Hawkins Ash CPAs https://hawkinsashcpas.com Part of your business. Part of your life. Fri, 21 Sep 2018 17:44:38 +0000 en-US hourly 1 Fundraising Event Considerations: Part II https://hawkinsashcpas.com/fundraising-event-considerations-part-ii/ Tue, 18 Sep 2018 18:04:21 +0000 https://hawkinsashcpas.com/?p=6468 In the May 2018 Nonprofit Connection, we discussed ways to safeguard cash and other assets at special events. The following article discusses other important items to consider in planning special events. Quid Pro Quo Quid pro quo in relation to special events is a payment of more than $75 that a donor makes to a […]

The post Fundraising Event Considerations: Part II appeared first on Hawkins Ash CPAs.

]]>

In the May 2018 Nonprofit Connection, we discussed ways to safeguard cash and other assets at special events. The following article discusses other important items to consider in planning special events.

Quid Pro Quo

Quid pro quo in relation to special events is a payment of more than $75 that a donor makes to a charity that is part contribution and part purchase of goods or services. The best example of this is the purchase of a dinner ticket. A donor pays $100 for a ticket but the dinner is valued at $30. The tax deductible contribution part of the ticket is $70. This is considered a quid pro quo contribution.

The organization must provide the donor a disclosure statement because the donor’s payment is more than $75. Usually this statement is included on the dinner ticket. Although the deductible contribution is only $70, disclosure is required because the full payment made is more than $75. IRS imposes a penalty on an organization if this disclosure is not made. The penalty is $10 per contribution, not to exceed $5,000 per fundraising event or mailing.

Auction Items

It is important to develop a method for tracking auction items as they are collected. An inventory list can guard against theft of auction items, provide good records for sending donor acknowledgement letters, and provide a history of donors for future fundraising events. The list should include the following: item description, item value (if supplied by the donor), who gave the item, and who received the item. After the event, update the list with the amount received for each item during the auction. Proceeds on the list should be reconciled to the accounting records.

Accounting for auction items is commonly done incorrectly. This is the proper accounting for auction items under two different scenarios.

Scenario #1: Item was purchased by the organization.

Scenario #2: Item was donated to the organization for auction.

Scenario #2 is the preferred method for recording items donated for auction. Consider the size of your auction and how long items are held before deciding to switch to this method.

Raffles

Requirements for raffles vary by state. During the planning phase of your event, you should gather information on the license requirements, the types of raffles allowed, and who can participate. The license requirements for Wisconsin and Minnesota are as follows.

In Wisconsin, any organization conducting a raffle must obtain a license through the Division of Gaming’s Office of Charitable Gaming. There are two types of licenses – Class A and Class B. The Class A raffle license is needed when tickets are sold in advance and the day of the raffle. The Class B raffle license is needed when tickets are only sold the day of the raffle. Bucket raffles and 50/50 raffles are common examples of a Class B raffle. An organization conducting both Class A and Class B raffles must obtain both license types. Applications and more information can found at: https://doa.wi.gov/Pages/LicensesHearings/RaffleLicense.aspx.

In Minnesota, an exemption from gambling activity such as raffles may be obtained from the Minnesota Gambling Control Board if the organization qualifies. An exempt permit is required when the following applies: 1) the total value of all prizes donated and purchased is less than $50,000 for the year, and 2) gambling activity is limited to five days during the year. An application for the exempt permit must be filed for each year. Organizations that don’t meet these two requirements must obtain a lawful gambling license. Applications and more information can found at: https://mn.gov/gcb/raffles.html.

There are also federal requirements regarding raffles. If the organization generated over $15,000 in raffle and other gambling proceeds, it must complete Part III of Form 990, Schedule G. Revenue and expenses related to the raffles or other gambling activities are reported on this schedule. If a single donated prize is valued at more than $5,000, it must be reported on Schedule B of Form 990. Prize winners of cash or gifts valued at over $600 should be issued a 1099-MISC (included in Box 3). Also, winners from wagering activities that receive winnings over $600 should be issued a Form W-2G.

