Sechler CPA, Hot Stuff

Here's the Latest

Automatic Revocation of Nonprofits' Tax-Exempt Status by Guidestar (pdf)

Article: Arizona Non-Profit (Tax-Exempt) Organizations Registration & Reporting Word doc | PDF

UPDATE:
Arizona will change the way they collect their state income tax withholding on all wages paid after June 30, 2010. The amount required to be withheld will no longer be a percentage of federal withholding, instead it will be based on a table. The state has prescribed a withholding table based on a percentage of gross taxable wages.

Employees subject to Arizona income tax withholding must fill out a new form that will go into effect on July 1, 2010, and give the completed form to their employer.

You may find the revised A-4 (Arizona Withholding Percentage Election) form on the Withholding Forms page.

New A-4 form (pdf)
A-4 Instructions

In the past, Arizona payroll withholding rates for employees were based on the amount withheld for federal taxes. To compute the amount to withhold, the employer multiplied the rate (10.7% - 39.5%) times the total federal taxes withheld.

As of 7/1/10, the Arizona payroll withholding rates for employees will no longer be calculated on the amount of taxes withheld for federal income tax. Starting 7/1/10, the employee with calculated the amount to withhold by using the new rate (1.30% - 5.10%) times the gross wages.

The table below gives the suggested percentage to use under the new system as compared to the rates used currently.

View the new A-4 form (pdf) that you should have each employee complete before 7/1/10 to document the new withholding rate for each employee. When you have the new forms prepared, please copy me with the forms and we will updated them in the payroll system.

Carolyn Sechler

If the Employee's withholding rate before July 1, 2010, was:	Then use this rate for wages paid after June 30, 2010:
0%	0%
10.70%	1.30%
20.30%	1.80%
24.50%	2.70%
26.70%	3.60%
33.10%	4.20%
39.50%	5.10%

How to Report Raffle Winnings

Hire Act Information: Download the tax form and information here.
Documentation of Hire Act (Word doc)
IRS Form W-11 (pdf)

Hiring Incentives to Restore Employment Act of 2010

The President recently signed into law the "Hiring Incentives to Restore Employment Act of 2010" (the 2010 HIRE Act), the centerpiece of which is a payroll tax holiday and up-to-$1,000 tax credit for businesses that hire unemployed workers. Here's an overview of these new hiring incentives.

To help stimulate the hiring of workers by the private sector, the new law exempts any private-sector employer that hires a worker who had been unemployed for at least 60 days from having to pay the employer's 6.2% share of the Social Security payroll tax on that employee for the remainder of 2010. A company could save a maximum of $6,621 if it hired an unemployed worker and paid that worker at least $106,800 - the maximum amount of wages subject to Social Security taxes - by the end of the year. As an additional incentive, for any qualifying worker hired under this initiative that the employer keeps on payroll for a continuous 52 weeks, the employer is eligible for an additional non-refundable tax credit of up to $1,000 after the 52-week threshold is reached, to be taken on their 2011 tax return. In order to be eligible, the employee's pay in the second 26-week period must be at least 80% of the pay in the first 26-week period.

Workers hired after the date of introduction of the legislation (Feb. 3, 2010) are eligible for the payroll tax forgiveness and the retention bonus, but only wages paid after the date of the new law's enactment receive the exemption for payroll taxes.
Here are some additional features of the new hiring incentive:

The tax benefit of the new incentive is immediate. It puts money into a business' cash flow immediately, since the tax is simply not collected in the first place.
The tax benefit generally applies only to private-sector employment, including nonprofit organizations-public sector jobs are generally not eligible for either benefit. However, employment by a public higher education institution would qualify.
There is no minimum weekly number of hours that the new employee must work for the employer to be eligible, and there is no maximum on the dollar amount of payroll taxes per employer that may be forgiven.
For workers that would otherwise be eligible for the "Work Opportunity Tax Credit," the employer must select one benefit or the other for 2010 - no double dipping.
An employer can't claim the new tax breaks for hiring family members.
A worker who replaces another employee who performed the same job for the employer is not eligible for the benefit, unless the prior employee left the job voluntarily or for cause.
For the hiring to qualify, the new hire must sign an affidavit, under penalties of perjury, stating that he or she has not been employed for more than 40 hours during the 60-day period ending on the date the employment begins.
The incentive is not biased towards either low-wage or high-wage workers. Under the measure, a business saves 6.2% on both a $40,000 worker and a $90,000 worker.
The payroll tax holiday does not apply with respect to wages paid during the first calendar quarter of 2010, but the amount by which the Social Security payroll tax would have been reduced under the payroll tax holiday provision during the fist calendar quarter is applied against the tax imposed on the employer for the second calendar quarter of 2010.
The Act creates a similar new set of rules permitting a payroll tax holiday for railroad retirement tax purposes.
The credit for retaining qualifying new hires is the lesser of $1,000 or 6.2% of the wages paid by the taxpayer to the retained worker during the 52-consecutive-week period. Thus, the credit for a retained worker will be $1,000 if, disregarding rounding, the retained worker's wages during the 52-consecutive-week period exceed $16,129.03. However, the credit is not available for pay not treated as wages under the Code (e.g., remuneration paid to domestic workers).

