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Tax-wise ways to take cash from your corporation while avoiding dividend treatment

If you want to withdraw cash from your closely held corporation at a low tax cost, the easiest way is to distribute cash as a dividend. However, a dividend distribution isn’t tax efficient since it’s taxable to you to the extent of your corporation’s “earnings and profits,” but it’s not deductible by the corporation. 5 […]

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A cost segregation study may cut taxes and boost cash flow

Is your business depreciating over 30 years the entire cost of constructing the building that houses your enterprise? If so, you should consider a cost segregation study. It may allow you to accelerate depreciation deductions on certain items, thereby reducing taxes and boosting cash flow. Depreciation basics Business buildings generally have a 39-year depreciation period

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Don’t be surprised by a sudden influx of support

Disaster-relief charities have long contended with sudden influxes of attention and donations. But any nonprofit could face this enviable “problem.” While your nonprofit is in a period of relative calm, consider how you might handle it. For example, track normal website traffic so you’ll recognize when interest in your organization is surging. Make sure you

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Arm your nonprofit against financial threats

Whether it’s inflation, trouble finding staffers in a tight labor market or cybersecurity, nonprofit leaders have a lot to worry about. Even though the economy is generally healthy, you can strengthen your not-for-profit to help withstand future challenges. First, keep an eye on cash. Routinely prepare cash and expense projections and review regular reports on

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Got independent contractors? Get to know Form W-9

If your not-for-profit is shorthanded, you may decide to engage independent contractors to pick up some of the slack. Just make sure you’re collecting the right information. Organizations need a completed Form W-9 for every nonemployee they pay for services. Obtain this information before you pay contractors’ invoices. If a contractor doesn’t provide you with

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Encouraging charitable donors to include you in their estate plans

Planned, legacy or deferred gifts are often larger than current donations, so not-for-profits can’t afford to neglect pursuing them. These gifts generally are made through wills and living trusts, retirement plan and life insurance beneficiary designations, or via more complex charitable annuities and trusts. Include information about planned gifts on your website and in promotional

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Plan now to reimburse staffers, board members and volunteers

Even if your not-for-profit rarely needs to reimburse staffers, board members or volunteers, reimbursement requests almost certainly will come up. A reimbursement policy will make the process easier and reduce the risk of any disagreements. Policies generally fall into one of two categories: accountable or nonaccountable. Reimbursements under an accountable plan generally aren’t taxable for

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Making the most of your nonprofit’s social media accounts

Even though social media is generally free or low cost, your not-for-profit should apply staffing resources to it wisely. Review and potentially revise your social media strategy at least once a year, prioritizing frequent posting to platforms your supporters use most. If you don’t have a social media policy, create one that outlines what can

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Coordinating Sec. 179 tax deductions with bonus depreciation

Your business should generally maximize current year depreciation write-offs for newly acquired assets. Two federal tax breaks can be a big help in achieving this goal: first-year Section 179 depreciation deductions and first-year bonus depreciation deductions. These two deductions can potentially allow businesses to write off some or all of their qualifying asset expenses in Year 1.

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Why uncertainty calls for a more flexible budget

When times are turbulent, your not-for-profit’s budget could end up falling short. Even if you’ve already made a fixed budget for 2024, consider taking a different approach in the future. You might, for example, write a rolling budget, with periodic dates (such as quarterly) when you adjust numbers according to circumstances. A more dramatic approach

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