Other Items

Lastly, consider these other items when planning your next event:

  • Creating a budget for event expenses
  • Obtaining event insurance
  • Obtaining a liquor license or event permit, if either are applicable
  • Training volunteers before the event
  • Reconciling revenue and expenses to supporting schedules and auction inventory listing
  • Scheduling a debriefing meeting shortly after the event to discuss and make note of possible improvements

The post Fundraising Event Considerations: Part II appeared first on Hawkins Ash CPAs.

]]>
Tax+Business Alert: September 2018 https://hawkinsashcpas.com/taxbusiness-alert-september-2018/ Mon, 10 Sep 2018 19:29:52 +0000 https://hawkinsashcpas.com/?p=6516 The September 2018 Tax+Business Alert publication includes the following headlines. TCJA Draws a Silver Lining Around the Individual AMT Podcast: When to Take Social Security QuickBooks Connect Roundtable Series High-Income Earners Back in the AMT Spotlight How Spouse-Owned Businesses Can Reduce Self-Employment Taxes Click here to read more>

The post Tax+Business Alert: September 2018 appeared first on Hawkins Ash CPAs.

]]>

The September 2018 Tax+Business Alert publication includes the following headlines.

  • TCJA Draws a Silver Lining Around the Individual AMT
  • Podcast: When to Take Social Security
  • QuickBooks Connect Roundtable Series
  • High-Income Earners Back in the AMT Spotlight
  • How Spouse-Owned Businesses Can Reduce Self-Employment Taxes

Click here to read more>

The post Tax+Business Alert: September 2018 appeared first on Hawkins Ash CPAs.

]]>
QuickBooks Update: Fall 2018 https://hawkinsashcpas.com/quickbooks-update-september-2018/ Mon, 10 Sep 2018 18:55:37 +0000 https://hawkinsashcpas.com/?p=6513 Our September 2018 edition of QuickBooks Update includes the following topics: The Shortcuts That You Want, Where You Want Them QuickBooks Connect Roundtable Series Using Incognito Windows with QuickBooks Online Verify Data in QuickBooks 6 Year-End Must Do’s View the e-newsletter here>

The post QuickBooks Update: Fall 2018 appeared first on Hawkins Ash CPAs.

]]>

Our September 2018 edition of QuickBooks Update includes the following topics:

  • The Shortcuts That You Want, Where You Want Them
  • QuickBooks Connect Roundtable Series
  • Using Incognito Windows with QuickBooks Online
  • Verify Data in QuickBooks
  • 6 Year-End Must Do’s

View the e-newsletter here>

The post QuickBooks Update: Fall 2018 appeared first on Hawkins Ash CPAs.

]]>
Fall Career Fairs https://hawkinsashcpas.com/fall-career-fairs-2018/ Fri, 07 Sep 2018 17:05:23 +0000 https://hawkinsashcpas.com/?p=6511 Taking a step into public accounting provides a great foundation for your accounting career. You’ll have the opportunity to work with a variety of clients and industries and aspects of accounting including tax, audit and accounting services. Public accountants are in high-demand, guaranteeing competitive salary and benefits. In public accounting and our firm, you’ll have […]

The post Fall Career Fairs appeared first on Hawkins Ash CPAs.

]]>

Taking a step into public accounting provides a great foundation for your accounting career. You’ll have the opportunity to work with a variety of clients and industries and aspects of accounting including tax, audit and accounting services. Public accountants are in high-demand, guaranteeing competitive salary and benefits. In public accounting and our firm, you’ll have the opportunity for advancement and travel.

Interested in applying for a career or internship? View opportunities here>

Join Hawkins Ash CPAs at the following career fairs this fall. Our staff will be at our booth, sharing information about career opportunities with our firm and public accounting.

UW-Eau Claire
Career Fair
Wednesday, September 12

St. Norbert College
Fall 2018 Career & Internship Fair
Tuesday, September 18

Twin Cities
Accounting and Auditing Student Conference
Tuesday, September 18

UW-La Crosse
Accounting Career Fair
Monday, September 24

UW-Green Bay
Fall Job & Internship Fair
Wednesday, October 3

St. Mary’s University of Winona
Career Fair
Wednesday, October 24

The post Fall Career Fairs appeared first on Hawkins Ash CPAs.

