Hawkins Ash CPAs https://hawkinsashcpas.com Part of your business. Part of your life. Tue, 07 May 2019 16:27:53 +0000 en-US hourly 1 Updating SUTA Rates https://hawkinsashcpas.com/updating-suta-rates/ Mon, 20 May 2019 16:20:10 +0000 https://hawkinsashcpas.com/?p=7298 With the first quarter of 2019 coming to a close, make sure you have the current SUTA tax rate updated in your QuickBooks file. This can be done in October of the prior year; however, this is often overlooked. In the QuickBooks file, click Lists (top menu bar), Payroll Item List. Once in the list, […]

The post Updating SUTA Rates appeared first on Hawkins Ash CPAs.

]]>

With the first quarter of 2019 coming to a close, make sure you have the current SUTA tax rate updated in your QuickBooks file. This can be done in October of the prior year; however, this is often overlooked.

In the QuickBooks file, click Lists (top menu bar), Payroll Item List. Once in the list, scroll down to the state unemployment item. Double-click the item and click Next two times. This will bring you to the Company Tax Rates for 20XX window. Enter the tax rate for the current year, click Next until you can click Finish. In October each year there will be an additional field for the 1 st quarter of the next year.

The State of Wisconsin Department of Workforce Development (DWD) sends the new tax rate notices during October.

Minnesota Unemployment Insurance sends its tax rate notices at the end of November or beginning of December.

Both states offer the option to potentially lower this rate. Wisconsin has a voluntary contribution and Minnesota has a tax rate buy down option. Contact your (or one of our) payroll professional to find out more.

If you are unsure of what your rate is:

Wisconsin

Log into the website and follow steps below:

https://unemployment.wisconsin.gov/SUITESPortalWelcome/EmployerPortalWelcome.aspx?target=TaxWageFilingInfo.aspx.

Once logged in:
1.)  click on View/Update Account at the top
2.)  then click on View Rate Summary

Minnesota

Log into the website and follow steps below:

https://www1.uimn.org/ui_employer/employer/login.do

Once logged in:
1.)  click Account Maintenance on the left
2.)  then click View Tax Rate Determination

This screen will provide the current tax rate for Minnesota employers.

 

Written by: Jodi Burton, Quickbooks Online Certified ProAdvisor

The post Updating SUTA Rates appeared first on Hawkins Ash CPAs.

]]>
Podcast: Required Minimum Distributions https://hawkinsashcpas.com/%ef%bb%bfpodcast-required-minimum-distributions/ Fri, 17 May 2019 10:49:59 +0000 https://hawkinsashcpas.com/?p=7548 Most retirees know that when they reach the age of 70 ½, they may have to start taking distributions from their retirement accounts. Most people think this is a must, but it’s not necessarily. Learn more details about the different ways to delay or not be required to take the distributions.

The post Podcast: Required Minimum Distributions appeared first on Hawkins Ash CPAs.

]]>

Most retirees know that when they reach the age of 70 ½, they may have to start taking distributions from their retirement accounts. Most people think this is a must, but it’s not necessarily. Learn more details about the different ways to delay or not be required to take the distributions.

The post Podcast: Required Minimum Distributions appeared first on Hawkins Ash CPAs.

]]>
Client Feature and Executive Director Q&A: Bear Creek Services https://hawkinsashcpas.com/client-feature-and-executive-director-qa-bear-creek-services/ Tue, 14 May 2019 16:16:57 +0000 https://hawkinsashcpas.com/?p=7518 Located in Rochester, MN, Bear Creek Services has been providing support services for individuals with development disabilities since becoming established in the 1970’s. Its mission expanded to support individuals with traumatic brain injuries in 1998. Prior to the 1970’s, people with development disabilities were typically placed in institutions to live. Since their disabilities weren’t life […]

The post Client Feature and Executive Director Q&A: Bear Creek Services appeared first on Hawkins Ash CPAs.

]]>

Located in Rochester, MN, Bear Creek Services has been providing support services for individuals with development disabilities since becoming established in the 1970’s. Its mission expanded to support individuals with traumatic brain injuries in 1998.

Prior to the 1970’s, people with development disabilities were typically placed in institutions to live. Since their disabilities weren’t life threatening and constant medical attention wasn’t required, living inside institutions didn’t serve them well. It created bad living conditions resulting in lower life spans and more health problems.

