Financial Technologies & Management- E-Newsletter for January

Upcoming Live Webinars

Dear {CONTACT.SALUTATION} 

We hope you find our monthly E-Newsletter useful for your nonprofit organization. We are pleased to provide you with access to our knowledge articles and live webinars!!

These live webinars will help Nonprofit Leaders, Treasurers, Executive Directors, Finance Directors, Finance Staff, and other Nonprofit Staff.

Our upcoming live webinars for financial management training are broken into the following areas: Nonprofit Financial Forum, Nonprofit Finance Certificate, MIP Fund Accounting, and Financial Management Training.  We are planning our 2024 calendar so stay tuned.

Please contact us if you have any questions or feedback.  Feel free to check out our FTM blog or book a meeting on my calendar.

Best Regards,

James Simpson, CPA, CFE, CITP, and CGMA.

1099-NEC, 1099-MISC, W2, & W3 due January 31st 

Employers must file wage statements and independent contractor forms by Jan. 31st.  Starting in 2023, the E-file threshold reduced to 10.   If your organization has 10 or more forms collectively, you must E-file includes W-2, 1099, 1095, and any other tax form.

Certain Forms 1099-NEC, Nonemployee Compensation, filed with the IRS to report non-employee compensation to independent contractors are also due at this time. Such payments are reported in box 1 of this form.

The early filing date means that the IRS can more easily detect refund fraud by verifying income that individuals report on their tax returns. Employers can avoid penalties by filing the forms on time and without errors. The IRS recommends e-file as the quickest, most accurate and convenient way to file these forms.

Hopefully, you collected your W-9 forms from independent contractors to whom you paid $600 or more this year.  The information on W-9’s can help you compile the information you need to send 1099-MISC and 1099-NEC to recipients and file them with IRS.  Here is a link to the Form W-9 that you would need to request your contractors and vendors to complete.

1099-MISC and 1099-NEC forms generally don’t have to be provided to corporate services providers, although there are exceptions.   Corporate service providers would include C or S Corporation including a limited liability corporation (LLC).

Please click the full article which includes links to forms and what to do to avoid information return penalties.

5 Common Nonprofit Tax MIstakes to Avoid

For nonprofit organizations, navigating the complex landscape of tax regulations is a crucial aspect of maintaining financial health and ensuring compliance with legal requirements. However, the intricacies of nonprofit tax laws can be challenging to navigate, and mistakes in this area can have serious consequences.

We'll discuss five common nonprofit tax mistakes that organizations should be aware of and take steps to avoid.

1. Failure to Maintain Proper Documentation-Need to implement robust record keeping systems to track financial transactions.
2. Misclassification of Employees and Independent Contractors-Nonprofits need to understand criteria to differentiate between employees and independent contractors to avoid penalties and legal issues.
3. Incomplete or Incorrect Form Filing-Tax Forms, such as Form 990, need to be filed out accurately and timely to avoid penalties and jeopardize tax-exempt status.
4. Engaged in Prohibited Activities-Must not engage in prohibited activities such as excessive lobbying or political campaigns can risk losing tax exempt status.
5. Inadequate Governance and Oversight-Board plays critical role to ensure organization complies with tax laws and address issues with financial activities 

Staying informed about tax laws and implementing best practices can help nonprofits avoid common tax management mistakes.

Please click the full article for more information regarding the 5 common nonprofit tax mistakes.

Eight reasons to outsource your Nonprofit Accounting

The current employment market has nonprofits looking more externally to obtain necessary accounting talent and seeing significant increases and retention issues with internal accounting staff.

With limited resources, a nonprofit can outsource some or all its financial functions, which can help a nonprofit efficiently staff and conduct its financial operations. It also respects the board and executives limited time or expertise to manage the finance functions.

Many nonprofits lack the funds to hire a full-time accountant and usually hire an unqualified and untrained employee ends up performing the accounting role with no backup plan if this employee leaves the organization.

Here are eight overlooked reasons to outsource accounting

1. Improved efficiencies
2. Reduce costs
3. Reduced fraud threats
4. Higher level of expertise
5. Ability to scale
6. Accounting software expertise
7. Manage your finance and accounting function
8. Stay current with regulations and laws

Please click the full article for detailed description of these eight reasons.

MIP Fund Accounting Update-Year End 1099 & W2

Getting Ready for Year End!!  Contact us to have our firm prepare your year end W2's and 1099's tax forms.

MIP Fund Accounting version 2023.X is now available for download with KB29086

The E-file threshold reduced to 10 for 2023.   If you organization has 10 or more forms collectively, you must E-file includes W-2, 1099, 1095, and any other tax forms. 

MIP has a seamless integration with Aatrix.com to produce tax forms.  Organization's must enroll with Aatrix.com either prior to or during the creation of the tax form files and submit their electronic file 2 business days prior to the deadline.  The IRS now requires a First and Last Name for vendors using an SSN so you will need to complete or import this data on the Vendor 1099 Information Tab to prevent errors in the Aatrix grid.

We are pleased to provide 7 essential 1099 preparation steps in steps in MIP to assist you with the necessary preparation steps prior to producing your 1099-NEC and 1099-MISC tax forms.  MIP Knowledge Base Articles are valuable resources for 1099 information including the following resources including 2023 1099-NEC User Guide, 2023-MISC User Guide, and 2023 W2 Customer Guide.

Please click for the full article for MIP Software Services.

Our firm provides all the levels of accounting your nonprofit needs including bookkeeping, accounting, controller, CFO, and software advisory services for nonprofit accounting software including MIP, Microix, QuickBooks, Sage Intacct and AccuFund

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