]]>
How is your side-gig income taxed? https://hawkinsashcpas.com/how-is-your-side-gig-income-taxed/ Tue, 04 Sep 2018 20:21:48 +0000 https://hawkinsashcpas.com/?p=6504 Many people are trying to find new and interesting ways to make money outside of their nine-to-five jobs to make ends meet or just earn extra spending money. Whether you’re selling Thrive, Mary Kay, DoTerra, Young Living, Thirty-One, Rodan+Fields or other products and services on the side, you need to be prepared for how this […]

The post How is your side-gig income taxed? appeared first on Hawkins Ash CPAs.

]]>

Many people are trying to find new and interesting ways to make money outside of their nine-to-five jobs to make ends meet or just earn extra spending money. Whether you’re selling Thrive, Mary Kay, DoTerra, Young Living, Thirty-One, Rodan+Fields or other products and services on the side, you need to be prepared for how this extra income will be taxed.

Join us for this FREE educational event to make sure more of the extra cash you earn stays in your pocket. You will learn the tax implications of running your own business. You’ll also learn about common and uncommon tax deductible line items, how and when to make estimated tax payments, how and when to pay self-employment tax and much more.

Date

Tuesday, September 18, 2018

Location

125Live

125 Elton Hills Dr NW

Rochester, MN 55901

Registration

We apologize for the inconvenience, this event has been canceled.

About the Presenter

Heather Whitten, EA

Heather is a tax manager at Hawkins Ash CPAs. She provides tax preparation, compilation, monthly bookkeeping and payroll services to individuals and businesses. Heather previously held various accounting and tax roles within Rochester area companies. Heather graduated from College of the Ozarks.

Questions?

info@hawkinsashcpas.com

The post How is your side-gig income taxed? appeared first on Hawkins Ash CPAs.

]]>
Nonprofit Tax Tidbits: Form 990 Schedule G https://hawkinsashcpas.com/nonprofit-tax-tidbits-form-990-schedule-g/ Tue, 04 Sep 2018 17:57:17 +0000 https://hawkinsashcpas.com/?p=6466 Preparing Schedule G is something I would not advise working on during a late Friday afternoon. A morning early in the week would be better. I also strongly recommend drinking a cup of black coffee or better yet, a 5-hour Energy drink to get you through it. All joking aside, Schedule G is one of […]

The post Nonprofit Tax Tidbits: Form 990 Schedule G appeared first on Hawkins Ash CPAs.

]]>

Preparing Schedule G is something I would not advise working on during a late Friday afternoon. A morning early in the week would be better. I also strongly recommend drinking a cup of black coffee or better yet, a 5-hour Energy drink to get you through it. All joking aside, Schedule G is one of the most challenging schedules for our clients to prepare. However, it does not have to be difficult if you properly track events during the year.

Schedule G is used to report professional fundraising services, fundraising events, and gaming. Organizations that report more than $15,000 of expenses for professional fundraising services are required to complete Part I of Schedule G (Note: Form 990-EZ filers are not required to complete Part I). Organizations that report more than $15,000 of gross revenue from fundraising events are required to complete Part II of Schedule G. Organizations should complete Part III of Schedule G if they reported more than $15,000 of gross income from gaming activities.

Part I

The IRS defines professional fundraising services as services performed for the organization requiring the exercise of professional judgement or discretion consisting of planning, management, preparation of materials, and/or provision of advice and consulting regarding solicitation of contributions. Professional fundraising does not include services provided by the organization’s employees or board members in their capacity as employees and board members nor does it include purely ministerial tasks such as printing, mailing services, or receiving and depositing contributions to a charity. If the organization has an agreement, whether written or oral, with a professional fundraiser under which the fundraiser will be compensated at least $5,000 by the organization, it will be required to report the details of the agreement. Details include the name and address of the fundraiser, the activity, if the fundraiser has custody or control of contributions, gross receipts from the activity, the amount paid to the fundraiser, and the net amount received by the organization.

