PUBLIC TRUST / GOVERNMENT & NON-PROFIT
Public Perspectives E-newsletter
Current Topics
What You Don’t Know Really Can Hurt You
By Tom McGree
I tend to take chances. I guess it’s because I don’t believe I’ll be the one who falls off the roof while hanging Christmas lights or the driver who gets stuck in the snow (along with the other five cars already in the ditch).
Odds are that you—and your nonprofit—are the same way, whether you admit it or not. According to a recent article on www.law.com a 2010 study revealed that 70 percent of the organizations surveyed had not anticipated most of the risky events they experienced. Even more frightening, only 30 percent correctly estimated the impact of those events.
Not only do most of us fail to recognize the risks we and our organizations face, we also tend to underestimate our potential. As a result, we often miss huge opportunities. There is so much more your nonprofit could achieve if possibilities were recognized and people were empowered to utilize your organization’s strengths.
To fully recognize both risks and opportunities, you need a comprehensive and systematic process that helps you step back from daily demands, see the broader picture of the present, and envision your ideal future. Our team utilizes a risk and opportunity evaluation process to produce a clear map of where you are and where you want to go. This methodology helps you identify your resources and utilize the right assets in the best places. Focusing your attention on getting the most from your unique strengths means no more “hoping it won’t happen” to you and settling for average levels of success.
To start this process, you can either call our team to take advantage of the model we’ve developed or visit with your trusted advisors to obtain their help. If you do decide to move forward, remember to look broadly at your entire organization. It may be tempting to focus on one piece at a time, but this approach doesn’t take into account the interplay between various components and leaves enormous risks and opportunities unaddressed.
As always, don’t hesitate to call. We’re here to help.
Retirement Plan Limits Increase for 2012
By Holly Bander
After several years without any changes, most of the dollar limits applicable to retirement plans have increased for 2012. The Social Security taxable wage base has also increased. Here are the new limits:
- 401(k), 403(b) and 457(b) plans: The maximum elective deferral limit under IRC §402(g) for 401(k), 403(b) and 457(b) plans is $17,000. In a 457(b) plan, the limit also includes any employer contributions.
- 401(k), 403(b) and governmental 457(b) catch-up contributions: The catch-up contribution limit is $5,500 for 2012. A participant who is age 50 or older during 2012 will have a total deferral limit of $22,500 (including employer contributions for a governmental 457(b) plan).
- SIMPLE plans: The maximum elective deferral limit for SIMPLE plans for 2012 is $11,500 and the catch-up contribution limit is $2,500, so a participant age 50 or older during 2012 will have a total deferral limit of $14,000.
- Compensation limits: The maximum annual compensation amount that can be used to determine benefits or calculate contributions for a plan is $250,000.
- Annual individual contribution amounts: The maximum annual addition limit under defined contribution plans is the lesser of 100% of pay or $50,000 ($55,500 for 401(k) or 403(b) participants age 50 or older in 2012). This limit includes the sum of all contributions and forfeitures allocated to a participant’s account during the year.
- Annual defined benefit plan limit: The maximum annual payout under defined benefit plans is $200,000 at age 62 or older. This payout is the annual benefit payable to a participant receiving monthly benefits from the plan.
- Highly Compensated Employees: The compensation limit for determining Highly Compensated Employees is $115,000. Since Highly Compensated Employees are determined based on prior year compensation, this increase will impact who is highly compensated for 2013, based on 2012 compensation.
- Key Employees: The compensation limit for determining if an officer is a Key Employee is $165,000.
- Taxable Wage Base: The Social Security taxable wage base is $110,100.
IRS Announces Two Month Suspension of 990 E-Filing
By Dan Miller
The IRS recently announced that electronic filing of tax-exempt organization Forms 990, 990-EZ, 990-PF and 1120-POL will not be available January 1 through February 29, 2012. The IRS is suspending electronic filing capability in order to implement changes to IRS systems for the 2011 tax year. Form 990-N electronic postcard filing will not be affected by this temporary suspension.
According to the notice, the IRS is “granting an extension of time to file to March 30, 2012 to organizations whose due date or first extended due date is January 17 or February 15, 2012. Organizations required to file electronically may file electronically prior to January 1, 2012 or between March 1, 2012 and March 30, 2012. Affected organizations that are not required to file electronically may do the same and, alternatively, may file a paper return anytime before March 30, 2012. In addition, as described in Notice 2012-4, certain affected organizations normally required to file electronically will have the option to file a paper return during the suspension period.”
If your organization will be affected by this suspension and you’ve not previously received an extension and wish to extend your filing due date until after March 30, 2012, you may request an automatic three-month extension by filing Form 8868, Extension of Time to File an Exempt Organization Return. This filing must occur prior to the return’s original due date. If your organization has already obtained an automatic three-month extension, the IRS will grant an additional three-month extension if you properly complete and file Form 8868 by the first extended due date. Organizations that have already been granted two extensions for a total of six months may not request a further extension.
