When Charles “Charlie” Jones founded Marshall Jones, he set out to build a successful accounting firm built on trust. 

Guided by integrity, intention, and an unwavering belief in doing what’s right, Jones shaped a legacy that continues to define the firm today. At 81, he remains an active force in the profession, mentoring the next generation and performing peer reviews for fellow CPAs. His journey stands as a testament to leadership rooted in character, consistency, and connection.

Early Influences

Jones’ introduction to accounting began at home. His father was a CPA in Philadelphia, and by the time Jones was six, the family had relocated to Bluefield, West Virginia, where his father’s firm served coal companies. “My dad didn’t have any money,” Jones recalled. “So when I wanted to go to boarding school, I had to get a scholarship. But those were the best two years of my life.”

That early independence and exposure to his father’s quiet perseverance instilled in him a deep sense of accountability. He went on to attend Washington and Lee University, where the school’s honor code left a lifelong imprint. “Integrity was everything,” he said. “It was the same at Arthur Andersen, where I started my career. Despite what happened years later, back then it was a firm built on integrity.”

From that point on, doing what’s right — especially when it wasn’t easy — became a defining thread through his personal and professional life.

Founding a Firm on Trust

After gaining experience at Arthur Andersen and later serving as a controller in real estate, Jones co-founded his own accounting firm, which eventually evolved into a partnership with Harry Marshall. Together, they formed what would become Marshall Jones.

“The partnership worked because it was built on honesty, not similarity,” Jones said. “We were totally different guys, but we were the two most honest people our mutual friend had ever met. That was probably the best compliment I’ve ever gotten.”

The firm grew slowly and deliberately, emphasizing quality over size. “After 25 years, we only had 11 people,” Jones recalled. “But we were profitable, and we had the right people.” When Harry Marshall passed away at just 61, Jones took full ownership and carried the firm forward. “Our honesty held us together,” he said. “It was the foundation.”

Empowering the Next Generation

Every great legacy depends on the leaders who come next — and Jones was intentional about preparing for that. One pivotal moment came when he hired Kristen Hendricks, now Partner of Firm Administration. “She came in as a $28,000 office manager, and I hired her on the spot,” he said.

Hendricks quickly became a catalyst for growth. Within a few years, she was modernizing operations, refining marketing, and helping the firm expand well beyond its traditional model. “A consultant once told me, ‘If you’re not careful, she’ll take over the firm,’” Jones said with a grin. “A few years later, I called him back and said, ‘She did — and we’ve doubled our people since then!’”

Jones’ leadership philosophy has always been about empowering capable people and trusting them to lead. “She really runs the firm,” he said proudly. “She’s the achiever type. If you don’t give her enough work, she’ll find more to do.” Alongside Managing Partner Greg Logan and a growing team, Ball has helped shepherd Marshall Jones into a new era — without losing the cultural DNA that Jones established decades ago.

Innovation Rooted in Values

After the loss of his partner, Jones helped transform the firm by expanding into outsourced accounting, then a new concept in the industry. “We started taking over everything for nonprofits — paying their bills, doing payroll, keeping their books,” he said. “It took off.”

That strategic shift positioned Marshall Jones as a trusted partner for nonprofit organizations, a niche that remains one of the firm’s strengths today. “There’s a real need there,” Jones noted. “Nonprofits often have complex accounting requirements, and we understand them.”

Even as services and staff expanded, one principle remained unchanged: integrity comes first. “Integrity and quality — you just have to have that,” he said. “If people hear the name Marshall Jones, I want them to think of honesty and exceptional work.”

Mentorship, Connection, and Purpose

Though Jones no longer manages daily operations, his influence continues to shape the firm’s leadership culture. He still meets weekly with Kristen for lunch — a tradition that’s lasted nearly a decade. Their ongoing conversations reflect the deep trust and mutual respect that have guided the firm’s evolution. “We’ve always been able to speak candidly with each other,” Jones said. “That openness has been key to our success.”

Outside of work, Jones remains as active and sharp as ever. “I’m 81,” he joked, “and I tell people my friends are either dead, thinking about it, or in a home. So I’d rather go to a baby shower than a funeral.” His schedule is full: golf on Mondays and Wednesdays, peer reviews on Tuesdays and Thursdays, lunch with his wife on Fridays, and family time on weekends. “You’ve got to have something to do,” he said. “It doesn’t matter what it is — staying busy keeps you sharp.”

A Lasting Vision

When Jones looks to the future, his hopes for Marshall Jones are both ambitious and grounded. The firm aims to grow from $7 million to $35 million in revenue over the next decade, becoming one of the largest local firms in Atlanta. But for Jones, the real measure of success isn’t in numbers — it’s in reputation.

“I want people to know that we’ve done it the right way,” he said. “With honesty. With quality. With care for people.”

More than five decades after he began his career, Charlie Jones’ philosophy still guides the firm that bears his name: lead with integrity, empower others, and let trust be your legacy.

When Greg Logan describes his career path, he does so with characteristic humility and humor. The Managing Partner at Marshall Jones didn’t set out to lead an accounting firm — or even to become an accountant. “I was the undecided type,” he says, reflecting on his early days. “A good student, but without much of a plan.” What began as a practical choice to follow a friend into accounting became, over time, a deliberate pursuit of leadership, culture, and purpose.

Today, Logan’s influence at Marshall Jones extends far beyond the numbers. His journey from intern to partner reveals a thoughtful evolution — from a young professional content to “walk the well-trodden path” to a leader intent on shaping an organization that values people first.

From Following to Leading

Logan’s entry into accounting was as unplanned as it was fortuitous. A friend and future partner, Nathan, declared his intent to study accounting, and Logan simply followed. “It seemed practical,” he says. “I was good at it, so I just kept at it.” Over time, practicality gave way to ambition. He set his sights on partnership early, motivated not by prestige, but by the desire for autonomy — the right, as he puts it, “of refusal to be a partner.”

That drive eventually brought him to a crossroads about a decade into his career. As opportunities to buy into the firm emerged, Logan realized he could no longer coast. “I needed to actually make a decision,” he recalls. “The days of going with the flow were done. I had to decide what I wanted my future to be.”

The turning point came when he advocated for opening a new office in Alpharetta — a move that symbolized both personal and professional growth. “I wasn’t going to just pick up the identity of the old Buckhead CPA firm,” he says. “I had to make some decisions about who I wanted it to be.” It was the moment he began leading with intention rather than convenience.

Redefining Firm Culture

When Logan and his partners took over leadership in 2018, they were determined to evolve the firm from the inside out. “We told people, ‘We were just employees a year ago,’” he recalls. “So let’s make the kind of place we would have wanted to work.”

That simple but profound principle has guided the firm’s transformation. The focus shifted from hierarchy and tradition to flexibility, empathy, and shared ownership. “We let people succeed, we let people fail, and we remind ourselves that we’re all people first,” Logan says. Rather than chasing growth at all costs, the partners built a workplace grounded in mutual respect and work-life balance.

This people-first approach has paid dividends. Marshall Jones has been recognized among the “Best Places to Work,” a distinction Logan admits gives him “a little external validation.” But for him, the real achievement lies in retention and tenure. “I’m proud of the people who’ve been with us for so long,” he says. “They create a core thread through our trajectory that keeps us grounded.”

Facing Change with Curiosity

For Logan, leadership means balancing stability with adaptability. As the accounting industry faces new pressures — from technology to private equity consolidation — he sees opportunity in collaboration and learning.

“Private equity is buying up CPA firms,” he explains. “That’s a threat to firms like ours doing things our own way. But that doesn’t mean we can’t remain independent and still do things correctly.” His response is to seek connection rather than isolation, aligning Marshall Jones with organizations like CP America, a nationwide network of reputable firms. “We’re not going to blaze any trails here,” he says with a wry smile, “but we need to know which train to jump on to make sure we don’t fall behind.”

That steady yet open mindset extends to talent, too. As the profession grapples with declining interest from new graduates, Logan advocates for hiring based on values as much as credentials. “If you get the right people and have the right systems to train them, you can make it work,” he says. The firm increasingly embraces nontraditional hires, focusing on fit, curiosity, and shared purpose rather than rigid résumés.

Life Beyond the Ledger

Outside of work, Logan’s life is as multifaceted as his leadership. A devoted father of three, he’s candid about the challenges and rewards of balancing family, growth, and self-discovery. “I’ve gotten very good at compartmentalizing,” he says. “I’ve always been fairly good at getting home before six, at least most days.”

In recent years, following a personal reset after divorce, Logan has leaned into reinvention. He now cooks regularly, keeps an impeccably organized apartment, and even takes tango lessons. “I like to try different things,” he says. “I’m kind of a jack of all trades, master of none — but I’m okay with that.” He laughs, noting his fondness for K-pop and the memorabilia that decorates his office. “It’s fun, it’s expressive, and it reminds me not to take life too seriously.”

That openness to new experiences has deepened his empathy as a leader. “It takes a village to raise a business as much as it does a child,” he reflects. “We all go through different things, and we fill in for each other when we need to.”

The Evolving Mindset of Leadership

Logan’s path has been less about climbing ladders and more about building personal, professional, and cultural frameworks that allow people to thrive. His interest in industrial psychology reflects that shift. “It’s become a lot more about people than numbers,” he says. “It wasn’t something I considered my strong suit, but maybe it’s a hidden talent I need to develop.”

For him, leadership is not about being the loudest in the room or the most forceful decision-maker. It’s about balance, perspective, and genuine curiosity about how people work best together. He’s candid about his own temperament — “I don’t like conflict, but I’m getting better at healthy conflict” — and sees every challenge as a chance to refine both self and system.

Conclusion

Greg Logan’s story is less about ambition or sweeping reinvention, it’s one of deliberate evolution — a steady movement from following to leading, from stability to self-awareness, from tradition to transformation. Under his guidance, Marshall Jones continues to grow in size, capability, and reach, but Logan hopes its essence remains the same.

“My goal,” he says, “is that ten years from now, it’ll look incredibly different but feel awfully similar.” That balance — of progress and authenticity, professionalism and humanity — is what defines both his leadership and the firm he helps to lead.

Tax Changes Under the Big Beautiful Bill

The One Big Beautiful Bill Act (OBBBA), also called the Big Beautiful Bill, was signed into effect on July 4, 2024. This sweeping legislation reshapes the federal tax rules with provisions directly affecting small business owners, nonprofits and real-estate entrepreneurs.