Parents with disabled children realized how unsuitable this situation was and needed to make a change. Together they formed an organization which is now known as Bear Creek Services. It was the first organization of its kind in southeastern Minnesota.

Bear Creek’s first home was established in 1976 to providing housing for six individuals with disabilities. Today the Organization has 12 group homes and six apartments, all of which are filled each year. The 12 group homes provide continuous 24-hour care and help 56 residents.

Four of the six apartments are a part of the Bear Creek Independent Living Services (BCILS) program. Through this program, 50 higher functioning individuals with disabilities receive training each week to learn how to live more independently. Depending on the individual’s learning and progress through the program, residents can become independent enough to only require limited support services.

To learn more about Bear Creek Services, visit their website: www.bearcreekservices.org

              

Executive Director Q&A

Linda Driessen has served as the Executive Director for Bear Creek Services since 2013. Before joining Bear Creek Services, Linda spent 22 years in the nonprofit field, primarily with organizations whose missions support individuals with developmental disabilities.

In addition to her role with Bear Creek Services, Linda is involved with many health and human service and nonprofit initiatives that include the following.

  • Region 10 Quality Council – A group that develops, implements, and monitors a continuous quality improvement system for individuals with disabilities so they can live the life that they choose in their community.
  • Providers Network, Inc. – A nonprofit organization that promotes best practices for providers of residential services for individuals with disabilities in Southeast Minnesota.
  • Rochester Community and Technical College Human Services Technician Advisory Board – Advises the Human Services Department at RCTC on the curriculum and class offerings appropriate to training Human Services Technicians and Pre-Social Work majors.
  • Rochester Non-Profit Consortium – A group of nonprofit leaders who work together to create organizational efficiencies.

We had an opportunity to ask Linda a few questions to get her perspective of nonprofit leadership. Here’s what she had to say:

1.) What are some things you know now that you wish you knew when you first started as a nonprofit leader?

I wish I had understood more about how the activities in the Government impact the work we do. Particularly in the field of disability support services. The legislature determines our reimbursement rates. If we are not continuously involved in the process, decisions can be made that can majorly impact how we do business.

I wish I knew more about the various ways the Board of Directors can impact the work of a nonprofit and that the role of the board changes as a nonprofit changes. As with so many aspects of business, you have to repeatedly evaluate the role of the board as the nonprofit evolves.

2.) What has been your biggest source of pride as executive director?

We work with individuals with developmental disabilities and brain injury. Our desire is to build independence and maximize the potential for those we support. My biggest source of pride is when individuals accomplish life goals by way of the support services we provide. Hearing about the success of someone moving into their own apartment is a great joy for me. Watching someone we support learn a skill they have been working on for a long time makes the challenges all worth it.

I am also incredibly proud of the people who work for us. It is a tough job that doesn’t get the pay or recognition it deserves. Knowing that we have some long term, very dedicated staff keeps me motivated to help make Bear Creek Services the best provider of services to individuals with disabilities.

3.) What are your three biggest accomplishments in your career as a nonprofit leader?

  1. Working with other support providers in Rochester to create a collaborative to share training that is required by the Department of Human Services.
  2. Building a team of really great people who work with me. My leadership team are top notch and they are the reason our agency is a success.
  3. Building our Independent Living Program. We are the only agency in Southeast Minnesota that offers this model for independent living.

4.) What are the dominant challenges that you see nonprofit organizations facing and what do you think would be viable solutions?

I think that many businesses are struggling to find qualified employees, but more so in the nonprofit sector. There is a belief that nonprofit should mean “no profit.” However, we have to compete for the same employees that for-profit businesses are recruiting. Typically, we are not always able to offer the same benefits as many for-profit employers. I believe there are a couple of things that nonprofits need to do. One is to break the myth that overhead in a nonprofit should be much less than in a for-profit organization. Nonprofits need to have the same tools to make a successful business, and we need to send the message to funders that supporting a good business model in a nonprofit is giving to the success of individuals who receive the supports of that nonprofit organization. Also, I believe that collaboration is necessary for success across this sector. Rochester is a great community for collaboration and a lot is being done to by local nonprofits to work together to address the needs of the community.

5.) How do you see the organization changing in the next two years, and how do you see yourself creating that change?

