ALL THINGS ACCOUNTING, TAXES, AND RELATED TOPICS

Properly classifying workers as employees or independent contractors is crucial for both businesses and individuals, with significant implications for taxes, rights, and responsibilities. Let's delve into the key aspects: For businesses: Employees:  Businesses must withhold income taxes, pay Social Security and Medicare taxes (FICA), and likely unemployment taxes for employees. They are also responsible for paying their own share of FICA taxes. Failure to do so can lead to significant penalties and interest. Independent contractors:  Businesses generally do not withhold taxes or pay FICA for independent contractors. However, they are required to issue Form 1099-NEC to report payments exceeding $600.   For workers: Employees:  Employers withhold income taxes from employees' paychecks, making tax filing easier. Employees also benefit from FICA contributions, which contribute to Social Security and Medicare benefits. Independent contractors:  They are res...

Nonprofit and governmental organizations often receive donations and grants that are restricted to being used for specific purposes. These restricted funds can be a valuable source of funding for organizations, but it is important to understand the different types of restrictions and how to manage them properly. Types of Restricted Funds There are two main types of restricted funds: temporarily restricted funds and permanently restricted funds . Temporarily restricted funds  must be used for a specific purpose, but the restriction expires after a certain period of time or when the purpose is achieved. For example, a donor may give a gift to a nonprofit organization to be used for a specific program or project. Once the program or project is completed, the organization can use the remaining funds for any purpose. Permanently restricted funds  must be held in perpetuity and used for a specific purpose. The principal of the fund cannot be spent,...

Fundraising events are a great way for nonprofit organizations to raise money and awareness for their cause. However, planning and executing a successful event can be a challenge. Here are some best practices for hosting and accounting for fundraising events: Planning Set SMART goals.  What do you want to achieve with your event? Do you want to raise a certain amount of money? Increase awareness of your organization? Attract new donors? Once you know your goals, you can develop a plan to achieve them. Choose the right event type.  There are many different types of fundraising events, such as galas, auctions, dinners, and walks/runs. Choose an event type that is appropriate for your target audience and that will help you achieve your goals. Create a budget.  How much money do you need to raise to cover the costs of your event? Be sure to include all of your expenses, such as venue rental, food and drinks,...

Nonprofit organizations are exempt from paying federal income tax, but they are still required to file annual tax returns with the Internal Revenue Service (IRS). The specific tax form that a nonprofit organization is required to file depends on its size and type of activities.   Which tax form to file   Most nonprofit organizations are required to file Form 990, Return of Organization Exempt from Income Tax. However, there are a few exceptions: Form 990-EZ : Small nonprofit organizations with annual gross receipts of less than $200,000 and total assets of less than $500,000 may be eligible to file Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. Form 990-N : Nonprofit organizations with annual gross receipts of less than $50,000 may be eligible to file Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required To File Form 990 or Form 990-EZ. When to file   Nonprofit organizations are required to file ...

501(c)(3) is a section of the Internal Revenue Code that provides tax-exempt status to certain nonprofit organizations. These organizations must be organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, educational, or other specified purposes. There are two main classifications of 501(c)(3) nonprofit organizations: public charities and private foundations. Public charities Public charities are the most common type of 501(c)(3) nonprofit organization. They are eligible to receive donations from the general public and from private foundations. Public charities must meet certain requirements, such as receiving at least one-third of their support from public sources (e.g., donations, government grants, and membership fees). Examples of public charities include 501c3s geared towards: Relief of the poor or the underprivileged advancement of religion Advancement of education or science Erection or maintenance of public buildin...

  Tips for growing your 501c3 non profit organization Growing a 501c3 organization can be challenging, but it is also incredibly rewarding. There are many different ways to grow your organization, and the best approach will vary depending on your specific mission, programs, and resources. However, there are a few general tips that can help any 501c3 organization achieve its growth goals. 1.     Have a clear vision and strategic plan.  Before you can start to grow your organization, you need to have a clear understanding of your mission, values, and goals. You should also develop a strategic plan that outlines how you plan to achieve your goals. Your strategic plan should be realistic and achievable, and it should be updated regularly to reflect changes in your organization's environment. 2.     Focus on your strengths and impact.  Once you have a clear vision and strategic plan, you need to focus on your organization's strengths and imp...