For many, the most important takeaway is that the bill locks in many of the 2017 tax cuts, making them permanent. It also introduces new deductions and credits that boost take-home income and incentivize some types of investment. At the same time, the legislation also reshuffles long-standing rules around deductions, family benefits and pass-through income. Understanding the Big Beautiful Bill tax implications is essential, especially for small business owners planning 2025 to 2028 budgets.

One Big Beautiful Bill Summary

Passed by Congress and signed into law in 2025, OBBBA, also codified as Public Law No. 199-21, covers hundreds of provisions across tax policy, health care, education and defense. The bill delivers a large package — approximately $4.5 trillion in tax cuts and $1.1 trillion in net spending cuts, resulting in around $3.4 trillion added to the deficit over the next decade. New and expanded deductions include:

• Eliminating taxes on tips and overtime up to specific caps.
• New auto loan interest deduction for U.S.-assembled vehicles.
• Elevated child tax credit and special deduction for older adults.
• Stricter work requirements and reduced provider taxes for Medicaid and the Supplemental Nutrition Assistance Program (SNAP).
• Expanding rural hospital funding and phasing out clean-energy tax incentives while promoting fossil fuel development.
• Phasing out existing student loan programs while creating new tax-advantaged “Trump Accounts.”
• Launching the Pell Grant expansion to support short-term workforce training programs starting in July 2026.

The “Big Three” Tax Changes and Their Impact on Small Businesses

If you own or manage a small business, this bill affects you. It influences your bottom line, payroll planning, investment strategies, and retirement or family savings. The changes are complex, but the essence is clear — the tax landscape has shifted, and now it’s time to understand what’s new.

1. Permanent 2017 Tax Cuts Extension

The Big Beautiful Bill is wide-ranging, but several provisions stand out for small business owners and nonprofit organizations. It makes the 2017 Tax Cuts and Jobs Act (TCJA) permanent. Before this, the lower income tax brackets and doubled standard deduction were set to expire in 2025 — but now they are here to stay.

This bill gives stability to business owners filing as pass-through entities, such as sole proprietorships, partnerships or S corporations. Predictable tax brackets make it easier to plan long-term investments, whether you’re buying new construction equipment, hiring staff or assembling a property portfolio.

2. A Larger, Permanent Standard Deduction

The standard deduction nearly doubled under the 2017 tax law, and the Big Beautiful Bill makes that increase permanent and boosts it further through 2028. For 2025, the deduction is $25,000 for joint filers and $12,500 for individuals. Older adults over age 65 have an additional $6,000 deduction through 2028. If an individual’s income is over $75,000, the deduction phases out.

These deductions matter for small business owners who may not have enough itemized deductions to exceed the standard threshold. For example, a business running a small shop may find that the standard deduction simplifies filing while still delivering significant tax relief.

3. Section 199A Becomes Permanent

The permanent 20% pass-through deduction on qualified business income (QBI) is another win for entrepreneurs. This deduction was originally introduced in 2017 and allows small businesses to deduct up to 20% of their qualified income before calculating taxable income. The Big Beautiful Bill extends this permanently and expands the income thresholds, meaning more businesses qualify.

For instance, a real-estate investor earning $200,000 in qualified business income can deduct $40,000 before paying federal tax. That’s money you can reinvest in property improvements, staffing or reserves.

Additional Provisions Affecting Small Businesses

Beyond the big three, several new and revised provisions are adding meaningful benefits for small business owners:

• State and Local Tax (SALT) deduction relief: The deduction cap temporarily rises from $10,000 to $40,000 for 2025 and increases 1% annually through 2029, giving those in high-tax states relief. For example, a nonprofit property manager in New Jersey can now deduct far more in state taxes, reducing federal liability.
• Permanent bonus depreciation: Small firms can keep fully expensing qualifying equipment and software purchases immediately rather than depreciating over years.
• Child Tax Credit Expansion: The credit increases to $2,000 per child, adjusted annually for inflation. For entrepreneurs with families, this represents straightforward cash-flow relief.
• Tax-free tips and overtime: Workers earning tips or overtime can exclude a portion from taxable income, a major benefit for nonprofits employing tipped staff or contractors with variable days.
• Auto-loan interest deduction: Interest on certain auto loans becomes deductible, an advantage for construction firms financing work vehicles.
• Trump Accounts: Parents of children born between 2025 and 2028 can open these special accounts, which allow tax-deferred savings for education or future expenses. For small business owners, these accounts can double as a retirement and succession-planning tool.
• Streamlined reporting requirements: The revised IRS guidance reduces certain paperwork burdens but imposes stricter verification for wage and tip reporting.
• Targeted workforce credits: Temporary credits will encourage hiring and training in specified industries through 2028.

Eligibility depends on your business income thresholds, the type of entity and compliance with new reporting rules. Pass-through businesses and self-employed workers benefit most but must track phase-outs carefully. While lower tax brackets and higher standard deduction are permanent, several new deductions, such as tips, overtime and car loans, expire after 2028 unless Congress renews them. Rising deficits and election cycles can also trigger amendments or new surtaxes in the future, making it essential to partner with a tax professional who stays apprised of any changes to tax bills that may affect you or your business.

The Pros and Cons of OBBBA Changes

The Big Beautiful Bill does not end TCJA — instead, it locks in many provisions and adds new deductions. These changes bring clear advantages but also introduce costs and complexities. Here’s a snapshot of the key pros and cons you should weigh:

What Does This Mean for Individual Tax Filing?

The Big Beautiful Bill gives small business owners certainty by locking in lower rates originally created under TCJA. It also simplifies and expands opportunities:

• Simplified filing: With the larger standard deduction, fewer taxpayers need to itemize. A nonprofit director who used to track mortgage interest and charitable deductions may now use the standard deduction, which delivers more savings with less paperwork.
• Family benefits: The higher child tax credit puts more money back in parents’ pockets. For example, parents with children under 17 can get up to $6,600 in credits.
• Older adult support: Retirees and older business owners benefit from the extra senior deduction of $6,000, making it easier to stretch retirement income.

This impact on individual tax filing means that, for example, a contractor with two kids, $80,000 in income and standard deductions can see their taxable income drop by $30,000 after deductions and credits. A retired landlord aged 67 can claim the extra senior deduction, lowering their liability and preserving rental income for living expenses.

Does Filing Change Under OBBBA?

Filing is still fundamentally similar. You still use Form 1040 with standard schedules — not an overhaul of the filing process. However, your tax return looks different. You may see new lines or fields for the new deductions, stricter documentation requirements and more calculations because of the phase-outs for Modified Adjusted Gross Income (MAGI)-based eligibility. As a taxpayer, you need to track income thresholds and deduction limits.

Navigating State and Local Tax Implications

The changes to SALT deductions deserve special attention. The higher $40,000 cap is significant in high-tax states like California and New York. Real-estate professionals often pay steep property taxes, and this provision lets them deduct more of those costs. The SALT deduction has less impact for business owners in low-tax states like Texas or Florida, but the standard deduction and pass-through benefits still offer meaningful relief.

Nonprofit organizations with large property holdings or offices in urban centers may see lower taxable income through higher SALT deductions, improving cash flow for mission-based work.

How to Prepare

OBBBA is one of the most sweeping legislative packages of 2025. It locks in and deepens tax cuts for many, introduces new deductions and financial tools, while rolling back parts of the social safety net and reshaping health care, education and energy policy. Its depth and breadth make strategic financial planning more critical than ever. The Big Beautiful Bill creates opportunities, but realizing those benefits depends on your planning. Here are the steps to take:

• Review your filing strategy: Work with your tax advisor to decide whether to itemize or claim the larger standard deduction. You may find the standard deduction more advantageous.

• Maximize the pass-through deduction: Check whether your business income qualifies under Section 199A, which may involve restructuring, adjusting payroll or re-evaluating contracts.
• Track tips and overtime carefully: For hospitality, construction or nonprofit businesses employing tipped workers, set up systems to record exempt income accurately.
• Plan for state taxes: If you operate in a high-tax state, take advantage of the higher SALT cap while it lasts.
• Consider Trump Accounts: For families with children, see if these accounts align with your education and savings goals.
• Stay flexible: Not all provisions are permanent. Build strategies that allow for adjustment if deductions sunset or thresholds shift.

Note Key Dates

Be sure you understand OBBBA’s key milestones and deadlines. Aligning business purchases, payroll timing, and family planning with these milestones can maximize the law’s benefits:

• January 1, 2025: At the start of 2025, the TCJA tax brackets, standard deductions and pass-through deductions become permanent.
• January 1, 2025, to December 31, 2028: The temporary enhanced child tax credit, a tip income deduction, overtime pay deduction and auto loan interest deduction are in effect for three years.
• April 15, 2026: April 2026 is the deadline to file 2025 tax returns under the Big Beautiful Bill’s new deductions.
• 2027 to 2028: Phase-outs and inflation adjustment continue annually, and the IRS will release updated guidance each fall.

Working with seasoned tax planning and compliance professionals means you have someone reliable to interpret new tax rules and adjustments, ensuring you claim all benefits properly. They manage phase-outs deliberately, helping you avoid costly errors, and they stay current with IRS guidance to keep you compliant. Professionals can also help your business plan purchase timing so you can benefit from bonus depreciation, structure car purchase financing to maximize the new auto-loan interest deduction, and identify if your business qualifies for small-business pass-through enhancement and R&D expensing.

Get Guidance on Tax Changes With Marshall Jones

OBBBA cements key tax benefits while introducing new deductions that can reshape planning for many of us. With the TCJA expiration approaching, OBBBA stepped in to preserve key deductions and credits for individuals and small businesses. However, some new act adjustments are temporary. Unless extended again, related changes, such as higher SALT deductions, will revert after 2028. Your business should plan with this in mind — better yet, partner with a reliable financial professional to help you navigate current and future tax changes.

For over 30 years, the professionals at Marshall Jones have been working with businesses through certified public accountants and advisors. Our CPA accounting services include audits, reviews, compilations, tax compliance, research, year-end financial statement audits and outsourced accounting services. With us, you enjoy customized accounting, time savings, lower costs and professional accounting services that give you peace of mind, knowing you’re tax-compliant.

Contact us today for more information or to sign up and make the most of the OBBBA changes.