Part II

The two largest fundraising events with gross receipts greater than $5,000 will be broken out and the remaining fundraising events with gross receipts greater than $5,000 will be combined and entered under other events. Organizations need to ensure they track the gross receipts from a fundraising event as well as the contributions received by the organization for the fundraising events. This is one area organizations struggle because they don’t keep the detail of the gross receipts from the fundraising event. Therefore, they have a hard time determining the amount attributable to contributions. Contributions included in gross receipts are the total amounts received where there is no adequate consideration or exchange transaction taking place.

The other area of Part II that organizations struggle with is the reporting of expenses related to fundraising events. Organizations are required to report the direct expenses incurred by the organization to host the event. Line items on Schedule G include cash prizes, noncash prizes, rent/facility costs, food and beverages, entertainment, and other direct expenses.

Contributions are subtracted from the gross receipts and often times the net income summary on Part II will show a loss from fundraising events due to the IRS reporting requirements. However, this does not mean that the event generated a net loss. Organizations have to look at the amount of contributions received because of the event. A good question to ask is: if that event was discontinued, would we have received these contributions?

Part III

For this section of Schedule G, treat all bingo as a single event and all pull tabs as a single event. The organization will need to report the gross revenue from bingo, pull tabs/instant bingo/progressive bingo and other gaming. Expenses will need to be broken out by cash prizes, noncash prizes, rent/facility costs, and other direct expenses. Organizations should also track if these activities are done by volunteers and the percentage of time volunteers spend conducting the activity.

In Conclusion

In order for the organization to properly complete Schedule G, it is important that the organization tracks the detail of their fundraising events to know the amount of contributions received as well as the detail of the expenses. It may be beneficial to create a different general ledger account for each fundraising activity to properly segregate the revenues and expenses. Schedule G can be a good resource for nonprofits to see a summary of their fundraising events, making it important to have the Schedule completed accurately.

If you have any questions in regards to Schedule G of Form 990, please contact your Hawkins Ash CPAs representative.

The post Nonprofit Tax Tidbits: Form 990 Schedule G appeared first on Hawkins Ash CPAs.

]]>
Tax Reform Education Event-La Crosse, WI https://hawkinsashcpas.com/tax-reform-education-event-lacrosse/ Fri, 31 Aug 2018 14:58:42 +0000 https://hawkinsashcpas.com/?p=6500 Wouldn’t you like to know in advance if the new tax law will help or hurt you? At this free event in La Crosse, we’ll help you take maximum advantage of the law to lower your Federal income taxes and increase your cash flow. Tax reform affects every business and individual differently. Be sure you […]

The post Tax Reform Education Event-La Crosse, WI appeared first on Hawkins Ash CPAs.

]]>

Wouldn’t you like to know in advance if the new tax law will help or hurt you? At this free event in La Crosse, we’ll help you take maximum advantage of the law to lower your Federal income taxes and increase your cash flow. Tax reform affects every business and individual differently. Be sure you attend our event to get all the facts before you’re surprised when filing your 2018 tax return next year.

Date

Tuesday, October 2, 2018

Time

5:00 p.m. – 7:00 p.m.

Location

Hawkins Ash CPAs
500 South 2nd Street, Suite 200
La Crosse, WI 54601

Register today!

Click to register.

Questions?

608.784.7737

The post Tax Reform Education Event-La Crosse, WI appeared first on Hawkins Ash CPAs.

]]>
Podcast: The Taxability of Social Security https://hawkinsashcpas.com/the-taxability-of-social-security/ Wed, 29 Aug 2018 19:06:01 +0000 https://hawkinsashcpas.com/?p=6484 As the baby boomers become eligible for Social Security benefits, many are confused on how Social Security is taxed on their return. Last week, we talked about when to take Social Security Benefits. If you missed it, you can go back and listen to it on our website at www.hawkinsashcpas.com. This week, I want to […]

The post Podcast: The Taxability of Social Security appeared first on Hawkins Ash CPAs.

