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Charitable Assistance

By CarolCarrie / November 26, 2018 /
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Jean Ryan started a nonprofit organization called Bridges for Heroes to help veterans and their families with the cost of health insurance, co-pays and deductibles. Does Bridges for Heroes qualify as a 501(c)(3) organization? Is this type of help considered charitable assistance? A Little Background The IRS states, “To be tax-exempt under section 501(c)(3) of the…

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Entering Payroll Expenses: Problems and Solutions

By CarolCarrie / November 12, 2018 /
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One of the biggest, if not THE biggest expense for many nonprofit organizations is payroll. We often see problems in the way payroll expenses are entered into the books of nonprofit organizations. Here are a few common mistakes: Gross wages, payroll taxes and payroll service fees are mixed up in the same account. Payroll tax…

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Nonprofit Expenses

By CarolCarrie / November 5, 2018 /
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Our Chart of Accounts Grand Tour now winds its way into nonprofit expenses. Nonprofit expenses are in many ways similar to those of a regular for-profit company. Payroll, office supplies, rent, and other expenses are commonly found in nonprofit organizations. This post will give an overview of the nonprofit expense landscape, starting with… Distinguishing Expense…

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Nonprofit Income Accounts: Special Events Part II

By CarolCarrie / October 29, 2018 /
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Last week we laid out a simple accounting framework for special events: Special Events (parent account, not for data entry) – Special Event Income (sub account of Special Events) – Special Event Direct Costs (sub account of Special Events) The above framework accounts for all special event income in the Special Event Income account and…

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Nonprofit Income Accounts: Special Events Part I

By CarolCarrie / October 22, 2018 /
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What’s the number one accounting question on everyone’s mind about a special event? “How much did we make?” of course! We are talking about events that are primarily fundraisers, not events held to further the organization’s exempt purpose. It gets complicated when you have events for both program and fundraising purposes, but we’ll tackle that…

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Nonprofit Income Accounts Part 4: Merchandise Sales

By CarolCarrie / October 15, 2018 /
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“Hey, I have a great fundraising idea. Let’s sell {insert merchandise} to raise money!” Sometimes this can truly be a great idea. And it may be worth pursuing. Just proceed with full knowledge of what you are getting into. Selling merchandise involves a different type of accounting. In fact, it involves a lot of different activities.…

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A Plan to Keep Public Charity Status

By CarolCarrie / October 8, 2018 /
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Congratulations if your organization has achieved 501(c)(3) public charity status! Now what is your plan to keep it? Public Charity or Private Foundation? Organization founders are usually focused on obtaining 501(c)(3) status. Most likely they want to be a special type of 501(c)(3) – a public charity. The alternative is to be classified as a…

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Handling Deposits Net of Fees  

By CarolCarrie / October 1, 2018 /
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Recently we received a question about how to handle deposits that come into the bank account net of fees. Since we are in the midst of covering income accounts on our Chart of Accounts Grand Tour, now seems like a great time to cover this topic. Here is an example:  A donation of $100 is…

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Nonprofit Income Accounts Part 3: In-Kind Donations

By CarolCarrie / September 24, 2018 /
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In the last few posts we have been talking about contribution income and the kinds of income accounts you need. Our Chart of Accounts Grand Tour travels through in-kind donation income accounts today. In-kind donations are one of the more confusing and difficult areas for nonprofits. And that’s unfortunate because in-kind donations are so common.…

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Contributions Under the New Tax Law

By CarolCarrie / September 17, 2018 /
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How will the new tax law affect charitable giving? Are there any tax breaks left for donors? Our friends and income tax experts, Lou Lauteria and Greg King at Lauteria & King, PLC, sent out a client alert to explain. We reprint their explanation below, which includes a great idea for your donors, then add…

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