Nonprofit organizations (NPOs) are formed out of a desire to make a difference in the world rather than make a profit. If you’re looking to start a nonprofit, understanding the differences between a public and private organization is an important part of making that final decision. 

Both organizations serve a unique purpose and have several different benefits depending on your philanthropic goals. When comparing a private foundation vs. a public charity, it’s important to know which best suits your specific mission. Here are some key considerations about which is right for you to think about before you go any further. 

What Is a Private Nonprofit?

A private nonprofit, also known as a private foundation, is a charitable organization. It is predominantly founded and funded by one specific benefactor. However, the benefactor isn’t necessarily acting alone, as private NPOs can be run by a family, corporation or individual. 

Private foundations aren’t funded by donations from members of the public. Instead, they operate through grantmaking, financial assistance to other charities and programs related to the NPO’s goals and mission. 

What Are the Benefits of Making Your Nonprofit Private?

An aspiring philanthropist may choose to make their nonprofit private for many reasons. Some of the main benefits of making your nonprofit private include:

Control

Private nonprofits have considerable control over the use of funds. A private NPO can choose where to invest finances with complete autonomy. This level of control can help to facilitate clear long-term goals for grantmaking or other charitable matters. 

Freedom

A private foundation doesn’t have to seek contributions from members of the public. With fewer external factors to consider compared to public nonprofits, founders can focus on the foundation’s specific objectives. The investment options of a private nonprofit are also less restrictive than public NPOs, meaning that individuals or families can channel their funds into environmental and social schemes.

Straightforward Financial Reporting

Some, but not all, of the financial reporting for a private foundation can be less complicated than that of a public nonprofit. Due to funding from private entities, private NPOs aren’t required to share every last detail of their organization with the public.

What Is a Public Nonprofit?

A public nonprofit organization, also known as a public charity, will use funds donated by the public to achieve its initiatives. A public NPO may rely on donations from communities and use them to provide care, support, and assistance to those in need. The organization may also obtain financial support from grants, private foundations or individuals who believe in its charitable cause. 

Public nonprofits will have a board of directors that independently ensures that the charity is not run for private interests. It must be created and operated for one or more charitable purposes, such as:

• Religious 
• Charitable
• Literary
• Educational
• Public safety testing
• Children or animal cruelty prevention 
• National and international amateur spots competition

Any governing documentation must state this mission and strictly prohibit any practices that don’t benefit this mission.

What Are the Benefits of Making Your Nonprofit Public?

The benefits of making your nonprofit public include:

Diverse Fundraising Opportunities 

A public NPO can solicit charitable donations from a broader range of areas than a private nonprofit organization, including companies, grantmakers and members of the general public. 

Tax Deduction for Donors

In the private vs. public nonprofit taxes comparison, financial donations to public charitable organizations qualify for the highest tax deductions, making them a more enticing choice for potential donors.

Community Trust

Public nonprofits tend to be more deeply involved in community work than private NPOs. This visibility and dependence on public support can help to form strong relationships with donors.

Filing Differences for Private and Public Nonprofits

When comparing the differences between a private vs. public nonprofit, taxes and filing can be the determining factor for which best meets your organizational goals. 

Private Foundations

The control and freedom of a private NPO can pose potential challenges in regulatory adherence. For example, section 4942 of the Internal Revenue Code (IRC) states that a private charitable organization must distribute 5% of its overall assets to charitable endeavors. These assets include administrative costs, grants and other qualifying factors, which can potentially affect how private NPO funds are managed over time.

This rule ensures nonprofits use funds for charitable purposes instead of sitting on growing wealth. Failing to match the 5% annual payout threshold can lead to severe penalties, including a possible tax of 30% of the money not distributed. The foundation may also not qualify for a reduction of excise tax for five tax years.

Other private NPO tax matters to consider are:

• Private NPOs have a less generous tax-deductible incentive than private NPOs 
• Private foundation tax deductions are limited to 30% compared to 50% for public NPOS
• Stock and real estate contributions will generally have a limit of 20% which may be a deterrent to donors 
• Private nonprofits have an excise tax on the net investment income of the organization

Public Charities

The diverse fundraising options and increased community trust of a public nonprofit come with increased transparency requirements. The public financial support of a public NPO includes more accountability. Public charities are recognized under Section 501(c)(3) as being tax-exempt, which means they are required to file annual reports to the IRS. 

This form includes details of the organization’s programs, finances and governance. It has three versions — Form 990, Form 990-N and Form 990-EZ. The version needed for your public NPO depends on its assets and revenue for this financial year. 

Additional public NPO filing matters and challenges to take into account: 

• Public charities are required to receive more than one-third of their donations from the general public 
• Organizational use of financial resources requires clear practices and dialogue with stakeholders 
• Public NPOs are not permitted to participate in any kind of public office political campaign 
• Filing for a public charity can be extremely detailed and lengthy

Public nonprofits also have to meet the public support test, which means that a large portion of their financial support must come from the general public, public charities or the government.

Let Marshall Jones Take Care of Your Nonprofit Needs

Making a private nonprofit vs. public nonprofit comparison is an important part of making that final decision for your startup organization. When you’ve made that final decision, our team of certified public accountants and advisors is here to ensure your tax and bookkeeping matters are taken care of. 

The complex nature of filing differences for both private and public nonprofits can be difficult to manage alone. We will take care of issues like tax and regulatory changes, tax codes or deadlines for peace of mind, letting you focus on running your organization. Connect with Marshall Jones for help navigating all tax and bookkeeping concerns for your nonprofit.

Everyone wants to keep more of their hard-earned money, but determining the best ways to legally reduce your tax bill can feel overwhelming when considering the complex financial regulations.

Tax shelters provide a legitimate path to lower your tax burden. The trick is knowing which ones you qualify for and how to use them effectively. This guide will walk you through the essentials — from tax shelter examples to practical tips — so you can make informed decisions and maximize your savings.

What Is a Tax Shelter?

Tax shelters are financial strategies that reduce taxable income.

• Investments: Investments like retirement accounts offer tax-deferred growth. That means you won’t pay taxes until you withdraw the money — sometimes, when you’re in a lower tax bracket.
• Deductions: You can deduct eligible expenses when filing your taxes. Deductions include charitable donations, medical costs and mortgage interest.
• Income shifting: You can reduce your tax burden by shifting income to family members in lower tax brackets or relocating funds to jurisdictions with lower tax rates.
• Tax credits: Credits directly reduce the amount of tax you owe. For instance, you might qualify for credits based on education expenses, energy-efficient home upgrades or child care costs.

Tax Shelters vs. Tax Evasion

While there are legitimate strategies for reducing your tax burden, not all methods are legal. Some people attempt to lower their tax bills through illegal shelters, which crosses the line into tax evasion.

One tactic involves using tax havens, or foreign countries with little or no tax on trusts or financial accounts. If attempting to avoid disclosing the full scope of your wealth or hiding money from the IRS by placing assets in confidential overseas accounts sounds dishonest, that’s because it is. 

Holding assets abroad isn’t illegal. But if you fail to report those assets or intentionally avoid paying taxes on them, it becomes tax evasion — which can have dire consequences.

What Are the Best Tax Shelters?

You can reduce your tax burden by using legal tax shelters — here are some of the most popular and proven options.

Retirement Accounts

Investing in retirement accounts is an excellent way to defer your taxes while saving for the future. 

• IRA: Anyone earning an income can contribute to an individual retirement account, which lowers their taxable income for that year. You can defer your taxes until you retire and withdraw your assets.
• Roth IRA: Contributions to Roth IRAs aren’t tax-deductible, but qualified withdrawals are tax-free, which can result in you paying less tax in the long run. 
• 401(k)s and 403(b)s: Employer-sponsored retirement accounts let you invest pre-tax dollars to reduce your taxable income. You’ll pay taxes when you withdraw the money upon retirement. 

Real Estate

Depreciation deductions allow real estate investors to spread their deductions over a longer period and deduct more from their taxable income. You can also deduct mortgage interest payments and property taxes.

Additionally, you can reinvest and defer capital gains taxes from one investment property to another — a tactic known as a 1031 exchange. If you sell your primary residence, you can be eligible for a considerable capital gains tax exemption. 

Municipal Bonds, Mutual Funds and Exchange Traded Funds

Municipal bonds are a way for governing bodies to fund infrastructure projects such as new roads, schools or hospitals. Through bonds, public bodies can borrow money in exchange for interest payments. These interest payments provide the tax benefits. 

While it’s not always the case, municipal bond interest can be exempt from federal taxes if the issuer meets specific requirements. Tax exemptions may also be available at the state and local levels if the buyer lives in the same state that issued the bond. 

If you contribute to a mutual or exchange-traded fund that invests in municipal bonds, the interest you gain from this will also be exempt from federal taxes. 

Health Savings Accounts

Contributions to your health savings accounts are deductible from your taxable income, and withdrawals you make for eligible medical costs are tax-free, too. Your money can grow tax-deferred while building your medical savings account.

Business Ownership

As a business owner, you can deduct various expenses from your tax bill, including:

• Employee wages
• Office supplies
• Internet
• Startup and organizational costs
• Professional fees
• Business meals and travel
• Expenses related to a home office

Consult a professional who can walk you through your options for reducing you and your business’s tax bill. 

Charitable Donations

Though IRS limits apply, donating to qualified charities can lower your taxable income. You can give cash or noncash assets, like stocks or property.

Which Tax Shelter Is Best for You?

With so many legal ways to reduce your tax burden, deciding which is best for your financial situation and goals can be challenging. Here are three questions to ask yourself to narrow down your options.

1. How Much Money Can I Invest Right Now?

Whether contributing to your retirement fund or donating to charity, virtually every tax shelter requires you to spend or invest money to reduce your taxes.

However, some tax shelters, such as purchasing real estate, require higher investments than others. Others grant you more tax benefits the more you spend or invest. If you don’t have the funds, this will remove a few tax shelters as options for you.

2. How Liquid Do I Want to Be?

Rigidity is a drawback of many tax-sheltered investments. For instance, property demands a significant upfront investment and may take time to sell. Meanwhile, IRAs and other retirement accounts will penalize you for withdrawing money prematurely. If your budget’s tight, a few of these options might not be feasible.

Municipal bonds and mutual funds may be your best strategies to remain as liquid as possible while still benefiting from tax advantages.

