from either use in the business or from the production of income.

-There are variations that depend on the use of a building, but in general, a building is considered a unit of property.

-Routine maintenance is covered through a safe harbor within the new regulations. In this case, expenditures may be able to be deducted for activities that would likely occur more than once during the class life of an asset that don’t result in its betterment.

In summary, the final rules and regulations classify property as deductible materials and supplies and provide guidelines for identifying costs of acquiring tangible property. This includes determinations for what a unit of property is versus what a component is, along with implications for determining depreciation class life. Capitalized improvements to property are now more defined. They include expenditures that result in a betterment of property, adapt the property to a new or different use, or restore it to a like-new or working order state after the end of its deprecation class life.

There is so much more to understand about the rules and regulations of tangible property. They pose considerable risks to your businesses if they are not correctly carried out and thoroughly assessed. Beck and Company Certified Public Accountants and Business Advisors are here to help! Please contact us for more information about your specific business regarding tangible property. We are happy to help your business to be successful on their tax filings. For further information, read this datasheet that summarizes the new and final regulations.