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5 Tips To Protect Your Financial Future

With the ever-changing tax laws, our principal members and staff work diligently to stay up-to-date and keep you informed of strategies that can help save and protect your financial future. As you’re gathering your tax documents, consider some of the tips below that can significantly help in protecting your future!

1. Determine which type of IRA is best for you.

If you’re fairly young, expect to be in a similar tax bracket when you retire, or are concerned about cash flow during retirement, the Roth IRA might be best for you. If you’re older and expect to be in a lower tax bracket, you may be a candidate for a deductible IRA.

For a side-by-side comparison of Traditional and Roth IRAs, click here.

2. Think about the best ways to gradually transfer your estate tax-free.

Consider establishing a gifting program under which you and your spouse can transfer a combined $28,000 each year to any number of recipients.

3. Contribute the maximum amount allowable to a tax-deferred retirement plan.

This includes “catch-up” contributions if you are 50 or older.

4. Create a business succession plan.

On average, only one in three closely held businesses successfully passes on to the next generation.

Click here for succession planning ideas and ways that you can help protect your company’s future.

5. Set up a trust to meet your long-term financial goals.

To get started, view these commonly used trusts.

For other tips and ways to protect your financial future, contact us today for your no-cost consultation!

Non-Profit Tax Guide: Getting To Know The Form 990

The Form 990 is a tax document that tax-exempt nonprofit organizations are required to file each year with the IRS. The 990 discloses potential conflicts of interest, regulatory details, governance, compensation of board members and staff, and other details that relate to financial accountability. Filing the 990 correctly and in a timely matter, allows your nonprofit organization to maintain its tax exempt status. Once the 990 is filed, it is posted for the public to see. Websites such as Guidestar.com allow anyone to look at any organization’s Form 990, in order to get a better understanding of the structure and success of the nonprofit organization.

What’s the purpose of the Form 990?
  • Increased transparency and to provide a realistic view of the organization for the IRS and the public
  • Promote tax compliance by accurately reflecting the organization’s operations
  • Allow efficiency in the assessment of risk of noncompliance

The Form 990 has caused dramatic increases in the cost of compliance for nonprofits. At first, this only impacted the larger nonprofits. However, the smaller nonprofits are now feeling the increased cost of the 990.

Who is required to file a Form 990?

Tax-exempt organizations that have gross receipts totaling at least $200,000 or assets worth at least $500,000 must file the Form 990 on an annual basis.

When is the Form 990 Due?

You must file your organization’s 990 by the 15th day of the 5th month after your accounting period ends. For example, say your fiscal year ends on December 31st, then the 990 is due on May 15th the following year.

What are the penalties for not filing a Form 990?

There are many penalties for failing to file the Form 990 properly.  The list of penalties below can help you be prepared in order to avoid them.

  • The Penalty for not filing is: $20 per day, up to a maximum of $10,000 or 5% of revenue.
  • If revenue is greater than $1 million the penalty for not filing is: $100 per day with a maximum fine of $50,000
  • For failure to include information concerning liquidation, dissolution, termination, or substantial contraction: $10 per day, with maximum of $5,000.
  • Your “tax-exempt” status will be revoked if you don’t file for 3 years.
  • Once you receive an IRS notice and don’t respond: $10 per day on the responsible individual, up to a maximum of $5,000.
  • Failure to comply with public disclosure requirements: $20 per day in penalties, up to a maximum of $10,000.
  • There is no maximum penalty for failure to disclose the organization’s exemption application.
How to be prepared for the Form 990?

Being prepared is the best way to handle any tax situation.  Being proactive and having a tax plan minimizes the risk of any last minute tax surprises and allows you to be a little more stress-free when it comes time to file your Form 990 on an annual basis.  Below is a list of suggestions to help you be prepared when filing your Form 990.

  • Make sure you document as much as possible throughout the year for internal purposes.
  • Track as much information as possible from contributors, including amount, name, location, how they contributed, etc.
  • Track the revenue and expense by each event or by function.
  • Tip: Unrelated business tax income is a big issue!  If it’s not part of the core function, it is probably taxable.
  • Consult your CPA for specifics to your organization.  Every nonprofit organization is different and has different issues.