]]>

As the baby boomers become eligible for Social Security benefits, many are confused on how Social Security is taxed on their return.

Last week, we talked about when to take Social Security Benefits. If you missed it, you can go back and listen to it on our website at www.hawkinsashcpas.com. This week, I want to talk about the tax effects of taking Social Security. Click the orange button to listen to this podcast episode.

Script

WHEN ARE SOCIAL SECURITY BENEFITS TAXABLE TO ME?

Your Social Security Benefits will be taxable if your total income for a married couple is over $32,000 or for a single or head-of-household, $25,000. Now that $32,000 is made up of all of your income, i.e. your W-2 income, your business income, your interest and dividends, IRA’s and pensions, things like that, plus any tax exempt income, plus one-half of the Social Security benefit you actually received. Therefore, how much of your Social Security becomes taxable is based off of a sliding scale. It can be anywhere from 0% taxable up to 85% taxable. It is zero for married persons who file separately and lived together at any time during the year.

CAN YOU GIVE ME SOME EXAMPLES OF HOW THE SCALE WORKS?

Say we have a married couple and their Social Security benefits each year are $40,000, and they have other income totaling $12,000. When we do the math, we have $12,000 of income, plus half of the $40,000 of Social Security, they now have $32,000 worth of income. Based on our previous discussion, if you have $32,000 of income or below, that Social Security is not taxable. But let’s add something to that scenario. Let’s say that you have a capital gain or you decide to take some money out of an IRA to buy a car or an RV, or take a vacation, something like that. Let’s say you add just $10,000 more of income to the scenario we just talked about. By adding that $10,000 more, your taxable income is actually going to increase by $15,000, because you pick up the $10,000 of extra income and $5,000 of your Social Security now becomes taxable. Therefore, a $10,000 withdrawal actually increases it by $15,000. If we go up a little higher in the bracket and you decide to take $30,000 extra out. That $30,000 increases your taxable income by $51,000, or an extra $21,000. If we take it to the extreme and you take an extra $45,000 out of an IRA or have capital gain income, etc., it costs you $80,000 of additional income because $35,000 of your Social Security will become taxable, which is essentially 85% of the $40,000 benefit that you received.

WHEN CAN PEOPLE GET CAUGHT OFF GUARD AS TO THE NEGATIVE TAX CONSEQUENCES

  • First year that you take Social Security
  • Taking Social Security and continuing to work or your spouse works
  • Get married after receiving Social Security
  • Taking out lump sums from IRAs

In summary, we find that a lot of people get caught off guard that first year they start taking Social Security. For most of us, we have gone through our working years and we have received W-2 income and on that W-2 our employers take off federal and state taxes. Well, people can get caught out because for Social Security, unless you tell them to withhold taxes, they won’t. Therefore, now you have all of this extra income on your return, there was no withholding against it and so now you have to pay that tax when you file your tax return on April 15. The other thing that we find is that if people take Social Security while their spouse continues to work, because like we saw in the examples above, if your spouse has any sort of income, a lot of your Social Security benefits are going to become taxable once again. If you don’t have any withholding against that Social Security income, it’s going to cause you to have tax at the end of the year. The other thing is that when people get married later in life and maybe they were both receiving Social Security for the last couple of years and their income wasn’t that high so none of their Social Security was taxable, but now they get married and their income is above that $32,000 threshold, now some of their Social Security becomes taxable, so they get caught off guard for that.

WHAT CAN BE DONE TO DECREASE THE IMPACT OR AT LEAST MAKE IT EASIER COME TAX TIME?

  • Take distributions out in stages rather than lump sums.
  • Take out enough each year to maximize a tax bracket.
  • Set up withholding on the Social Security payments.

Although many people know that Social Security benefits can be taxable, they still get caught off guard when tax time comes. Being aware of how Social Security is taxed can keep those surprises to a minimum.

The post Podcast: The Taxability of Social Security appeared first on Hawkins Ash CPAs.