3. What Are My Financial Goals?

Identify your long-term financial objectives aside from lowering your tax bill. Do you want to build a property portfolio? Have you always dreamed of retiring early? Let your fiscal targets guide your use of tax shelters, not vice versa.

Receive Personalized Tax Shelter Guidance

When used correctly, a tax shelter can be a powerful way to reduce your tax bill. Missteps can lead to IRS underpayment penalties and even legal consequences.

Marshall Jones helps our clients maximize the benefits of tax shelters while staying fully compliant. Our team can recommend strategies that align with your financial goals and properly document every detail. 

Contact us today for personalized advice and a legal strategy that unlocks the full value of tax-saving opportunities.

While most consumer payments are made electronically, there are still times when cash is necessary or simply preferable. Since cash is harder to trace, there’s a higher chance it will be used for criminal activities than electronic payments.

That’s why the IRS requires businesses to declare any large cash payments they receive by filing Form 8300. Here’s everything you need to know about IRS Form 8300, including how and when you need to file one.

What Is Form 8300?

IRS Form 8300, also known as “Report of Cash Payments Over $10,000 in a Trade or Business,” is used by businesses to report cash payments exceeding $10,000. The main purpose of Form 8300 is to provide an audit trail to assist the government in its anti-money laundering efforts.

Qualifying cash payments can be made as single payments or multiple related transactions. For example, if a car dealer sold a car for $15,000 and the buyer paid them in monthly cash installments of $3,000, the car dealer would be required to file Form 8300.

These payments can involve coins, currency and certain monetary instruments, including traveler’s checks, cashier’s checks, bank drafts, and money orders. A monetary instrument with a face value of more than $10,000 is not considered cash.

Who Needs to File Form 8300? 

When a business receives a cash transaction over $10,000, a relevant “person” must file Form 8300. This person can be an individual or a company, partnership, corporation, association, estate, or trust. 

The cash payment doesn’t have to be part of a sale for Form 8300 to be necessary. You still need to file Form 8300 if you receive $10,000 or more in cash because of:

• A loan repayment.
• The rental or sale of a property.
• Expense reimbursement.
• Currency exchanges.
• Contributions to custodial trusts or escrow accounts. 

Form 8300 is only necessary when any part of the cash transaction occurs within any part of the United States or its overseas territories. This covers all 50 states, the District of Columbia, American Samoa, Guam, Puerto Rico, the U.S. Virgin Islands and the Commonwealth of Northern Mariana Islands.

While cash transactions lower than $10,000 don’t require Form 8300, the IRS highly recommends filing one if businesses receive a suspicious transaction.

Filing IRS Form 8300

It’s important to file Form 8300 correctly. To do this, you should understand how your circumstances can affect the way you file the form.

How to File Form 8300

If you need to file Form 8300, you must do so within 15 days after the cash transaction occurred. Form 8300 is usually filed electronically, although it can be filed by paper under certain circumstances.

One of the most important aspects of correctly filing Form 8300 is the written statement. This statement must be given to any party you mention on the form by no later than January 31 of the year following the transaction. The statement must include:

• Your business name.
• Your business address.
• Your business contact details.
• The name of your business’s contact person. 
• The aggregate amount of reportable cash. 
• A declaration that you’ve given this information to the IRS through Form 8300.

Failure to deliver this written statement to all relevant parties by the deadline could result in penalties. If you’re filing Form 8300 because you believe you received a suspicious transaction, you aren’t required to provide the written statement.

Keep a copy of any Form 8300s you file for at least five years afterward. 

Does Form 8300 Need to Be Filed Electronically?

In most cases, Form 8300 must be filed electronically. Specifically, if you electronically file other information returns, you must also electronically file Form 8300. Additionally, if you file 10 or more information returns in a calendar year, not including Form 8300, you must file Form 8300 electronically, too. These 10 returns can be of one or more types.

If you’re experiencing undue financial hardship, you can request an exemption from having to file electronically by filling out Form 8508. This form describes the situations where the waiver will be granted. These situations include when:

• The cost of filing electronically exceeds the cost of filing using other media.
• Access to the internet is unrealistic, particularly for rural businesses.
• The filer lacks the necessary digital literacy.
• The business has suffered due to a federally declared disaster.
• Fire, casualty or natural causes have affected the business.
• Death, serious illness or unavoidable absence of the individual who files Form 8300.
• The business is in its first year of operation. 
• A foreign entity is unable to access the necessary software, or other uncontrollable issues hinder their ability to file electronically.

If the waiver is granted, it will be automatically applied to every Form 8300 you file in that calendar year. You must write the word “Waiver” at the top of each Form 8300 that you file.

If filing Form 8300 electronically would require you to use technology that isn’t compatible with your religious beliefs, you are automatically exempt from filing Form 8300 electronically. In this case, you must write “Religious Exemption” at the top of each Form 8300 that you file.

If you aren’t required to file Form 8300 electronically, you can still choose to do so.

What to Do If You’re Filing IRS Form 8300 Late

Any late filings are liable to penalization. If you file Form 8300 past the 15-day deadline, you must declare this. File the form as you normally would, and write the word “Late” at the top of each relevant Form 8300. 

If you file your Form 8300 incorrectly, it can be considered a late filing. For example, if you sent your Form 8300 through the mail when you were required to file it electronically, it would be considered a late filing.

Make Filing Your Form 8300 Simple With Marshall Jones

Knowing exactly how and when to file Form 8300 isn’t always straightforward, especially when you’re focused on running your business. That’s why it can be hugely beneficial to work with a reliable tax consultant. 

At Marshall Jones, our tax planning and compliance services are designed to make filing any information returns simple. We’ll help you file the relevant forms on time and correctly to support your business.

To find out more about how our knowledgeable advisors can help you file Form 8300 and assist with other tax or filing needs, contact us today.

As a real estate business, it’s best not to overlook the value of accounting. Whether you’re a small or a large enterprise, real estate accounting services can help your organization get the insights needed to maintain and scale your company while aligning with relevant government requirements.

What Is Accounting for Real Estate?

Accounting for real estate involves tracking and managing real estate financials, which include transactions from buying, selling, and purchasing properties. These services help your team gain a clearer overview of the company’s cash flow, making it easier to gauge where and how you can expand your real estate offerings — or if cutting costs is necessary. 

Real estate accounting also includes preparing and reviewing tax reports, which include information on real estate or property taxes. It also prepares your business for a financial audit, ensuring you’re compliant with legislation.

Benefits of Accounting Services for Real Estate

With accounting for real estate, you get to measure your business’s economic performance and strategize on how to position yourself in the industry. It helps you make data-driven decisions on your future projects or purchases. 

Accounting services also help you learn more about your properties’ revenue and business expenses, catch red flags more easily and avoid potentially catastrophic losses. Businesses can optimize spending for tax deductions, too.

Depending on the state of the economy, your accountants may perform inflation accounting if needed. During seasons of high inflation, basic accounting may provide financial data that is irrelevant due to the fluctuating value of the dollar. Inflation accounting uses index prices to provide a more realistic picture of your business’s financial state.

What Is a Property Accountant?

A property accountant is an accountant who specializes in real estate properties. They can be well-versed in real estate taxes, so you can be more certain of the accuracy of your documents. Similar to other types of accountants, a property accountant manages your business income and expenses and helps you comply with legislation.

Accounting vs. Bookkeeping for Real Estate Agents

Accounting is not the same as bookkeeping. A bookkeeper may be able to perform basic accounting, such as recording financial transactions. However, accountants, especially certified public accountants (CPAs), are capable of larger and more complex accounting tasks. 

For instance, a managerial accountant focuses on using financial data to make business decisions. A cost accountant, on the other hand, focuses on the costs related to production. Tax accountants concentrate their services on taxes.

Even if you’re a small business with relatively simple financials, hiring an accountant can be a highly beneficial move to enhance financial management and make the most out of every dollar you earn.

Real Estate Accounting Best Practices

Accounting and real estate work go hand in hand to ensure business growth. This type of accounting mostly involves tracking financial transactions, conducting monthly reviews and using this information to make business decisions. 

Keeping the following best practices in mind can help your company enhance its accounting and ultimately improve operations. 

Keep Personal and Business Spending Separate

Separating your personal and business spending involves opening a business bank account. There are a few reasons why you’ll want to do this:

• Easier financial management: Since you’ll be using your financial data as a reference for your business decisions, having a clear history of your business expenses can make it easier, especially if you’re a large business. This can make tax season simpler, too.
• Liability protection: If you’re not a sole proprietor, having a separate business account protects you from personal liability. You won’t be personally responsible for any debt or liabilities of your business.
• Professionalism: Even if you’re not thinking of taking a business loan in the near future, when that time comes, having a separate business account with a clear-cut history of your business expenses can make you look good in front of lenders. 

Track the Right Information

It’s essential to track information from bank statements, receipts, invoices, checks and other business transactions. To ensure you’re getting the full overview of your real estate business, your accountant should take note of the following costs:

• Property acquisitions
• Property maintenance expenses
• Rental income and mortgage payments
• Commissions of your real estate agents
• Association and brokerage fees
• Transportation costs
• Professional development and licensing fees
• Advertising and marketing expenses
• Administrative expenses

Categorize these expenses properly for a smoother taxation process. It can help you identify options for tax deductions. Plus, it will enable you to showcase your reports more accurately to demonstrate your real estate business’s true performance.

Keep Local Requirements in Mind

Your business must prioritize certain financial rules and regulations, especially those regarding taxes. 

Your tax accountant should be familiar with relevant legislation at the federal, state and local levels. For instance, the Internal Revenue Service (IRS) states that all rental income should be shown on your tax return. Keeping a record of your rental expenses is important, and your business should be able to showcase documentation if the IRS audits your company.

By learning these regulations, you can also benefit from tax deductions and other benefits. 

Ensure Accuracy in Your Reports

Your financial data should be accurate, which is why monthly reviews are necessary. Before you create financial reports from this data, you’ll need to watch out for discrepancies and correct the numbers accordingly.

Once you’re certain of their accuracy, you can then create reports, such as:

• Balance sheets.
• Income statements.
• Cash flow statements.

Ensuring your financial reports are accurate will help you make better and well-informed business decisions.

Use Effective Accounting Software

In relation to accuracy, using accounting software can reduce the chances of human error from manually tracking your business transactions. 

