payroll expenditure or revenue account, profit or loss

What Business and Nonprofit Leaders Should Know about Payroll Tax Audits

What comes to mind when you hear you’re about to be audited? If you’re like most people, it’s an unpleasant idea focused solely on proving the accuracy of recent income tax returns. That’s not the only type of audit though; the IRS conducts a number of less familiar audits that often take business and nonprofit leaders by surprise. Payroll and employment tax audits are a prime example. (While nonprofits aren’t always subject to the same employee taxes as businesses, they must still comply with laws regarding federal withholding, Social Security, Medicare and other applicable payroll taxes.)

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You’ve Received an IRS Audit Notice: Now What?

Congratulations, you have been selected for an audit! Those words are as likely as any to cause terror in the unlucky individual who reads them. The IRS may not phrase an invitation to participate in an audit exactly that way, but the gist is unmistakable: You are about to undergo an official examination of your tax return for at least one filing year. What should you do?

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Fun With Form 990

OK, it’s not actually fun. Much to the chagrin of nonprofit leaders, tax-exempt does not mean filing-exempt. Most nonprofit organizations must file Form 990, which is due to the IRS by the 15th day of the 5th month after the close of each fiscal year. A few church-affiliated organizations can escape this annual requirement by applying for an exemption. For everyone else, the best approach is to understand the reporting rules and adopt an organized approach.

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Tidy Up Those Files: Here’s What You Need to Keep in 2019 (And Every Year)

“Where is that important document? I’m pretty sure we kept it…” If this sounds all too familiar, you’re not alone. Most organizations struggle with the burden of maintaining all the critical documents they will need to file taxes or complete an audit. And, of course, wondering whether or not you should hold on to a particular record only adds to the difficulty. The new year has just begun, so now is a perfect time to finally get those files in order. This time, though, you’ll have the advantage of knowing exactly what you need to keep.

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An Inside Look at the Tax Cuts and Jobs Act

If you own a business, you will want to pay close attention to the Tax Cuts and Jobs Act (TCJA) of 2017. This act, effective for taxable years beginning after December 31, 2017, affects the financials of business owners and their companies. To make TCJA a bit easier to digest, we want to focus on three new additions to the act involving tax deductions, corporate meals and entertainment.

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Which Education Tax Credit Is Right for You?

Credits related to higher education are some of Americans’ favorite tools for saving money on taxes. These benefits are relatively easy to claim, but the multiple IRS programs can create confusion for taxpayers. There are two separate routes to obtaining tax benefits surrounding educational expenses incurred by taxpayers or their dependents, and each has different qualifications and benefits.

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Why You Should Use Electronic Options When You File

The IRS can process e-file returns faster and with fewer errors than non-electronic options. This means quicker refunds and less contact with the IRS. Who doesn’t like that? IRS e-file provides proof of receipt within 24-48 hours of sending the tax return to the IRS. Individual and business clients can e-file a balance due return and schedule an electronic funds transfer (EFT) from their account for any date.

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Changing State Residency

Taxpayers are constantly searching for ways to reduce their income tax liability. One common way is people trying to establish residency in a state with no income tax (Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming) or with limited tax only on certain investment income (New Hampshire and Tennessee). There are many common misconceptions about what it takes to establish residency in one of these states for tax purposes. Read More »