LBA Haynes Strand has handled the Form 990 for many North Carolina based nonprofit organizations, and our team is well versed in the nonprofit industry. Our nonprofit accounting team is ready to help your organization maintain its tax-exempt status and provide the accounting advice you need throughout the year to run a successful nonprofit. Contact us today!

Top Ways To Spend The 4th of July in Charlotte

If you are new to Charlotte or just simply want to find an exciting new way to spend your 4th of July, the events listed below are some of the top ways to spend your holiday! Since the holiday falls on a weekend this year, you will find great events on both Friday, July 3rd and on Saturday, July 4th.

Friday, July 3rd

Charlotte Symphony Orchestra Celebrate America

Where: Symphony Park at Southpark

Time: 5:00pm – 10:00pm

Description: Enjoy a picnic with your friends and family, listen to the Charlotte Orchestra play patriotic favorites, and top it all off with a top notch firework show following the concert! Buy Tickets Now

Saturday, July 4th

US National Whitewater 4th of July Festival

Where: US National Whitewater Center

Time: All Day Event

Description: Enjoy the outdoor adventure and ambiance of the US Whitewater Center, while enjoying live music followed by a spectacular firework display!  Bring your lawn chairs and blankets as seating is limited! View Details Here

SkyShow 2015 July 4th Spectacular

Where: BB&T Ballpark

Time: Gates Open at 5pm

Description: Watch as Team USA takes on Team Cuba at BB&T Ballpark in uptown Charlotte.  There will be pregame festivities including live music, food, and games that are fun for the whole family.  After the game you will be treated to one of the very best firework shows in the Carolinas.  Buy Tickets Now

These are some of the most popular events in the Charlotte area.  However, there are other events that are highly recommended as well, including:

Matthews, NC: July 4th – People’s Parade and Concert from 5pm – 9pm

Mint Hill, NC: July 3rd – Queen City Brass Band Concert – starts at 7pm

Waxhaw, NC: Waxhaw’s July 4th Celebration – Festivities begin at 10am and finish with fireworks at 9:15

Enjoy your 4th of July weekend with your family and friends and remember to stay safe!  If you are handling fireworks, click here for important safety tips!

Top 25 Largest General Contractors in Charlotte

Congratulations to the “Top 25 Largest General Contractors” in the Charlotte, NC region! This ranking was reported by The Charlotte Business Journal and was based off of local billings in 2014. To take a look at the companies, click the individual links below.

Top 25 Largest General Contractors
  1. Turner Construction Co.
  2. Balfour Beatty US
  3. Choate Construction Co.
  4. The Whiting-Turner Contracting Co.
  5. JE Dunn Construction
  6. Blythe Development Co.
  7. Blythe Construction Inc.
  8. Rodgers Builders Inc.
  9. Shelco LLC
  10. Adolfson & Peterson Construction
  11. Vannoy Construction
  12. A M King
  13. Samet Corp.
  14. Carocon Corp.
  15. Edifice Inc.
  16. Myers & Chapman Inc.
  17. Matthews Construction Co., Inc.
  18. G.L. Wilson Building Co.
  19. Robins & Morton
  20. Hickory Construction Co.
  21. Doerre Construction Co., LLC
  22. Shiel Sexton Co., Inc.
  23. Concorde Construction Co.
  24. Bradley Construction Group
  25. Dellinger, Inc.

The Top 25 General Contractors in the Triad of North Carolina were announced last week. Click here to see those companies.

Balancing Your Work Life And Your Personal Life

When it comes to work-life balance, Americans often times struggle. CBS News recently reported, “workers are leaving more than a week of paid time off on the table!” Americans take less time off than any other developed country in the world. When compared to our friends across the pond in Europe, who are legally required to take a minimum number of vacation days, Americans are seriously lacking.

Are Americans afraid to take days off? Do we fear we will lose our jobs if we do? Or are we just so busy that we can’t find the time?

