Usually, records that support an item of income, deduction, or credit must be kept for a minimum of 3 years from the date the return is due or filed, whichever is later. Keep records that verify the organization’s basis in property for as long as they are needed to figure the basis of the original…
Continue reading ...See also Line 5 next for additional individuals who must be reported on Schedule J (Form 990), Part II. Management companies and similar entities that are independent contractors shouldn’t be reported as key employees. The organization’s top management official and top financial official are deemed officers rather than key employees. D is also a partner…
Continue reading ...Organizations that report more than $15,000 total on lines 1c and 8a must also answer “Yes” on Part IV, line 18, and complete Part II of Schedule G (Form Accounting For Architects 990). A section 501(c)(3) organization that is an S corporation shareholder must treat all allocations of income from the S corporation as unrelated…
Continue reading ...Ownership is measured by stock ownership (either voting power or value, whichever is greater) of a corporation, profits or capital interest in a partnership or an LLC (whichever is greater), membership interest in a nonprofit organization, or beneficial interest in a trust. Ownership includes indirect ownership (for example, ownership in an entity that has ownership…
Continue reading ...Review all of the costs you incur, and identify areas where costs can be reduced. If you can purchase a product through multiple suppliers, you can force the suppliers to compete for your business and offer lower prices. We shall add sales and other income and deduct everything else except for interest expenses. Adam Hayes,…
Continue reading ...It’s essential to fine-tune these numbers as they send a strong message about the company’s financial stewardship and future prospects. By now, you might appreciate the seamless interaction between the income statement and statement of retained earnings—an ensemble cast where each has a vital role in telling the financial story. Factor in net income like…
Continue reading ...Unappropriated retained earnings have not been earmarked for anything in particular. They are generally available for distribution as dividends or reinvestment in the business. This means the company was able to generate $5 in market value for each dollar of earnings it retained. Had the company used debt capital instead, they’d have generated less value…
Continue reading ...For instance, when a creditor would like to see the amounts that Kaitlin put into her business and the amounts that she withdrew throughout the year. If Kaitlin were to keep putting money into the business, it would typically indicate that the business can’t fund its own operations. The statement of owner’s equity is the second report…
Continue reading ...To make matters even more complex, businesses must comply with not only the FLSA, but also the wage and hour laws in state and local jurisdictions. When these regulations differ, employers have to apply the overtime pay rate that is most favorable to the employee. If your employees routinely work overtime and you need help…
Continue reading ...Calculating overtime pay for salaried employees can be a bit more complex than for hourly employees. Salaried employees receive a fixed salary, regardless of the number of hours they work. However, they might still be eligible for overtime pay under certain circumstances, especially if they are classified as non-exempt employees according to labor laws. Set…
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