Monthly Archives: June 2018

Every year is a journey for a business. You begin with a set of objectives for the months ahead, probably encounter a few bumps along the way and, hopefully, reach your destination with some success and a few lessons learned.

The middle of the year is the perfect time to stop for a breather. A midyear review can help you and your management team determine which objectives are still “meetable” and which one’s may need tweaking or perhaps even elimination.

Naturally, this will involve looking at your financials. There are various metrics that can tell you whether your cash flow is strong and debt load manageable, and if your profitability goals are within reach. But don’t stop there.

3 key areas

Here are three other key areas of your business to review at midyear:

1. HR. Your people are your most valuable asset. So, how is your employee turnover rate trending compared with last year or previous years? High employee turnover could be a sign of underlying problems, such as poor training, lax management or low employee morale.

2. Sales and marketing. Are you meeting your monthly goals for new sales, in terms of both sales volume and number of new customers? Are you generating an adequate return on investment (ROI) for your marketing dollars? If you can’t answer this last question, enhance your tracking of existing marketing efforts so you can gauge marketing ROI going forward.

3. Production. If you manufacture products, what’s your unit reject rate so far this year? Or if yours is a service business, how satisfied are your customers with the level of service being provided? Again, you may need to tighten up your methods of tracking product quality or measuring customer satisfaction to meet this year’s strategic goals.

Necessary adjustments

Don’t wait to the end of the year to assess the progress of your 2018 strategic plan. Conduct a midyear review and get the information you need to make any adjustments necessary to help ensure success. Let us know how we can help.

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Langdon & Company LLP is pleased to announce the promotion of Rebecca Lunn to audit manager.  Rebecca joined Langdon & Company LLP in 2014 and has over seven years of public accounting experience including work for Cherry Bekaert LLP in their Raleigh, NC office.  She is a graduate of Elon University with a Bachelor of Science and North Carolina State University with a Masters of Science in Accounting. 

Rebecca provides audit and attest services to clients primarily in the nonprofit, healthcare and small business industries.  She is an active member of the American Institute of Certified Public Accountants, the North Carolina Association of Certified Public Accountants, and the Young Professional Network of the Greater Raleigh Chamber of Commerce.

Join us in congratulating Rebecca!

Your not-for-profit probably already ensures that donors receive a receipt with information about claiming a charitable contribution deduction on their tax return. But your obligations may go further than that. For noncash donations, you might have responsibilities related to certain tax forms.

Form 8283 for donors

When filing their tax returns, donors must attach Section A of Form 8283, “Noncash Charitable Contributions,” if the amount of their deduction for all noncash gifts is more than $500. Only when a single noncash contribution is greater than $5,000 does the donor need to complete Section B, which must be signed by an official of the organization receiving the donation or another person designated by that official. When you return a Schedule B to a donor, the donor should provide you with a full copy of Form 8283.

Donors usually must obtain an appraisal for donated property over $5,000. However, your official’s signature on Section B doesn’t represent concurrence with the appraised value of a donation. It merely acknowledges receipt of the described property on the date specified on the form.

Form 8282 for nonprofits

Your organization generally needs to file Form 8282, “Donee Information Return,” with the IRS if you sell, exchange or otherwise dispose of a donated item within three years of receiving the donation. File the form within 125 days of the disposition unless:

• The item was valued at $500 or less at the time of the original donation, or

• The item was consumed or distributed without compensation in furtherance of your exempt purpose. For example, a relief organization that distributes donated medical supplies while aiding disaster victims isn’t required to file Form 8282.

You also must provide a copy of Form 8282 to the donor. When a donated item is transferred from one nonprofit to another within three years, the transferring organization must provide the successor with its name, address and tax identification number, a copy of the Form 8283 it received from the original donor, and a copy of the Form 8282 within 15 days after filing with the IRS.

Avoidable consequences

Failing to file required forms can lead to IRS penalties. While your organization may be excused if you show the failure was due to reasonable cause, your donor still stands to lose the tax deduction — a result neither of you want. Contact us if you have questions.

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Employees don’t always fill out their W-4 forms accurately. For example, some may wrongly write “exempt” on the withholding portion of the form to ensure that no federal or state tax is withheld. Others may be inadvertently underwithholding because of recent tax law changes.

Although the employees themselves are liable for improperly completing their W-4s, you can do them a favor by reminding them of possible mistakes. After all, the IRS may eventually come calling on your organization if someone appears to be underwithholding.

Key questions

Here are some questions to ask when determining whether an employee can legitimately claim to be exempt from withholding:

Did the employee have a tax liability in the previous year? If the employee received a refund of all federal income tax paid (or had a right to a refund), he or she may be able to claim exempt status, depending on the answer to the next question.

Does the employee expect to have a tax liability this year? To legitimately claim to be exempt, the employee must be able to state that he or she had no tax liability last year and doesn’t expect to have a tax liability this year.

Also, an “exempt” W-4 is valid for only one year and expires in February of the following year. If your payroll includes employees who claim to be exempt, require them to fill out new W-4 forms annually.

TCJA impact

Because of the many changes wrought by the Tax Cuts and Jobs Act (TCJA), and as you’re likely aware, earlier this year the IRS issued new withholding tables — and withholding amounts have generally dropped. The new tables are intended to work with current W-4 forms. However, just because you’re correctly following the withholding tables for an employee doesn’t mean the employee isn’t having too little (or too much) tax withheld.

Remind all employees that they should use the new IRS calculator (available at irs.gov) to determine whether the appropriate amount is being withheld. If it isn’t, they should submit a new W-4 to you to adjust their withholding. Employees who may be at risk for underwithholding include those who itemize deductions, who hold multiple jobs, or who have dependents age 17 or older.

More changes ahead

IRS Form W-4 is currently in a bit of a state of flux. A new version of the form is expected for 2019 that more clearly reflects the TCJA’s provisions. Some of the applicable rules for filing the form could change along with it. Our firm can keep you apprised of the latest news affecting W-4s and help you gather and verify the right information.

© 2018