Accounting software will also simplify the work and increase your accountant’s efficiency. For instance, the software may automate expense tracking, invoicing and financial reporting. These programs are typically cloud-based, enabling you to review the information from anywhere with any device.

You can find accounting software programs tailored to the unique needs of the real estate industry. 

Let Marshall Jones Do the Work for You

Marshall Jones has been working with Atlanta businesses for over 30 years through our certified public accountants and advisors.

Count on our experts to deliver the real estate accounting services your business needs so you can sit back, relax and enjoy greater peace of mind. Stop worrying about managing your own business finances, and let our team do the work for you. Let us help you save time, refocus your resources and improve your operations. 

Our accountants are proud to be accessible — you can contact them conveniently by call, video chat, text or email. 

Learn more about our services today!

Nonprofit organizations (often referred to as NPOs) work based on benefiting communities and charitable causes rather than making a profit. NPOs can be organizations such as hospitals, churches, universities or any other philanthropic foundation that serves the public in various ways.

Because they’re not focused on making a profit, NPOs need monetary donations to benefit the community. Donors can donate cash or gifts in kind to NPOs, making proper financial and donation tracking important for these organizations. Nonprofit donation tracking software can help NPOs record and track donations received and money spent.

Different Donation Types

Donations can take on various forms and are grouped into two main categories — cash and in-kind donations.

Cash Donations

Monetary gifts in varying amounts are the most common type of donation most nonprofits receive. They come in two forms:

• Restricted cash donations: These donations are made with a specific end goal in mind. Restricted cash donations must be utilized for a predetermined purpose or project.
• Unrestricted cash donations: Unrestricted cash donations can be allocated at your discretion and serve any area of your organization.

In-kind Donations

In-kind donations or in-kind gifts are nonmonetary contributions and may take the following forms:

• Services or skills: Donors offer services or skills to NPOs to help them support the surrounding communities. These may include consulting, teaching, IT, legal or accounting services.
• Goods: Donors may contribute tangible items to NPOs, such as equipment, school books, stationery, clothes or food.
• Assets: Donors sometimes give or help NPOs and their associated communities acquire assets like housing or other properties.
• Paid bills: Here, the donor settles a bill on behalf of the NPO, such as paying for the organization’s electricity or water usage.

The Importance of Donation Tracking

Any business, big or small, must track its income and spending. This process helps business owners create accurate financial statements and balance sheets to manage their operations well. Financial records will equip you to identify your biggest income streams and remain aware of where you spend or invest most of your resources. 

Similarly, cash and in-kind donation tracking for NPOs is important for several reasons:

• Responsibility and transparency: NPOs must track and make all financial information publicly available, allowing donors to monitor how their contributions are utilized. Donors often place high value on an NPO’s level of transparency and whether donations and resources are managed responsibly. Donation tracking helps build trust between the NPO and its donors, stakeholders and any regulatory bodies involved.
• Tax compliance (NPO): Many NPOs in the United States qualify for tax-exempt status issued by the Internal Revenue Service (IRS). NPOs must request 501(c)(3) status from the IRS to receive tax exemption. To remain 501(c)(3) compliant and qualify as a tax-exempt nonprofit, NPOs must often have a dedicated Chief Investment Officer and Accounting Team and meet filing requirements. 
• Tax compliance (Donor): Donations can usually be subtracted from donors’ adjusted gross income (AGI), which reduces their taxable income and results in owing less income tax. Donors may claim their donations as a tax write-off, provided they have a receipt from the NPO. NPOs are therefore required to track who their donations come from and deliver these donors an accurate receipt.
• Plan and allocate: Donation tracking will help you identify gaps and opportunities. With a clear understanding of your NPO’s available resources, you can plan, make informed decisions and allocate the necessary resources where they would be most impactful.
• Acknowledgment and recognition: A record of the donations received alongside the corresponding donors will tell you who donated what, how many or how much. This record will allow you to give thanks and recognition where it is due, so keeping track of donations is a great way to build long-standing relationships with your donors and encourage continuous support!

Best Practices for Tracking Cash and In-kind Donations

The IRS and the general public may keep tabs on an NPO’s expenditures to ensure that all donations are utilized responsibly. Keeping the following information on file will help you stay organized and prepare you for the required accounting procedures:

1. Requests and applications: Keep track of donor requests and applications. Important information includes names, contact details and a record of all communication and engagements. Having this data available will allow you to establish a contacts database useful for future planning and resource allocation.
2. Monetary and fair market value: Record the value of each cash and in-kind donation received. For cash donations, you will track the monetary value. The value of in-kind contributions can be determined by doing a market-related estimation of costs and recording the retail prices for the goods received or the industry standard fees for services donated.
3. Donor details: Keep the details of each official donor on file. Key information includes the name and contact details of the individual donor or organization.
4. Contribution frequency: Record how often and from who you receive contributions within a specific time frame.
5. Impact value: Track the impact of different projects or contributions. For example, an education-focused nonprofit might note how many kids will have access to schooling for each $1,000 contribution. 
6. Formal receipts: The NPO must issue formal receipts to its respective donors, acknowledging all donation(s) of a value of $250 or more received. Donors require an official receipt to qualify for tax exemption. Additionally, providing this documentation establishes credibility and trustworthiness with your donors.

How to Choose a Donation Tracking Tool

Various donation tracking tools are available to track cash and in-kind gifts for tax purposes. Many organizations use QuickBooks, as this software is widely known and readily available. Whichever tracking tool you’re considering, make sure it allows you to maintain a real-time, accurate contacts database to keep your donors and their contributions organized.

During your selection process, consider your NPO’s unique needs and requirements. The best donation tracking tools include functionalities such as accurate data capturing, reporting and visualization tools, and automatic receipt generation. Above all, be sure the software is user-friendly, reliable and secure, as the safety of donors’ contact details and the associated financial data is paramount.

Marshall Jones Is Ready to Help With All Your Accounting Needs

Marshall Jones is a team of top accountants in Atlanta, GA, serving the industry since 1984. We have extensive industry expertise and are familiar with the unique requirements associated with nonprofit organizations. If you need assistance tracking cash or in-kind donations and managing other financial concerns, we’re here to support you and your NPO by handling all your accounting and taxation needs. We can manage your accounts on- or off-site and let you focus on expanding your organization so you can do more for your community. 

We specialize in business accounting software solutions for NPOs like yours. Our team will provide expert guidance to help you make an informed decision when choosing a donation-tracking tool for your organization. Contact us today — together, we can work toward reaching your goals.

Are you interested in a challenging and rewarding career as a general contractor in Georgia? This license is highly sought-after as it authorizes unlimited residential and commercial projects, opening up a world of possibilities.

How do you get a general contractor license in GA? There are several prerequisites to applying for your license, including age, education, experience and specific financial, tax and insurance requirements. 

Who Needs a Contracting License in Georgia? 

Anyone offering or performing construction work costing more than $2,500, including materials and labor, must have the correct license from the State Licensing Board for Residential and General Contractors, or they will be acting illegally.

Types of Contractor Licenses in Georgia

Before learning how to obtain a general contractor license, it’s important to note that four contracting licenses are available in Georgia. 

Here are Georgia’s four contractor license definitions and their specifications: 

1. Residential-basic contractor license: A residential-basic contractor can legally perform contractor activity or work on specific structures only. The scope of this license extends to one-family townhouses and detached one-family and two-family residences that are not more than three stories tall, as well as their accessory buildings and structures. The requirements for residential contracting licenses differ from those of general contracting licenses.
2. Residential-light commercial contractor license: A residential-light commercial contractor may perform contractor activity or work on multifamily and multi-use light commercial buildings and structures that are less than four stories tall and less than 25,000 square feet of total interior space. If the building they are working on is engineered steel, it can be 50,000 square feet. 
3. General contractor limited tier license: Individuals with limited tier licenses are subject to the same parameters as general contractors, except they are subject to a financial limit of $1,000,000 per contract.
4. General contractor license: The general contractor license allows the holder to perform unlimited construction work. General contractors may take on projects of any size, residential or commercial. 

Georgia General Contractor License Requirements

Before applying for your dream career, you must understand the specifics. Here’s what you need to know about the requirements for a general contractor license in Georgia.

Age

Individuals have to be 21 years of age to apply for a general contractor license. Once you have turned 21, you can begin the application process if you meet the other necessary criteria.

Education and Experience

When submitting your application, you will be required to swear the information you’ve included is correct and submit satisfactory proof. To be considered eligible for a general contractor license in Georgia, you must have education or experience that meets one of these three options:

1. Four-year degree plus a year’s experience: You must have completed an accredited four-year bachelor’s degree in college or university in either engineering, architecture, building construction, construction management or another field acceptable to the General Contractor Division. In addition, you must have at least one proven year of experience working as or employed by a contractor unless you have other background that the General Contractor Division approves as substantially similar.
2. Courses and experience equal to four years: You must have a combination of academic credits from accredited college-level courses and proven practical experience equal to at least four years that the division deems acceptable. 
3. Four years of proven experience: You must have at least four years of experience working in construction or a similar field. Your experience must include at least two years in the employment of a general contractor or other employment found acceptable by the General Contracting Division. Finally, your experience must consist of one year in administration, marketing, engineering, accounting, estimating, drafting, project management, supervision or other division-approved activities.

Minimum Net Worth

When applying to become a general contractor, you must provide satisfactory proof that you have a net worth of at least $150,000 to be eligible.

Insurance

In the application, you must show that you have general liability insurance of at least $500,000 per occurrence. In addition, if you have employees, you must provide workers’ compensation insurance in compliance with Georgia law.

Examination

To obtain a general contractors license, you will have to pass an examination approved by the General Contractor Division that tests your knowledge of topics such as:

• Building codes.
• Contracting.
• Construction ethics.
• Estimating costs.
• Practical application of commercial general contracting.
• Reading plans and specifications.
• Responsibilities to the public, owners, subcontractors and suppliers.
• Georgia laws related to general contractors, construction, workers’ compensation, insurance, surety bonding and liens.