There is a lot of emphasis in our field to be as person centered in the supports we provide as possible. That means that our focus needs to be on supporting people to achieve the goals they set out for themselves and not prescribing how their lives should be. We have been working at this for several years and will continue to work on it.
Person centered support requires that we adjust our business to meet the ever changing needs of those we support. We will need to build more accessible homes (wheelchair accessible) and work with the community to create more affordable housing for those who wish to have their own apartment/house. I believe the role of the executive director is to set the vision and then give those who work for us the tools to accomplish the vision. I see myself as creating this by hiring and retaining employees who are excited about the vision and who believe they can create opportunities for people with disabilities to be full members of the Rochester Community.

The post Client Feature and Executive Director Q&A: Bear Creek Services appeared first on Hawkins Ash CPAs.

]]>
Assisting your Board in Becoming More Efficient and Effective https://hawkinsashcpas.com/assisting-your-board-in-becoming-more-efficient-and-effective/ Fri, 10 May 2019 16:14:28 +0000 https://hawkinsashcpas.com/?p=7509 Being a member of a Board of Directors for a non-profit requires commitment and passion for the mission of the organization. Board members are often on multiple Boards at the same time, so providing useful information and clear objectives will enable Board members to be both efficient and effective. There are several ways you can […]

The post Assisting your Board in Becoming More Efficient and Effective appeared first on Hawkins Ash CPAs.

]]>

Being a member of a Board of Directors for a non-profit requires commitment and passion for the mission of the organization. Board members are often on multiple Boards at the same time, so providing useful information and clear objectives will enable Board members to be both efficient and effective. There are several ways you can assist your Board in fulfilling their duties, from a financial management perspective and from an organizational requirements perspective.

Determining Meaningful Metrics

 

Although there are many standard metrics which you could provide your Board, seeking input from Board members for items specific to your organization will result in the most meaningful information. In addition, you may belong to industry groups from which you could solicit input for industry averages. For example, if days cash on hand compared to daily cash needs or personnel costs compared to total expense is important to your organization, it is probably also important to others in your industry as well. This information might be useful in determining how well your organization is operating compared to industry peers. Providing information in graphic format (pie charts, bar graphs or other visuals) can also make complex financial information easier to understand.

Key Financial Ratios

 

Depending on the wishes of the Board, financial ratios could also be a component of the monthly or quarterly reports. For example, the current ratio (current assets/current liabilities) is a liquidity ratio which is one indicator of the organization’s ability to pay its obligations on time. A ratio of 1:1 or more indicates that, at the measurement date, the organization has enough cash and other assets that can be converted to cash in the next 12 months to pay the obligations due in the next 12 months.

Activity ratios can be used to see how total expenses in various categories (program services, management and general, and fundraising) compare to total support and revenue for the period. Tracking these and other ratios over time can highlight potential problem areas which may need to be addressed.

Organizational Board Duties

 

Many times Boards are focused on current operations and longer range items are put “on the back burner.” While focusing on current operations is needed, neglecting other Board responsibilities could cause problems down the road. To assist your Organization in being proactive and help your Board become more effective, encourage the Board to regularly review policies and by-laws. To minimize valuable Board time for these activities, you might consider having a “policy committee” review a section of policies on a rotating basis, with the goal to review all policies over a 12-24 month period. This committee would then recommend policy changes to the entire Board as needed. Your Board could apply the same process to by-laws, with the additional step of having them periodically reviewed by legal counsel.

We Are Here to Help

 

Communicating financial information that is both accurate and understandable allows Board members to engage in meaningful discussions and make informed financial decisions. Please contact us if you need assistance in developing useful financial reports for your nonprofit organization.

The post Assisting your Board in Becoming More Efficient and Effective appeared first on Hawkins Ash CPAs.

]]>
Nonprofit Connection: May 2019 https://hawkinsashcpas.com/nonprofit-connection-may-2019/ Fri, 10 May 2019 15:57:00 +0000 https://hawkinsashcpas.com/?p=7505 See what’s going on in the nonprofit industry and check out our latest newsletter! Here’s a list of our featured articles: Assisting your Board in Becoming More Efficient and Effective Client Feature and Executive Director Q&A: Bear Creek Services QuickBooks Connect Event – Roundtable Series Employee Feature: Rachel Burro Nonprofit Tax Tidbits: Form 990 Schedules […]

The post Nonprofit Connection: May 2019 appeared first on Hawkins Ash CPAs.

