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Steer Clear of the Trust Fund Recovery Penalty
If you own or manage a business with employees, you may be at risk for a severe tax penalty. It’s called the “Trust Fund Recovery Penalty” because it applies to the Social Security and income taxes required to be withheld by a business from its employees’ wages. Because the taxes are considered property of the…
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Businesses: Get Ready for the New Form 1099-NEC
There’s a new IRS form for business taxpayers that pay or receive nonemployee compensation. Beginning with tax year 2020, payers must complete Form 1099-NEC, Nonemployee Compensation, to report any payment of $600 or more to a payee. Why the new form? Prior to 2020, Form 1099-MISC was filed to report payments totaling at least $600…
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Businesses: Get Ready for the New Form 1099-NEC
There’s a new IRS form for business taxpayers that pay or receive nonemployee compensation. Beginning with tax year 2020, payers must complete Form 1099-NEC, Nonemployee Compensation, to report any payment of $600 or more to a payee. Why the new form? Prior to 2020, Form 1099-MISC was filed to report payments totaling at least $600…
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Even if No Money Changes Hands, Bartering is a Taxable Transaction
During the COVID-19 pandemic, many small businesses are strapped for cash. They may find it beneficial to barter for goods and services instead of paying cash for them. If your business gets involved in bartering, remember that the fair market value of goods that you receive in bartering is taxable income. And if you exchange…
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Why Do Partners Sometimes Report More Income on Tax Returns than They Receive in Cash?
If you’re a partner in a business, you may have come across a situation that gave you pause. In a given year, you may be taxed on more partnership income than was distributed to you from the partnership in which you’re a partner. Why is this? The answer lies in the way partnerships and partners…
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To Find New Revenue Opportunities, Think Like an Auditor
Want to increase your not-for-profit’s revenue? First try analyzing current income as a professional auditor might. Then, you can apply your conclusions to setting annual goals, preparing your budget and managing other aspects of your organization. Compare contributions Compare the donation dollars raised inpast years to pinpoint trends. For example, have individual contributions been increasing…
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Main Street Lending Program Now Open to Nonprofit Applicants
Last week, the Federal Reserve announced that not-for-profit organizations now may apply for loans under the $600 billion Main Street Lending Program. Previously open only to for-profit businesses with more than 100 employees, the program offers low-interest loans with relatively relaxed repayment terms. If your organization needs funding to keep operating during this difficult period, a…
