Insights

Cost allocation can be a cumbersome task for nonprofits, especially organizations with many activities. However, the process is critical for multiple reasons, and it’s worth reviewing cost allocation practices regularly to ensure they’re working as intended. This article covers the reasons to make allocations and the various methods used.

President Biden signed the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act into law in late 2022, but much of the wide-reaching retirement legislation is being phased in over time. There are some significant changes in 2024 and 2025 that may help nonprofit employers recruit and retain employees. This article presents what organizations need to know. A brief sidebar looks at how SECURE 2.0 boosts the advantages of qualified charitable distributions (QCDs), possibly leading to larger gifts for nonprofits.

The tax code allows an individual to claim a deduction for business debts that have become worthless. But qualifying for the deduction may be more complicated than one would think. In a recent case, the IRS denied more than $17 million in bad debt deductions on the grounds that the advances in question represented equity rather than debt, hitting the taxpayer with millions of dollars in taxes and penalties. This article recounts the U.S. Tax Court case Allen v. Commissioner. Allen v. Commissioner (T.C. Memo 2023-86).

During the COVID-19 pandemic, business travel nearly came to a halt. Today, it’s on the rebound, as “Zoom-fatigued” executives craving face-to-face interaction hit the road again. With more people getting out of their offices, now is a good time for a refresher on the tax deductibility of business travel expenses. This article explores what’s considered one’s tax home and what expenses are deductible. A sidebar explains the deductibility rules when a business trip is mixed with pleasure.

The 20% qualified business income (QBI) deduction is available for income from an eligible trade or business, but it isn’t available if that same property is classified as an investment. This article points out that it’s worth considering whether an owned rental property meets the definition of a trade or business under IRS requirements. It also explains that determining whether rental real estate activities qualify for the QBI deduction is a complicated undertaking and is likely to require the services of a tax professional.

Let’s face it: Most nonprofits are founded on a passionate belief in service. This doesn’t always include a passion for numbers. To fill this gap in financial expertise, nonprofits often hire chief financial officers (CFOs). But do all nonprofits — including small organizations — need one? This article examines the duties of a CFO, how the size of a nonprofit organization may affect a CFO’s role, qualifications that a CFO should bring to the job, and whether outsourcing the job may be the right move.

Congratulations again to our colleagues celebrating anniversaries in Q1 2024. Here's to more years of shared success!

Navigating the intricate world of financial reporting can often seem like maneuvering through a sea of technical terminology and regulatory obligations, particularly challenging for small businesses and startups. In a landscape dominated by the need for clarity in the financial health of companies, the role of compilation services is critical. Understanding how compilation services can simplify financial reporting is not just optional knowledge—it is essential for making informed business decisions and fostering growth.