]]>

See what’s going on in the nonprofit industry and check out our latest newsletter!

Here’s a list of our featured articles:

  • Assisting your Board in Becoming More Efficient and Effective
  • Client Feature and Executive Director Q&A: Bear Creek Services
  • QuickBooks Connect Event – Roundtable Series
  • Employee Feature: Rachel Burro
  • Nonprofit Tax Tidbits: Form 990 Schedules I and J

>>> Click here to view and subscribe to our Nonprofit Connection newsletter

The post Nonprofit Connection: May 2019 appeared first on Hawkins Ash CPAs.

]]>
Deducting Business Losses for Pass-Through Entities https://hawkinsashcpas.com/deducting-business-losses-for-pass-through-entities/ Wed, 08 May 2019 18:35:02 +0000 https://hawkinsashcpas.com/?p=7476 It’s not uncommon for businesses to sometimes generate tax losses. But the tax law limits deductible losses in some situations. And the Tax Cuts and Jobs Act (TCJA) further restricts the amount of losses that sole proprietors, partners, S corporation shareholders and, typically, limited liability company (LLC) members can now deduct. If your company operates […]

The post Deducting Business Losses for Pass-Through Entities appeared first on Hawkins Ash CPAs.

]]>

It’s not uncommon for businesses to sometimes generate tax losses. But the tax law limits deductible losses in some situations. And the Tax Cuts and Jobs Act (TCJA) further restricts the amount of losses that sole proprietors, partners, S corporation shareholders and, typically, limited liability company (LLC) members can now deduct. If your company operates under one of these business structures, it’s important to bear all these limitations in mind as the year rolls along.

Before and After

Under pre-TCJA law, an individual taxpayer’s business losses could usually be fully deducted in the tax year when they arose unless the passive activity loss (PAL) rules or some other provision of tax law limited that favorable outcome. Another restriction was if the business loss was so large that it exceeded taxable income from other sources, creating a net operating loss (NOL).

The TCJA temporarily changes the rules for deducting an individual taxpayer’s business losses. If your pass-through business generates a tax loss for a tax year beginning in 2018 through 2025, you can’t deduct an “excess business loss” in the current year.

An excess business loss is the excess of your aggregate business deductions for the tax year over the sum of your aggregate business income and gains for the tax year, plus $250,000 ($500,000 if you’re a married taxpayer filing jointly). The excess business loss is carried forward to the following tax year and can be deducted under the rules for NOLs.

What it Means

For business losses passed through to individuals from S corporations, partnerships and LLCs treated as partnerships for tax purposes, the new excess business loss limitation rules apply at the owner level. In other words, each owner’s allocable share of business income, gain, deduction or loss is passed through to the owner and reported on the owner’s personal federal income tax return for the owner’s tax year that includes the end of the entity’s tax year.

Keep in mind that the new loss limitation rules kick in after applying the PAL rules. So, if the PAL rules disallow your business or rental activity loss, you don’t get to the new loss limitation rules.

Practical Impact

The rationale underlying the new loss limitation rules is to restrict the ability of individual taxpayers to use current-year business losses to offset income from other sources, such as salary, self-employment income, interest, dividends and capital gains.

The practical impact is that your allowable current-year business losses can’t offset more than $250,000 of income from such other sources (or more than $500,000 for joint filers). The requirement that excess business losses be carried forward as an NOL forces you to wait at least one year to get any tax benefit from those excess losses.

Potential Effect

If you’re expecting your business to generate a tax loss in 2019, we can help you determine whether you’ll be affected by the new loss limitation rules.

The post Deducting Business Losses for Pass-Through Entities appeared first on Hawkins Ash CPAs.

]]>
Innocent Spouse Rules Offer Protection Under Some Circumstances https://hawkinsashcpas.com/innocent-spouse-rules-offer-protection-under-some-circumstances/ Wed, 08 May 2019 17:57:49 +0000 https://hawkinsashcpas.com/?p=7472 Must one spouse pay the tax resulting from a fabrication or omission by another spouse on a jointly filed tax return? It depends. If the spouse qualifies, he or she may be able to avoid personal tax liability under the “innocent spouse” rules. Joint Filing Status Generally, married taxpayers benefit overall by filing a joint […]

The post Innocent Spouse Rules Offer Protection Under Some Circumstances appeared first on Hawkins Ash CPAs.