]]>
DHS Audit Requirement Update https://hawkinsashcpas.com/dhs-audit-requirement-update/ Tue, 28 Aug 2018 18:14:44 +0000 https://hawkinsashcpas.com/?p=6473 During 2017, Wisconsin State Statute 46.036 (4)( c ) and 49.34(4)( c ) were amended to increase the threshold for the requirement to provide a purchaser with a certified financial and compliance audit report from $25,000 to $100,000 for care and services purchased. Effective January 1, 2018, both the Department of Health Services (DHS Audit […]

The post DHS Audit Requirement Update appeared first on Hawkins Ash CPAs.

]]>

During 2017, Wisconsin State Statute 46.036 (4)( c ) and 49.34(4)( c ) were amended to increase the threshold for the requirement to provide a purchaser with a certified financial and compliance audit report from $25,000 to $100,000 for care and services purchased. Effective January 1, 2018, both the Department of Health Services (DHS Audit Guide) and the Department of Children and Families (Provider Agency Audit Guide) implemented this audit requirement increasing the threshold from $25,000 to $100,000. The increase to the audit threshold is in effect for contract periods that began on or after January 1, 2018.

The post DHS Audit Requirement Update appeared first on Hawkins Ash CPAs.

]]>
Intuit Data Protect https://hawkinsashcpas.com/intuit-data-protect/ Mon, 27 Aug 2018 19:23:00 +0000 https://hawkinsashcpas.com/?p=6149 Keeping your QuickBooks file and your computer safe is very important to the success of your business. There are various storage options to back up your computer and QuickBooks files, and always keep a backup offsite in case of any incidents. In addition, if your file is not password protected, you must also encrypt your […]

The post Intuit Data Protect appeared first on Hawkins Ash CPAs.

]]>

Keeping your QuickBooks file and your computer safe is very important to the success of your business. There are various storage options to back up your computer and QuickBooks files, and always keep a backup offsite in case of any incidents. In addition, if your file is not password protected, you must also encrypt your flash drive, in case it gets into the wrong hands.

QuickBooks now offers a means to keep your files and your computer safe. The program Intuit Data Protect is a subscription service that helps you protect your data from loss or damage due to virus, laptop theft, file corruption, fire, and so on. Your files are automatically backed up online over the Internet once a day, every day, at an automatically selected time to an offsite location. You can choose to back up just your QuickBooks file, or you can back up your entire computer. Intuit Data Protect integrates with QuickBooks versions 2011 and later. The subscription to Intuit Data Protect costs $4.95/month or $49.95 annually for back up of your Quick Books files. If you want to protect your entire computer, the cost is $9.95/month or $99.95 annually.

To Activate Intuit Data Protect
1.) Open Intuit Data Protect.

  • From QuickBooks, go to File > Back Up Company > Set Up/Activate Online Backup.
  • From the Backup Status section (bottom right of QuickBooks Home), select Intuit Data Protect.
  • From the System Tray, find and right-click the IDP icon (green padlock) and select Open Intuit Data Protect.

2.) The Intuit Data Protect window appears. Choose Activate Now.

3.) In the Intuit App Center window, sign in using your Intuit Account credentials created when you subscribed to the service.

4.) The Intuit Data Protect Diagnose window automatically runs. Click Continue when all the status shows Complete. A confirmation screen pops up if the IDP service has found some previously backed up files. Click Yes if you wish to recover your files or No to proceed with the setup process.

5.) In the next window, select all the files you want to back up and click Continue. The first window is for selecting QuickBooks files. After you click Continue, you can select the other folders you wish to back up. You will then be asked to set up a schedule to back up the files on the next window. Click Continue again.

6.) The Notification Email settings window opens. Assign an e-mail address to be notified if:

  • The backup fails.
  • The backup is successful.
  • The last good backup is older than X number of days. (You can set the number of days here.)
  • Other critical issues.

Note: For first-time setup, the check boxes will not show up. This is working as designed. Click Continue until you reach the home screen of IDP. Go to Change Backup Settings and continue until you reach the Notification Email Settings window again. The check boxes should be available.

7.) A prompt message appears for a successful IDP setup. Click OK.

The post Intuit Data Protect appeared first on Hawkins Ash CPAs.

]]>