Other Requirements

To be considered eligible for a Georgia contractor license, you will also have to:

• Demonstrate good character: Those applying for a general contractor license must prove to the General Contractor Division that they demonstrate competency, integrity, ability and financial responsibility.
• Consent to a background check: You will have to sign a form consenting to a background check, including criminal history, and submit it with your application.
• Verify your tax payments: You must prove you have been paying your taxes for a prescribed period.
• Designate a qualifying agent (if applicable): If a business requires a contracting license, the application must be submitted by a qualifying agent who works for or owns part of the business.
• Establish a joint venture (if applicable): Should two or more individuals or businesses want to operate a joint venture, they must either apply as the joint venture itself or the two or more individuals or qualifying agents acting on behalf of a business must each have a general contracting license. 
• Confirm eligibility as a military spouse or transitioning service member (if applicable): If you are considered an eligible candidate, you may qualify for expedited processing.

How to Apply for a General Contractor License in Georgia

Now that you understand the requirements, how do you get a general contractor license in GA? Firstly, it’s important to remember that when you apply for your license, you’ll need to select either the individual or the qualifying agent application. Once you have made your selection, you will proceed as follows:

• Complete the application
• Gather supporting documents
• Review and double-check
• Submit the application

If you struggle to assemble your supporting financial documents, consider seeking expert assistance from a skilled tax and accounting professional to increase the likelihood of your application’s success.

Financial Requirements for a GA General Contractor License

From demonstrating the required net worth to providing proof of insurance and tax compliance, having your financial documentation in order is essential. You’ll need to fulfill the following financial and insurance requirements to obtain a general contractor license:

• Pay a non-refundable application fee
• Demonstrate financial responsibility 
• Prove your net worth with a certified public accountant (CPA) reference letter
• Verify tax payments
• Provide proof of acceptable insurance

Audit and CPA Reference Letter

Applicants for a general contractor license in Georgia must provide a CPA reference letter or form attesting to a review or an audit. While an audit for your general contractor’s license is not a strict requirement, it is advisable for your success. Having an auditor demonstrate your financial stability helps you present a strong and credible application.

Get Financial Assistance for Your General Contractor License Application 

Navigating the financial requirements for a general contractor license can be complex. Marshall Jones specializes in audits for the construction industry and provides accurate and up-to-date financial analysis and information you can use for your application. General contractors and construction companies face unique accounting challenges, and we help overcome them.

Marshall Jones Certified Public Accountants And Advisors is a full-service accounting firm in Atlanta, GA, serving individuals, corporations, small businesses and nonprofits. Our experienced team provides tax preparation and compliance services, audit and assurance assistance and client accounting services. Let us help you save time and support your success.

Learn more about Marshall Jones, or contact us with any questions.

If you want to buy out a business partner, you must purchase their ownership interest at fair market value. This process requires implementing an effective strategy that includes communicating honestly and acquiring enough funds to complete the transaction. Buyout reasons can include a desire for full control, differing views on the business’s direction, retirement or even death.

Understanding Buyouts

A buyout refers to a transaction where one party acquires another party’s ownership share in a business. Depending on who the buying party is, ownership changes are classified into various types, such as:

• Partner buyout.
• Management team buyout.  
• Employee buyout of a small business.
• Private investor acquisition.
• Company acquisition.

What to Do Before Buying Out a Business Partner

Because a partner buyout will change the company’s ownership structure and its future direction, it’s critical to perform the tasks below to ensure a smooth transition. 

• Consider the company’s future: Evaluate the buyout’s impact on business operations and how you plan to address it. If your partner is hands-on, determine if you’re ready to take on their responsibilities or hire someone to handle these tasks. Examining a future without your business partner will help you prepare for the possible effects.
• Think about partner buyout financing: Buying out a business partner is often a significant expense that requires careful planning. If you can’t pay the full amount out of pocket, consider the funding options you can explore.

How to Buy Out a Business Partner

When buying out a partner in a limited company or other type of business partnership, the process will begin with preparation. Review the business’s buy-sell agreement to confirm the formula for setting a buy-out price, the payment terms and other protocols that will guide the process. 

Next, undertake the steps below.

1. Kick-Start a Positive Conversation

Open a conversation with your business partner in a positive tone to determine a buyout plan that works for both of you. Clearly communicate and document the expectations and goals of each party to simplify the legal process. Regardless of the reason for the buyout, maintain a friendly, easy-going tone during the discussion.

2. Seek Legal Counsel

Both parties should get independent lawyers to guide the transaction. Your attorney will help you with the negotiations and advise you on your obligations as the buyer. 

3. Determine the Business’s Value

You and your partner should schedule an independent valuation to provide a starting point for negotiations. The valuation should determine the company’s accurate, fair market value.

4. Negotiate a Price

Based on the business value, discuss the offer price with your attorney and then present it to your business partner with justifications. Be open to compromise within reasonable limits, regardless of their initial response.

If the buyout reason is retirement, negotiate a lower buyout price by agreeing to take responsibility for their retirement benefits. 

5. Create the Buy-Out Agreement

Once you and your partner agree on a price, your lawyer will draft an agreement detailing all relevant terms, including the buy-out deadline, a non-compete clause, and how you’ll finance the purchase. Agreements must meet state buyout laws.

Business partners can agree to proceed with one of these buyout structures:

• Installment
• Lump sum
• Seller financing
• Lender financing

6. Finance the Buyout

After signing the agreement, send payment within the agreed-upon timeline. If you need to secure financing for the purchase, submit a loan application early to an institution with favorable interest rates to enable timely payment. 

It’s essential to consult with a professional tax advisor to understand the tax implications of the buyout. Your tax obligation depends on the presence of a goodwill payment and whether the Internal Revenue Service (IRS) considers the buyout a capital gain/loss, ordinary income or if the payment is deductible by the remaining partner.

7. Ownership Transfer

Your business partner’s lawyer will file the necessary legal documents with the authorities to complete the ownership transfer.

8. Inform the Relevant Parties

Send official notifications about the change in ownership to employees, customers and other stakeholders.

9. Update Business Documents

Update the partnership agreement, bank accounts, insurance policies and other records to reflect the changes in business ownership.

10. Implement Post-Buyout Tasks

Collaborate with the departing business partner to hand over responsibilities to you or an employee. 

11. Focus on the Future

Now that the business has a new ownership structure, you can implement strategies to guide it into the future.

How to Finance a Partner Buyout

Financing is a vital aspect of a buyout as it determines how you’ll purchase your partner’s share in the business. With so many options available, it’s advisable to consult with a reputable financial advisor to help you choose low-risk options. 

Examples of funding options include:

Personal Financing

If you have a considerable amount of saved funds, you can use them to complete the entire transaction. Other options include selling your assets or borrowing funds from friends and family.

Business Profits 

If your business can spare its retained earnings, you could use them to complete the buyout. Talk to your tax advisor to determine if this option is tax-efficient.

Equity Financing

This option involves selling stocks to individuals, venture capitalists or angel investors to raise capital. Alternatively, you can sell stocks publicly through an initial public offering (IPO).  

Debt Financing 

Debt financing involves selling debt instruments like bonds and bills to institutions or individuals in exchange for funds. You can also borrow money through small business, non-bank cash flow and recurring revenue loans. 

Merchant Cash Advance 

This arrangement is a lump sum payment that you’ll repay, plus a fixed fee, using a percentage of the business’s revenue. Consider this option if your business generates consumer sales. 

Seller Financing 

Your business partner can lend you the funds to buy them out in exchange for installment payments. This is a win-win financing option since it saves you from the financial implications of a lump sum payment and gives your partner a steady income source.

Mezzanine Financing 

This option combines equity and debt financing and adapts repayment to the business’s cash flow. The lender can convert the loan to equity interest if you’re experiencing repayment challenges. 

Deferred Compensation 

The selling and buying partners can agree to a buyout that spreads out payments over a defined period. This option is ideal if you don’t have the funds to pay in a lump sum.

Insurance Policies 

If the buyout is a result of your partner’s death, you can purchase their share with life insurance as long as you had one set up beforehand. A disability insurance policy can also provide financing if your business partner can no longer work. 

Contact Marshall Jones for Help Buying Out a Business Partner

Marshall Jones Certified Public Accountants And Advisors is here to offer financial and tax advice to simplify your buyout. We have over 30 years of experience in the industry and a reputation for meeting client needs. We’ll tailor our solutions to your unique situation to streamline the process.

Reach out to us online and let us help you save time, re-focus your resources and improve your operations.

Requesting a nonprofit audit is a critical step in ensuring regulatory compliance and demonstrating trust to current and potential donors. Audits display a leadership’s willingness to run an open and accountable organization. 

What Is Nonprofit Auditing?

Nonprofit auditing involves examining an organization’s statements to determine overall financial health and compliance with state and federal laws. An independent third-party auditing firm assesses internal controls, accounts, transactions and accounting practices against the generally accepted accounting principles (GAAP).

The audit requirements for nonprofit organizations include:

• Fulfilling by-law procedures.
• Expensing over $750,000 in federal funding per year.
• Recording a gross annual revenue of more than $500,000 in most states.
• Completing a grant application.

How to Request an Independent Nonprofit Audit 

An independent audit establishes credibility, ensures compliance and reveals areas for financial improvement. Use the steps below to request this evaluation.

1. Determine if an Audit Is Necessary

Check the state, federal and organizational requirements to determine if your nonprofit needs an audit.

2. Assign Audit Responsibility

Board members can oversee the auditing duties themselves or give the responsibility to a subcommittee or task force. Also, they must determine which roles to delegate to employees and identify a liaison between the audit overseer and the auditing firm.

3. Establish Goals and Reporting Procedures

Identify the goal and expectations for the audit and determine how the auditing firm will present its findings.

4. Address Conflicts of Interest

Determine how to address conflicts of interest arising from allowing those involved in internal controls and financial matters to gather audit documents. This step ensures accurate and objective audit results.

5. Search for an Audit Firm

Search online for reputable and qualified auditing firms with experience evaluating the financial health of nonprofits. You can also ask other organizations for recommendations.

6. Create a List of Your Top Firms

Narrow down your list to the firms that attract your interest.

7. Submit a Request for Proposals (RFP)

Request proposals from your top firms and compare their fees, timelines, case studies and references.

8. Choose an Auditing Firm

After assessing the proposals, pick the most qualified firm.