]]>

Must one spouse pay the tax resulting from a fabrication or omission by another spouse on a jointly filed tax return? It depends. If the spouse qualifies, he or she may be able to avoid personal tax liability under the “innocent spouse” rules.

Joint Filing Status

Generally, married taxpayers benefit overall by filing a joint tax return on the federal level. This is particularly the case when one spouse earns significantly more than the other. Filing jointly may also help the couple maximize certain income tax deductions and credits.

But joint filing status comes with a catch. Each spouse is “jointly and severally” responsible for any tax, interest and penalties attributable to the return. And this liability continues to apply even if the couple gets a divorce or one spouse dies. In other words, the IRS may try to collect the full amount due from one spouse, even if all the income reported on the joint return was earned by the other spouse.

Basic Rules

However, the tax law provides tax relief for an “innocent spouse.” Under these rules, one spouse may not be liable for any unpaid tax and penalties, despite having signed the joint return.

To determine eligibility for relief, the IRS imposes a set of common requirements. The spouses must have filed a joint return that has an understatement of tax, and that understatement must be attributable to one spouse’s erroneous items. For this purpose, “erroneous items” are defined as any deduction, credit or tax basis incorrectly stated on the return, as well as any income not reported.

From there, the other (“innocent”) spouse must establish that, at the time the joint return was signed, he or she didn’t know — or have reason to know — there was an understatement of tax. Finally, to qualify, the IRS needs to find that it would be unfair to hold one spouse liable for the understatement after considering all the facts and circumstances.

Additional Notes

For many years, innocent spouse relief had to be requested within two years after the IRS first began its collection activity against a taxpayer. But, in 2011, the IRS announced that it would no longer apply the two-year limit on collection activities.

In addition, by law, when one spouse applies for innocent spouse relief, the IRS must contact the other spouse or former spouse. There are no exceptions even for victims of spousal abuse or domestic violence.

Help Available

Historically, courts haven’t been particularly generous about upholding claims under the innocent spouse rules. State laws can also complicate matters. If you’re wondering whether you’d qualify for relief, please contact us for help.

What Does the IRS Consider?

The IRS considers “all facts and circumstances” in determining whether it would be inequitable to hold an “innocent” spouse liable for taxes due on a jointly filed tax return. One factor that may increase the likelihood of relief is that the taxes owed are clearly attributable to one spouse or an ex-spouse who filled out the errant return.

If one spouse was deserted during the marriage, or suffered abuse, it may also improve the chances that innocent spouse relief will be granted. In some cases, the IRS may examine the couple’s situation to determine whether the spouse applying for relief knew about the erroneous items.

The post Innocent Spouse Rules Offer Protection Under Some Circumstances appeared first on Hawkins Ash CPAs.

]]>
Tax+Business Alert: May 7, 2019 https://hawkinsashcpas.com/taxbusiness-alert-may-7-2019/ Wed, 08 May 2019 17:24:29 +0000 https://hawkinsashcpas.com/?p=7466 Check out the headlines in our latest Tax+Business Alert newsletter sent out May 7th, 2019:   Innocent Spouse Rules Offer Protection Under Some Circumstances Podcast: Cash vs. Accrual Basis Deducting Business Losses for Pass-Through Entities QuickBooks Connect Roundtable >>> Click here to view the newsletter

The post Tax+Business Alert: May 7, 2019 appeared first on Hawkins Ash CPAs.

]]>

Check out the headlines in our latest Tax+Business Alert newsletter sent out May 7th, 2019:

 

  • Innocent Spouse Rules Offer Protection Under Some Circumstances
  • Podcast: Cash vs. Accrual Basis
  • Deducting Business Losses for Pass-Through Entities
  • QuickBooks Connect Roundtable

>>> Click here to view the newsletter

The post Tax+Business Alert: May 7, 2019 appeared first on Hawkins Ash CPAs.