The IRS release goes on to say, “Organizations with a filing due date (or first extended due date) between January 1, 2012, and February 29, 2012 that file their returns by March 30, 2012 will be considered to have timely filed. In the case of an organization with a second extended due date that falls during the suspension period, the organization will have reasonable cause for late filing and will not be subject to late filing penalties if it files by March 30, 2012. The organization should attach a Reasonable Cause Statement to its return referencing Notice 2012-4, to avoid receiving a system-generated late filing penalty notice from the IRS. An organization generally required to file electronically that has already obtained two three-month filing extensions may be uncomfortable with taking advantage of the late filing penalty relief provided in the notice. In that circumstance, the organization may file its return on paper.”
If you have any questions regarding this change and how it affects your organization, please contact us.
To access previously published articles, please make a selection from the following dates:
September 2011:
- Unrelated Business Income Tax for Tax-Exempt Organizations: Some Common Exceptions
- Being a Great Board Member
- IRS Updates List of Organizations No Longer Tax Exempt
August 2011:
- How Can We Expect Them to Be “Committed” If We Don’t Spell Out What “Commitment” Means?
- Do Nonprofits Really Need Risk Management?
- IRS Ends Gift Tax Probe of 501(c)(4) Contributors
July 2011:
- Board Dysfunction: Why It Happens and What You Can Do About It
- Not-for-Profits Tasked with New Reporting Requirements
- Five Reasons to Use Your Vacation Leave
June 2011:
- Treasurers for Not-for-Profit Organizations: What to Look For
- Internal Accounting Controls: A Good Business Practice
- IRS Resources for Tax-Exempt Status
May 2011:
- Improving Your Fundraising Auction
- Preventing Credit Card Misuse
April 2011:
- Risk Management for Your Non-Profit: The Basics
- Employee vs. Independent Contractor: What’s the Difference and Why Is It Important?
March 2011:
- Charitable Contributions: Are We There Yet?
- Taking Meeting Minutes
February 2011:
- Try Dashboard Reporting
- 2011 Retirement Plan Limits
- And you thought “doodle” was something everyone does during boring meetings…
January 2011:
- 1099 Reporting Requirements
- Substantiating and Reporting Charitable Contributions: Part 3 of 3
- L3C? What’s That?
December 2010:
- New Credit for Small Employer Health Insurance Costs
- Substantiating and Reporting Charitable Contributions: Part 2 of 3
- Draft of New Form 990 Released
November 2010:
- New Requirement to Use EFTPS
- Substantiating and Reporting Charitable Contributions: Part 1 of 3
- Tax Exempt Organizations and Politics
October 2010:
- Expanded W-2 Reporting for Employer-Sponsored Group Health Plans Put on Hold
- State Minimum Wage Goes Up
- New In-Plan Roth Conversion Option
September 2010:
- Is Your Organization at Risk for Losing Tax Exempt Status?
August 2010:
- Onerous New 1099 Reporting Rules
- Are You Ready for GASB Statement No. 54?
July 2010:
- More Changes Ahead: The 2009 Form 990
- State and Local Government Entities and "Going Concern"
June 2010:
- It Could Happen to You
- Welcome to the Board! What You Need to Know As a New Non-Profit Organization Board Member
May 2010:
- Fiscal Sponsorship
- HIRE Act Continued: Municipal Government Bonds
April 2010:
- Internal Controls in a Small Office
- Volunteer Management
- Can Non-Profit Organizations Take Advantage of Tax Incentives in the HIRE Act?
March 2010:
- Is Your Organization Generating Unrelated Business Income?
- Mileage Reimbursement for Board Members
February 2010:
- Helpful IRS Website for Government Entities
- Ten Steps to a More Effective and Less Stressful Audit
- 2010 Employee Benefit Plan Limits
January 2010:
- New IRS Check Sheet for Not-for-Profit Exams
- Implementing Internal Controls in a Changing Economy
- Insider Theft Is on the Rise
December 2009:
- Contributions or Grants?
- Attachments to 990 Returns
- Holiday Greetings
November 2009:
- Gearing Up for Year-End Compensation Reporting
- To Balance or Not to Balance . . .
- Why Your Board Members Should Be Receiving This E-Newsletter
October 2009:
- FASB Statement 164 and the Merger or Acquisition of Not-for-Profit Entities
- IRS Sends Erroneous Request for Form 990
- Unemployed Professionals Volunteering to Keep Skills Sharp
September 2009:
- The FASB Codification Project
- Uncertainty in Income Taxes: FASB Issues Final Rules for Non-Public Companies
- Are you Using Social Networking Websites to Promote Your Organization?
August 2009:
- Talking About Fraud
- Proposed New Standards for Compliance Audits
- Simple IT Controls to Reduce Your Risk of Fraud
July 2009:
- Before You Accept: Reporting and Auditing Standards for American Recovery and Reinvestment Act Dollars
- Planning for a Single Audit
- Changes Ahead: SAS No. 115 vs. No. 112
June 2009:
- Defining Board Members' Responsibilities
- Lobbying Expenditure Limits for Public Charities
- CornerStones Conference 2009
May 2009:
- Feeling the Squeeze: Local Government in a Poor Economy
- Interpreting Form 990 Governance Disclosure Requirements
- Fraud Beat
April 2009:
- Ten Tips for Effectively Reviewing Bank Statements
- Providing Key Financial Data to Not-for-Profit Organization Board Members
- UPMIFA: How It Impacts Your Organization
March 2009:
- Penalties for Failing to File Form 990
- IRS Provides Extension to Complete Written 403(b) Plans