Pre-Audit Questions to Ask Auditors

To ensure seamless auditing and to understand the process, ask your auditing firm the questions below: 

• What is your transition process? Determine how the new auditing firm will work with your previous auditor to ensure a smooth transition.
• What major accounting changes could affect the audit this year? Ask your auditor to explain recent regulatory updates and how they’ll affect the nonprofit audit.
• What is the scope of the audit? Determine all the documents the auditors intend to examine and how they’ll impact the audit’s goal.
• How can our team help to make the process smooth? Ask how your employees can help the auditor streamline and accelerate the entire process.
• What does your control assessment involve? Because the auditing firm will examine multiple transactions, ask them to describe their control assessment and its effects on their process.
• How do you determine materiality? An omission or misstatement is material if it impacts the decision of financial statement users. Find out how the auditing firm determines what is material or immaterial and its effect on the results.
• Do you anticipate independence issues? Ask if the auditing firm has any circumstances that could affect the independence of the audit. For instance, an independence issue can arise if the child of an auditor attends a nonprofit school.
• How do you define independence? Find out what methods the auditing company uses to define its independence. 

What to Expect During a Nonprofit Audit

After receiving satisfactory answers to your questions, here’s what you can expect to happen:

Document Requests

The auditor will ask for various financial records, such as:

• Bank statements.
• Unpaid invoices.
• Investment statements.
• Recent form 990s, 1099s, W-2s and other tax documents.
• Handbook of fiscal procedures and policies.
• Board meeting minutes.
• Records of grants received.
• Payroll information.
• Gift details.

To simplify audit preparation, you must organize several financial matters, such as:

• Reconciling bank accounts.
• Reviewing your vendors.
• Sending undeposited funds.
• Assessing accounts payable and receivable.
• Addressing uncleared transactions.
• Identifying coding errors.

The auditing firm may also require access to the organization’s accounting system to audit your financial records. Ensure to set up the right permissions when providing this access. 

Data Tests 

After gathering the necessary information, the auditor will proceed to test:

• Internal controls: They’ll review your organization’s policies and processes to ensure accurate and compliant financial reporting.
• Transactions: The firm will compare sample transactions from bank statements and supplier invoices to your financial records to confirm the data matches.

Inquiries

The auditor may have questions for your team during auditing to better test and analyze the data. So, ensure open communication with your employees to streamline the process.

Audit Reports

The auditor will document their objective view of the nonprofit’s financial health and compliance with financial reporting laws. They’ll also present their findings to the board, subcommittee or task force.

Here are some questions to ask the auditing company during this meeting.

• Did you encounter any hindrances that made you change the auditing approach?
• Were there any significant material deficiencies in the control system?
• Were there any disagreements between our teams during auditing?
• Did our team fail to make any proposed adjustments?
• What is your perception of our leadership’s attitude toward financial controls?
• What can we do to streamline the auditing process for you and us next year?
• Do you have any other matters you’d like to address?

Why Nonprofits Should Consider Conducting an Audit

Regardless of whether the law requires an audit, evaluating your financial and compliance status is significant because it:

• Demonstrates your commitment to financial transparency and accountability. 
• Builds trust with donors and other stakeholders.
• Enhances the nonprofit’s eligibility for grants.
• Identifies areas to improve financial strategies, management and internal processes.

Request a Nonprofit Audit From Marshall Jones

Leveraging over 30 years of experience, Marshall Jones offers expert nonprofit audits to help you understand your compliance and financial status. Our team is ready to answer all your questions and customize an auditing strategy that fits your specific goals.

When auditing a nonprofit organization, we observe accounting best practices to deliver accurate and objective results. Contact us online today to request an independent audit. We’ll help you save time, re-focus your resources and improve your operations.

Hiring and retaining talented candidates can be difficult in today’s marketplace. If the candidate you’ve offered the position to is juggling multiple offers, their selection might boil down to one thing — the company’s benefits packages. Your ideal candidate is most likely to choose the company with the most competitive benefits package. Does an Employer Benefit From a 401(k) Matching Plan?

What Are the Benefits of Having a 401(k) Package for Your Employees?

401(k) plans are unique investment accounts helping workers prepare for their future retirement. They allow employees to automatically input a percentage of their weekly, biweekly or monthly paycheck into a specific account designed to grow over time.

Offering a 401(k) benefits package isn’t mandatory as an employer, but there are several incentives to provide one:

• Qualified talent: Set yourself apart from the competition by offering talented candidates a comprehensive benefits package.
• High retention: Show your employees they’re valued by matching their investments in their future with a 401(k).
• Long-term company success: Your company’s success is directly tied to the talents, qualifications and capabilities of your workforce. 

To ensure you offer the best packages your company can, we recommend you annually review your benefits packages for new and existing employees. It’s also wise to allow new hires to transfer their previous 401(k) funds into their new account with your organization. Rolling over funds into a new employer’s 401(k) plan offers employees certain benefits to continue growing their retirement savings. 

How Do Employer 401(k) Matches Work? 

A 401(k) employer match means the employer has chosen to match a percentage of the employee’s contribution to their retirement account. This matching usually comes at specific rates, which tend to be between 3% and 6% of the employee’s salary. So, if 6% of their salary comes out to a 10% annual contribution, you will also make a contribution of $10. As of 2024, however, the maximum contribution amount for combined employee and employer contributions is 100% of an employee’s salary or $69,000 — whichever comes first. 

There are a few different ways you can match a 401(k) contribution, such as: 

• Dollar-for-dollar: This program means an employer will match employee contributions to the dollar, based on the percentage offered from the plan. So, if an employee contributes 3% each year and that amount comes out to $5,500, you will provide the same.
• Percentage-based: Also known as partial matching, this option ensures an employer will match 50% up to a certain percentage of the employee’s salary. When an employee contributes 5% of their annual salary, you will contribute 2.5%. 
• Tiered match: Some employers offer matches at different rate structures. Typical structures may take shape as matching 100% on the first 5% of an employee’s salary contributed before decreasing to 50% on the next 2%. 
• Non-matching: Some companies supply employees with 401(k) contributions regardless of the employees’ contribution to the account. 

These 401(k) employer match plans generally become available upon employment, and sometimes through automatic enrollment. However, employer contributions can occasionally be delayed until after one year of employment. 

How Do Employers Benefit From 401(k) Matches?

Employers offering competitive benefits packages are much more likely to attract a qualified workforce. This type of benefits package will ensure you stand out from the crowd for recruits who have more than one offer on the table, positioning your organization as one that cares about its staff. This offering will also likely lead to more satisfied employees, which can facilitate low turnover and improved efficiency. 

Offering employer 401(k) matches will also provide your company with beneficial tax savings. The money you and your employees contribute to a 401(k) is tax-deductible and accumulates on a tax-deferred basis. So, these contributions will decrease your taxable income for the year, therefore lowering your tax bracket and reducing your tax liability. Remember to contribute to your own 401(k) because this allows for salary deferral and profit-sharing contributions. 

Contact Our Dedicated Professionals for Your Accounting Services Today! 

At Marshall Jones, we are committed to providing quality tax advisory services for corporations and individuals. Reach out to our certified public accountants and advisors and benefit from our industry expertise. We have over 30 years of experience in tax preparation services. 

Reach out to us online today to get started! 

As a business owner, you may be missing out on potential tax reductions by not claiming the research and development (R&D) tax credit for your Georgia business. But what is this tax credit, and how can you apply for it?

In this guide, we will look at the R&D tax credit and provide details about how to apply for it, eligibility requirements and common documentation pitfalls to avoid. 

How to Apply for R&D Tax Credits

Before we get into how to claim the R&D tax credit, let’s define it. The federal R&D tax credit is a benefit that companies receive for carrying out activities related to the improvement, development or design of software, techniques, processes, formulas and products. Initially, many believed this tax credit only applied to larger businesses with research and development departments. However, it also applies to smaller businesses in various industries. It allows them to access dollar-for-dollar reductions in their domestic expense liabilities. 

Businesses can claim the R&D tax credit by filling out IRS Form 6765. Some industries that qualify for it include metal, chemical, manufacturing, architecture, pharmaceuticals, engineering, software development and aerospace and defense. A small business must either be a sole proprietorship, partnership or corporation not publicly trading its stock to be eligible.  

Common Documentation Mistakes

It is important to be aware of best practices when claiming the credit, especially in areas where issues commonly arise. The following mistakes in documenting qualified research can result in missed opportunities and create problems if your company is selected for an IRS audit:

Lack of Supporting Documentation

R&D tax credit studies are at their weakest when they lack contemporaneous supporting documentation. Studies are often performed after the tax year is closed out. Some studies simply comprise a report that summarizes the findings and a brief description, if any, of the qualifying business component. 

One of the objectives of an R&D tax credit study should be to answer a common question under audit: Why does this business component qualify? In order to properly address this question, it’s important to take a fluid approach to documentation. No two taxpayers are the same. No two projects are the same. As such, taxpayers may need to be creative in the identification of documents that show how projects meet the qualification criteria with specific emphasis on the presence of uncertainty and experimentation. 

Information such as project records, lab notes, design drawings, photos of the design/build and testing trials, prototypes and patent applications are needed to corroborate customary R&D expenses. Having access to this information is especially helpful in the event of an IRS audit.

Informal Documentation Process

If a company is considering claiming the R&D tax credit for a project, it would be useful to implement a formal documentation process before beginning. Because many companies don’t understand who should be documenting, what they should be documenting and when the process should be occurring, it’s often left as a task to complete at year-end. 

When this happens, a single person is often assigned the task of poring over hundreds of documents to find proof of qualifying expenses. The result is that expenses are often missed, and the potential credit value is diminished. To overcome this, a best practice would be to implement a process that collects relevant information on an ongoing basis, while the R&D activities are occurring. The more thorough the process, the greater the likelihood that qualifying expenses will be captured and used appropriately when claiming the credit.

Lack of Clarity

A common issue in the documentation process is that it’s unclear how the various expenses, personnel or other items relate to the R&D project. Remember that an IRS agent will not be familiar with your business, product or research process. Because they will be the primary judge of whether an expense qualifies toward the R&D credit, it’s essential to ensure the relationship between the expense and qualifying activity is clear. 

Avoid incomplete or inadequate descriptions, general statements that sound canned, and documentation that is not clearly related to the project. The more you rely on an IRS auditor to figure out how your documentation supports expenses, the greater the risk of exposure.

Work With Marshall Jones to Keep Your R&D Tax Credits

At Marshall Jones, we provide a unique combination of personalized service and expertise, making us the ideal choice for R&D tax credit services. We understand how complex navigating the R&D tax credit can be, which is why we tailor our services to meet your specific needs.