]]>
Faster ACH Payments Coming This Year https://hawkinsashcpas.com/faster-ach-payments-coming-this-year/ Mon, 06 May 2019 10:58:52 +0000 https://hawkinsashcpas.com/?p=7275 In February 2019, QuickBooks Online rolled out next day ACH (bank transfer) payments. You will no longer have to wait two to five days for your money just because someone chooses “debit” instead of “credit.” Earlier access to your money makes it easier for you to concentrate on what you do best – your business. […]

The post Faster ACH Payments Coming This Year appeared first on Hawkins Ash CPAs.

]]>

In February 2019, QuickBooks Online rolled out next day ACH (bank transfer) payments. You will no longer have to wait two to five days for your money just because someone chooses “debit” instead of “credit.” Earlier access to your money makes it easier for you to concentrate on what you do best – your business.

The rollout will not happen all at once. QuickBooks Online customers will receive their invitations by email over the course of 2019. How long before you receive your invitation depends on such factors as processing activity and history. After you are notified, acceptance is as easy as 1-2-3:

1. Select the gear icon
2. Select Account and Settings, then Payments
3. Click “Upgrade”

QuickBooks charges a fee of 1% of the transaction, topped at $10. If you lose the invitational email, your eligibility will remain inside of the payment screen. If you think you’ve missed the invitational email but are sure you would have received it, then under that same payment screen, look at your “Deposit Speed.” If you see “Upgrade”– there it is. If not, be patient, it will be coming to you.

New accounts don’t have this option yet, but it will be coming soon. Also, if you would like to maintain your current deposit rate, you will not be penalized. You are not required to accept the invitation.

Credit card payments will be unaffected, as they are already next day. There is also no additional fee from QuickBooks for next day credit card payment service.

Written by: Steve Arnold, Certirfied Quickbooks Online ProAdvisor

The post Faster ACH Payments Coming This Year appeared first on Hawkins Ash CPAs.

]]>
Podcast: Cash vs. Accrual Basis https://hawkinsashcpas.com/podcast-cash-vs-accrual-basis/ Fri, 03 May 2019 12:10:35 +0000 https://hawkinsashcpas.com/?p=7444 Listen in with us to learn more about what cash vs. accrual basis is and the explanation of its background. Script: Even though we are into the New Year, there may still be some ways that a business owner can save taxes for last year. One of the things that tax reform gave us is […]

The post Podcast: Cash vs. Accrual Basis appeared first on Hawkins Ash CPAs.

]]>

Listen in with us to learn more about what cash vs. accrual basis is and the explanation of its background.

Script:

Even though we are into the New Year, there may still be some ways that a business owner can save taxes for last year. One of the things that tax reform gave us is the opportunity for more businesses to use the cash basis of accounting.

– Okay, what is that?

Okay, just to give you a little background of the cash basis of accounting. When you pay your taxes, when you’re determining what your income looks like for the year, your income is only determined by what your customers are paying you. Your deductions are determined only on when you pay that bill. So that’s the cash basis.

There’s another kind of accounting out there called the accrual basis of accounting. That one says that you earned the income, that’s when you have to pick it up in income. So in other words, you do a job which you haven’t yet been paid by your customer, you have to pick that up in your income now.

The same thing goes for deductions. Let’s say you have a bill that you haven’t paid yet. If it was incurred in that last period, you actually can deduct that on this year’s return.

– So, what is better?

It really depends. For simplicity purposes, the cash basis is better because you can almost run your business out of a checkbook. That’s what a lot of smaller businesses do. The accrual basis of accounting though, gives you better comparatives. What is does is it gives you a more true picture of where your business is really at for net income. When you pick up your income in the cash basis, and let’s say a large vendor hasn’t paid you, your income is not going to look very good until they pay you. But under the accrual basis, once you earn that service, it shows up on your income statement. So that is essentially earned income for you.

– What if you have to write that off because they’re not going to pay you?

So with the accrual basis of accounting, because you picked up that income before it was paid and if it never does get paid, you get to take a write-off for that. Under the cash basis, you don’t have a bad debt write-off because you only pick it up in your income when they pay you.

– So can you use both forms?

You can! We have a fair number of people that do this. We have one that uses the accrual basis for internal purposes so they can see truly where their business is at. And they use the cash basis a lot of times for tax purposes because it’s easier. That kind of thing can add complexity, so at that point you do want to be working with a CPA.

The post Podcast: Cash vs. Accrual Basis appeared first on Hawkins Ash CPAs.

]]>