Nonprofit Updates from the IRS

irsYou may want to skip this post based on the title. However, you know you need to read it and rest assured it will be worth your time.

Short and sweet – the IRS recently updated and released the Form 990-EZ with a new help feature. In the 4 page form, there are small question mark icons. By clicking on the icon, you’d see a help display window. There are 29 of these question mark help icons and address common mistakes that small to mid size nonprofits make when filling out the form. This feature was created to help organizations file a more complete return and reduce the chances of the IRS contacting you. There is also a 47 page document with instructions on filling out the Form 990-EZ if that is helpful to you.

To find the Form 990-EZ with the new help feature and the Instructions for Form 990-EZ click here.

Nonprofits in the Trump Administration

nonprofitVarious articles from the Nonprofit Times and Chronicle of Philanthropy have recently been published about nonprofits under the Trump administration.  With the new 45th president taking office in two days, there will be changes. No matter your political bent, we should be informed and start preparing for how a new administration may affect the nonprofit sector. In this post, we lay out some of Trump’s high priorities and what it means for organizations.

Tax reform

Issue # 1 – There is a proposal to increase the standard deduction. This means that this will “…[reduce] the number of individuals able to file itemized tax returns.” The impact could “…decrease charitable giving because it reduces the number of itemizers, but there are also assumptions that – with an improved economy – giving would go up…” (Segedin).

Issue # 2 – Another proposal is to reduce the tax break for charitable contributions. Currently, it is at 39.6% rate and could potentially be reduced to 33% and limit the tax credit deductions to $200,000 per couple.  (Clolery and Hrywna).

IRS overhaul

There has been continued conversation about improving transparency. This has come from media covering and reporting the various issues with certain nonprofits misappropriating funds or tainted donations. About a year ago, there was proposed federal regulation that nonprofits would need to collect and report major donor contributions. However, it was withdrawn. Now, it could potentially be brought up again by General Kamala Harris (who recently won the California’s Senate seat and was the person spearheading appeals for the “Donee Report”).  Robert Waldman, attorney and Business Division Chair of Venable, LLP, advice is to make sure operations are in order (Clolery and Hrywna).

Cuts in Federal Funding

Overall, there is a concern that cuts in federal funding will impact social services. One particular funding source, Social Service Block Grant, might be cut or even eliminated. Currently, the grant is $1.5 billion. Reduction of this grant would affect programs that support children, mental health, and aging populations.


Clolery, Paul and Mark Hrywna. “Budget Cuts Might Hit Less Obvious Social Services.” The Nonprofit Times, 1 January 2017.

Segedin, Andy. “Nonprofits And President Trump’s First 100 Days.” The Nonprofit Times, 3 January 2017, http://www.thenonprofittimes.com/news-articles/nonprofits-president-trumps-first-100-days/. Accessed 16 January 2017.

501(c)s: A Breakdown of the Many Types

taxThe most common 501(c) is the 501(c)3, but do you know the other types of nonprofits? Click here for a breakdown of the different 501(c)s as defined by the IRS.

With tax season, below is the IRS’s “quick check” whether you can deduct a contribution.

Deductible as Charitable Contributions Not Deductible As Charitable Contributions
Money or property you give to: Money or property you give to:
  • Churches, synagogues, temples, mosques, and other religious organizations
  • Civic leagues, social and sports clubs, labor unions, and chambers of commerce
  • Federal, state, and local governments, if your contribution is solely for public purposes
  • Foreign organizations (except certain Canadian, Israeli, and Mexican charities)
  • Nonprofit schools or hospitals
  • Groups that are run for personal profit
  • The Salvation Army, American Red Cross, CARE, Goodwill Industries, United Way, Boy Scouts of America, Girl Scouts of America, Boys and Girl Clubs of America
  • Groups whose purpose is to lobby for law changes
  • War veterans’ groups
  • Homeowners’ associations
Expenses paid for a student living with you, sponsored by a qualified organization
  • Individuals
Out of pocket expenses when you serve a qualified organization as a volunteer
  • Political groups or candidates for public office
Cost of raffle, bingo, or lottery tickets
Dues, fees, or bills paid to country clubs, lodges, fraternal orders, or similar groups
Tuition
Value of your time or services
Value of blood given to a blood bank

 

*Information for this post was collected directly from the IRS website and their publications. To read the full IRS publications about nonprofits click on the following titles: Publication 526 and Publication 557.

Serve Indiana Webinars – September 26th and 29th

serve-indianaThe Serve Indiana Commission is providing upcoming training and technical assistance calls for organizations regarding the FY2017 Grant Competition for AmeriCorps* State funding.