I hope this information is helpful. If you would like more details about these provisions or any other aspect of the new law, please do not hesitate to call.

Board of Directors Guide to Form 990 (pdf)

Raffles in Arizona (pdf)

IRS: Announcement 2009-62
Procedures for Section 509(a)(3) Supporting Organizations to Change Public Charity Classification

IRS agents will be using this form in the coming year to evaluate Good Governance of nonprofit organizations

2010 Mileage Rates

Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

50 cents per mile for business miles driven
16.5 cents per mile driven for medical or moving purposes
14 cents per mile driven in service of charitable organizations

The new rates are slightly lower than last year. The business rate is the standard rate used for reimbursement of employee mileage by businesses.

IRS Rules on Raffles (see pdf file)

IRS Non-Profit application fees are changing! (see pdf file)

Poker Tournaments, Charitable Gambling, Social Gambling (casino nights) for nonprofits in AZ

Value of Volunteer Time : The Estimated Dollar Value of Volunteer Time is $20.25/hour

Pay what you can afford - Computer Training

Where's my Refund?

Carolyn Sechler's Profile | Create Your Badge

ASCPA - The Nonprofit Budgeting Process (PDF)

Federal Filing Requirements for Exempt Organizations

Tax Legislation: American Recovery and Reinvestment Act of 2009 is signed into law

Recent presentation on the new governance rules and 990 update for nonprofits

Latest news and samples on policies required in the coming year.

More Policies (Word documents)

Samples of required policies for Non-Profits (Form 990) - required before returns can be filed.

www.Random.org: RANDOM.ORG offers true random numbers to anyone on the Internet. The randomness comes from atmospheric noise, which for many purposes is better than the pseudo-random number algorithms typically used in computer programs. People use RANDOM.ORG for holding draws, lotteries and sweepstakes, to drive games and gambling sites, for scientific applications and for art and music. The service has been operating since 1998 and was built and is being maintained by Mads Haahr who is a Lecturer in the School of Computer Science and Statistics at Trinity College, Dublin in Ireland.

Audit rules are changing..: Sandi on our team has provided some helpful hints..

Care & Training of a Successful Audit (pdf)
Questions for the Auditors (pdf)

Form W-9: This is a form issued to independent contractors and attorneys (even if incorporated) so that you can complete their form 1099 at year end.

Employee vs. Contractor (pdf)

Employer ID Number: You can now complete an online application for your employer ID number (form ss-4) using the link above.

Investment Policy (Word doc): Useful template for organizational investment policy. Complements of Rebecca Kenyon

Gift Acceptance Policy (Word doc): This gift acceptance policy template will provide guidelines to representatives of who may be involved in the acceptance of gifts. Complements of Rebecca Kenyon

Virtual Office Documentation: Virtual CPA Office (Word document)
Leveraging with Technology - The impetus is a commitment to reducing costs while improving service, communications and quality of life.

Running a Virtual Office (Power Point presentation)

New Annual Electronic Notice — e-Postcard (Form 990-N) (PDF file): Frequently Asked Questions
April 3, 2007

Sample Whistleblower Policy: Provided by: Jeffrey S. Tenenbaum, Esq.
...this policy aims to provide an avenue for employees to raise concerns and reassurance that they will be protected from reprisals or victimization for whistleblowing...

Sample Whistleblower Tracking Report (Word Document): A key defense against fraud occurring in an organization is the availability of a means for employees and other constituents to anonymously report suspected wrongdoing (whistleblowing).

Sample Request for Proposal Letter for CPA Services (Word Document): This tool contains sample language that may be used by an organization requesting a proposal letter from qualified CPA firms when seeking a new service provider. As such, the sample letter may be subject to audit committee review or discussion, if an audit committee exists.

Stay Exempt: This is a new irs site and resource center to help nonprofits retain their status and understand the rules.

: A large resource of information for Tax, Business and Financial strategies.

Residential Energy Credits: Residential Energy Credits for this tax year such as insulation, windows/doors, solar, air conditioning, etc.

Standards and Best Practices - Courtesy of the fine folks at ECFA and Dan Busby in particular

Independent Contractor vs. Employee (pdf document): "IRS reminds businesses to to classify workers correctly." June, 2006
A great piece from the IRS with a test on how to classify the new person on your team.