The answers to those questions vary depending on the employer and the culture that has been created in the workplace. Maybe your employer offers little vacation time, and you are afraid to take days off. Are you are in a high power position and feel stressed when you do take time off? Or maybe the top executives do not use their vacation time, so the employees feel obligated to follow suit.

Balancing your work life and your personal life is something that Americans need to get a better handle on. Not just to have more fun, but to also have a healthier lifestyle. As CPAs we see all kinds of stats related to our industry and we pay extra attention to ones such as this: 62% of Big 4 CPA Firms retiring partners die within 10 years of retirement. With retirement between ages 55 and 60, this is an alarming stat – especially to us as a CPA Firm! However, we think we have a solution to a healthy work-life balance for our Principal Members and our staff.  Unlimited PTO.

The LBAHS Way

Our firm offers our employees Unlimited PTO. You probably have the same question most of our employees have when hired, “Sooo, what does unlimited PTO mean?” The answer is very simple… exactly as it sounds. Our employees do not need to feel stressed about tracking and planning their days off – we understand that life happens and our employees deserve that freedom. Employees understand work needs to be done and the system should is not to be abused. With this freedom we have found a higher rate of productivity and a happier work place environment. We have also found this as a way to attract and retain top talent, and the importance of that in today’s CPA industry cannot be understated!

If you are looking for a better work-life balance, take a look at your company’s vacation plan and see how it fits the lifestlye you want for you. If you are in a position of power, you may want to think about other options or solutions to give your employees more freedom and help them maximize their potential both in their work life and in their personal life. We found our win/win solution for our work-life balance, can you?

Property Management Companies Are Growing Through M&A

Mergers and Acquisitions have become an increasingly popular growth strategy among property management companies. In an earlier blog titled, “What Industries Are Growing Through M&A,” we mentioned property management companies as a top industry for mergers and acquisitions. So let’s dig a little deeper and learn what is being gained by M&A and what trends are driving M&A in the property management marketplace.

What Property Management Companies Are Trying To Gain Through M&A:
  • Size/Proximity to New Locations: In some cases, especially in the Charlotte area, management companies are looking to grow across State lines.  Rather than a Charlotte based management company opening a new location in South Carolina, they will often acquire other established management companies already based in South Carolina.  This is also true within the State as well (Charlotte -> Greensboro, Wilmington, Raleigh, etc.)
  • Economies of Scale: Management companies deal with many different service providers from landscapers and painters, to accountants and attorneys.  As management companies grow and manage additional communities through M&A, they are better able to pass cost savings (via economies of scale) onto their clients.  Doing so, theoretically, makes the management company more attractive in the market place as they are better able to offer attractive rates.
  • Additional Management Offerings: There are many local management companies who specialize in residential communities while others mainly do commercial associations.  Through M&A, management companies may be able to acquire residential work if they didn;t already have it, or vice versa.
What Trends Are Driving M&A In The Industry:
  • Real Estate Brokers Wanting Out: Community management is NOT a glamorous field. In lean times (2008 – 2012) many small/local real estate sales offices turned to property management when they were struggling to sell homes. With real estate “Hot” again, some real estate agents are looking to shed their portfolio of community associations to better focus their efforts on more lucrative selling activities.
  • Lack of Succession Planning: Similar to the CPA industry, some “mom and pop” community management companies simply have no succession plan, while other “younger” management companies are seeing this as a great opportunity for M&A.
  • National Players Coming To Charlotte: Up until 2008, community management in Charlotte was pretty much locally run (i.e. 20 or so management companies throughout the State and SC, perhaps). However, in the past 5 to 7 years, Charlotte has experienced an increase in nationally known management companies who often launch their local office by purchasing a locally-owned community management company.

This may be un-chartered territory for some management companies, and LBA Haynes Strand is here to help. We have a team that understands the needs and the financial issues associated with HOAs and property management companies. If your property management company is looking to grow through M&A, schedule a no-cost consultation with us and we will walk you through the steps for a successful merger or acquisition.