AmeriCorps grants are awarded to eligible organizations for the purpose of supporting AmeriCorps members and addressing community needs. An AmeriCorps Member is an individual who is enrolled in an approved national service position and engages in community service. Members may receive a living allowance and other benefits while serving. Upon successful completion of their service members receive an education award from the National Service Trust. CNCS awards AmeriCorps State Formula funds to Governor-appointed state service commissions. Serve Indiana is responsible for administering these funds and overseeing all of the AmeriCorps grants awarded to the state.

To access application materials, please visit http://www.in.gov/serveindiana/2347.htm

Please see the information below on upcoming calls.

Introduction to AmeriCorps:
Monday, September 26, 2016 at 10:00 a.m. ET
For questions including appropriate AmeriCorps member service activities, staffing for the program, grantee responsibilities, or any other question related to program design or program management.

Conference Line: Dial – 712-432-0383   Access- 417071#

Webinar link: http://www.webinar.in.gov/serveindiana/

Application Process:
Thursday, September 29, 2016 at 10:00 a.m.  ET
For questions about the AmeriCorps grant application selection criteria, grant review process, or any other questions that need to be addressed in order to complete your application.

Conference Line: Dial – 712-432-0383  Access- 417071#

Webinar link: http://www.webinar.in.gov/serveindiana/

Indiana Secretary of State Reinstatement – From DWD Mission Minded Blog

Carrie Minnich (2) (576x800)
Carrie Minnich, CPA

Are you up to date on your business entity reports with the state of Indiana? Carrie Minnich in a blog post from August 2016 addresses how an organization can be reinstated if the reports have not been filed. The problem with not filing is that the organization will be administratively dissolved and may not conduct business.

Below are the steps Carrie mentions that are required to be reinstated.

1. “Complete Form AD-19, Affidavit for Reinstatement of Domestic Corporation and Form ROC-1, Correct/Change of Responsible Officer Information to obtain a Certificate of Clearance from the Indiana Department of Revenue.”

2. “The Certificate of Clearance will be mailed to you by the Indiana Department of Revenue in approximately 4 weeks.”

3. “Complete Form 4160, Application of Reinstatement. You must have a Certificate of Clearance from the Indiana Department of Revenue before the Application for Reinstatement can be filed.  There is a $30 reinstatement fee required with this form.”

4.  “Complete Form 48725, Indiana Business Entity Report and pay the required filing fees for all years owed.  It is not necessary to complete a separate form for each filing year owed; however, you must pay the filing fee for each year and complete the most current form.”

5. “Mail the Certificate of Clearance, Application for Reinstatement and Business Entity Report, along with the required fees noted in 3 and 4 above to the Indiana Secretary of State.  All four of these must be mailed together.”

To check your status with the state of Indiana, go to inbiz.in.gov/business-entity/filing/.

To read Carrie Minnich’s full blog post, click here.

 

New Department of Labor Overtime Regulations Seminar June 29th

Community Foundation of Greater FWThe Department of Labor (DOL) recently released updated rules increasing the salary level used under the Fair Labor Standards Act to determine if employees are classified as exempt from overtime. The new rules go into effect starting December 1, 2016 with the key change being that salaried workers paid up to $47,476 annually must be paid overtime if they work more than 40 hours in a work week. This is the first update to overtime regulations in nearly 12 years and doubles the maximum salary allowed for overtime pay. Is your organization prepared and have a plan for the financial impact?

Make sure you are informed and prepared by joining the Community Foundation for the Overtime Regulations and the Impact for Nonprofits seminar Wednesday, June 29 from 8:30 – 10:00 a.m. at the Community Foundation of Greater Fort Wayne (555 E. Wayne St.).  Thomas M. Kimbrough, Partner Barrett McNagny LLP will discuss the new rule and its implications for organizations, as well as provide helpful tips on discussing the rule with employees.

Thomas M. Kimbrough provides counseling and representation to union and non-union employers in every aspect of employee relations and employment law. He also exclusively represents, counsels, and defends corporations and professional organizations in a number of labor and employment cases. With more than 30 years of experience in defense of companies in discrimination and employment related claims, Thomas also has extensive experience in handling other litigation claims, including insurance defense.

Seating is limited. RSVP at https://www.eventbrite.com/e/overtime-overhaul-preparing-for-the-new-rule-seminar-tickets-25678996570 by June 24. Please note that each person attending the seminar will have to RSVP individually using the link.

Federal Mileage Rate Change– from DWD “Mission-Minded” blog

Carrie Minnich (2) (576x800)Carrie Minnich, CPA at Dulin, Ward & DeWald Inc. recently posted about federal mileage rate change. The IRS recently released the federal mileage rates for 2016. Both the per mile rate for business and medical or moving purposes decreased. The per mile rate for charitable purposes stayed the same.

2016 rates are as follows:

54 cents per mile for business

19 cents per mile for medical or moving purposes

14 cents per mile for charitable purposes

To see Carrie’s post, click here.