We have a proven track record of successful claims across various industries, which sets us apart from our competitors. We take a comprehensive approach to capture all potential qualifying expenses and maximize the credit value. Furthermore, we employ proactive documentation strategies to help you avoid common pitfalls and prepare for potential IRS audits. Contact us today for a consultation. 

Virtual currency — often referred to as “bitcoin” — is a mystery for many people but an everyday currency for others. As virtual currency grows in popularity, questions arise about its taxation. The IRS treats virtual currency as property and not as currency. This means that general tax principles that apply to property transactions apply to transactions using virtual currency.

What Is Virtual Currency?

Virtual currency is a type of digital currency that operates as a store of value, exchange medium or unit of account. Most virtual currency types have been created to replace government-issued currency in buying services and goods in the real economy. Bitcoin is one example.

A 2015 federal government report described how virtual currency is generally obtained. An individual can exchange conventional money for virtual currency, obtain virtual currency in exchange for the sale of goods or services or acquire virtual currency by serving as a “miner.” This approach requires significant computer processing power. While virtual currency may operate like “real” money, it does not have legal tender status in the U.S.

IRS Guidance

In Notice 2014-21, the IRS announced that it will treat virtual currency, officially referred to as digital assets, as property. The IRS explained that transactions using virtual currency must be reported in U.S. dollars for U.S. tax purposes. Taxpayers must determine the fair market value of virtual currency in U.S. dollars as of the date of payment or receipt. 

If a virtual currency is listed on an exchange and the exchange rate is established by demand and supply in the market, the fair market value of the virtual currency is determined by converting the virtual currency into U.S. dollars (or into another real currency, which in turn can be converted into U.S. dollars) at the exchange rate, in a reasonable manner that is consistently applied, the IRS explained.

In regard to paying taxes on crypto gains, taxpayers must report any income related to transacting in digital assets. If an investor transfers, sells or exchanges a digital asset, they must figure out their gains and account for them when making IRS returns. The same applies to writing off crypto losses, where the capital loss on a digital asset transaction must be reported as a capital loss. To calculate a loss or gain on your digital asset, you will require this information:

• The digital asset type
• Time and date of the transaction
• Basis of the sale or disposal of the digital asset
• Total number of units
• Fair market value in U.S. dollars when the transaction was done

Which Virtual Currency Transactions Are Taxable?

The IRS sets clear guidelines on how taxpayers should handle virtual currency. You are not expected to pay taxes for:

• Only holding your virtual currency in an account or wallet without making any transaction.
• Buying digital assets and not selling them.
• Transferring digital assets from one account or wallet you own to another that you also own.

However, you must pay taxes for making digital asset transactions, such as:

• Using virtual currency to pay a transfer fee.
• Transferring financial interest or ownership of a digital asset.
• Exchanging one digital asset for another. 
• Buying goods, services or property for virtual currency.
• Exchanging digital assets for U.S. dollars or other currency.
• Receiving virtual currency as an award or reward, an airdrop, staking and mining, or a payment for providing goods, services or property. 

If an employee or digital contractor is paid using virtual currency, they should report the value of the payment as wages. 

More Changes Possibly Coming

In November 2016, the Treasury Inspector General for Tax Administration (TIGTA) asked the IRS to review its approach to virtual currency. The IRS has established a virtual currency task force, but TIGTA reported that the IRS could better coordinate some of its intra-agency activities. TIGTA also found that while businesses and employers must report taxable virtual currency transactions, third-party information reporting documents did not provide the IRS with any means to verify whether the reported amounts were particularly related to digital assets.

TIGTA suggested that the IRS provide updated virtual currency guidance and revise reporting documents related to third-party information to determine the amounts of virtual currencies used in transactions that count as taxable. The IRS accepted the recommendations. Since then, the IRS has made several developments, and more guidance will be issued.

Connect With Us for Assistance With Virtual Currency Taxation

At Marshall Jones, we provide professional tax and accounting services to clients in Atlanta, GA. We will help you navigate the complexities of understanding taxes on digital assets, like reporting gains from Coinbase transactions and IRS guidelines on this process, to ensure you are compliant. Contact us today if you require personalized assistance with your virtual currency taxation needs.

Knowing which of the four 990 forms apply to your organization is important when you’re filing taxes. In this guide, we will break down which organizations file each 990 form to help you determine which option best suits your needs.

Types of 990 Forms

Almost all tax-exempt organizations will need to file an annual return, but the form you use depends on your financial activity. In total, there are four types of 990 forms:

• 990-N
• 990-EZ
• 990
• 990-PF

To determine which form you need to file, you must understand the basics of each one and the types of organizations that file them.

Form 990-N 

If your organization has less than or equal to $50,000 in gross receipts, you will file the form 990-N. Your gross receipts are the total amounts of income you received from all sources throughout your accounting period. You will not subtract any costs or expenses from this number. 

For your gross receipts to be considered within the $50,000 or less category, your organization should satisfy one of the following requirements:

• It has existed for at most one year and has received an exact amount of pledges from donors amounting to $75,000 during the organization’s first tax year.
• It has existed between the past one and three years and earned an average gross receipt of not more than $60,000 recorded during each of its first two tax years.
• It is three years old or younger and has gross receipts averaging at most $50,000 for the immediate former three tax years, including the current tax year.

It’s important to check if your organization is permitted to file form 990-N even if it records gross receipts of $50,000 or less. Several organizations in this income bracket are not permitted to file the 990-N form.

Form 990-N is entirely electronic, with no paper counterparts. It’s also the shortest of the five Form 990s and is mostly required to be filled by smaller nonprofits. 

Form 990-EZ

Form 990-EZ is filled by organizations exempted from income tax, and you’re welcome to file it if:

• Your organization has less than $200,000 in gross receipts.
• Your business’ total assets are less than $500,000.
• Your organization is recognized by the IRS under section 501(a) as exempt from income tax.

Tax-exempt organizations, section 527 political organizations and nonexempt charitable trusts often file 990-EZ.

You may also be able to file a standard 990 form in this instance, so it is beneficial to check all requirements for 990-EZ.

Form 990

Like Form 990-EZ, tax-exempt organizations can file Form 990. Most organizations, including educational, charity, section 527 political and scientific organizations, qualify here. If your organization has gross receipts equal to or greater than $200,000 and total assets equal to or greater than $500,000, you’re eligible to file Form 990.

Certain organizations are exempt from filing Form 990, even if they meet these requirements. These include:

• Churches.
• Religious organizations.
• Political organizations are not covered in section 527.

Your Form 990 will disclose your organization’s revenue, expenses, liabilities, and assets. It will also describe your organization’s mission and activities.

Form 990-PF

Form 990-PF is a private foundation’s annual information return that private organizations must file regardless of their financial statuses. A closer breakdown of organizations required to file Form 990-PF includes:

• Taxable private foundations under section 6033(d).
• Exempt private foundations under sections 6033 (a, b and c).
• Private organizations making a termination under section 507(b).
• Organizations that answer to private organization status whose private organization status applications are still pending by the time of filing Form 990-PF.
• Organizations claiming private foundation status who haven’t applied for exempt status and whose application isn’t yet registered under section 508(a) for legal recognition for exemption.

This form will include information about your private foundation’s:

• Financial activities
• Assets
• Rewarded grants
• Trustees and officers

Filling Form 990-PF is a little more complicated than most of the other forms. It requires careful scrutiny and understanding of the instructions for accurate filling.

Contact Marshall Jones for Tax Planning and Preparation Services

While you may understand the basics of 990 forms, it’s crucial to understand each form’s instructions and exceptions. Consulting with a certified public accountant (CPA) at Marshall Jones will help you ensure that your organization meets annual reporting requirements.

We’ve served Atlanta organizations with integrity and professionalism for over 30 years and boast remarkable experience and expertise. Our tax planning and preparation services will help you save time and money, and our certified public accountants and advisors are dedicated to serving you.

If you’re looking for exceptional tax planning and preparation services in Atlanta, please contact the Marshall Jones team today to schedule your first appointment.

Most of us are aware that certain income tax issues are more likely to result in an IRS audit than others, so what are they? It’s not common knowledge that the IRS can audit you for any reason, but there are commonalities that we typically see.

Common Groups That Typically Get Audited by the IRS

An IRS audit is much more probable with certain groups of businesses than others. You’re most likely to get an audit if you or your business falls into one of these categories:

• High-income earners who also have Schedule C: When you start earning higher business income, the IRS is mostly likely to visit you for an audit, especially if you have a Schedule C. Schedule C is a supplemental schedule to your Form 1040 that reports income and expenses from sole proprietorships and single-member Limited Liability Companies. 
• People who do freelance service work: If you do freelance work, including through the sharing community (think of Uber, Rover and Grubhub), you’re likely to be audited. If the numbers are outside of what is considered normal, the computers will pick them up.
• High-income non-filers: This group comprises high-income earners who don’t file required tax returns. A 2024 initiative focused on over 125,000 cases of unfiled returns between 2017 and 2021.
• Individuals who fail to report all taxable income: When IRS computers cross-check 1099s and W-2s and find underlying income reports, they’re likely to visit you for an audit. 

What Will Get Me Targeted by the IRS?

All accounting information included or excluded on your tax report could be a trigger for a visit by the IRS. The most common business actions that would quickly send them your way include the following.

Inconsistent Averages

Everything on returns is compared to averages, and any outliers will be targeted. Large losses on both individual and business returns will be flagged. If you’re a going concern and have enormous losses, they want to know how you support yourself or how you plan to stay in business.

Disproportionately Large Charity Donations

Speaking of averages, the IRS knows the average charitable donation for folks at your income level. So, if your charitable deductions are disproportionately large compared with your income, it raises a red flag. Don’t forget to get an appraisal for donations of valuable property, or if you fail to file Form 8283 for noncash donations over $500, you become an even bigger target. 

And if you’ve donated a conservation or façade easement to a charity, chances are good that you’ll hear from the IRS. Be sure to keep all your supporting documents, including receipts for cash and property contributions made during the year.

Missing Information

Missing information is another high-trigger item. The IRS matches every third-party reporting item to your return. This includes:

• Interest income
• Dividend income
• Gambling winnings
• Independent contractor income
• W-2 income

These are all issued to the IRS, so if you fail to include those figures on your return, you will be recognized.

Worker Misclassification

The IRS also targets independent contractors to determine whether they’re really contractors or employees. Worker misclassification is an important issue for the IRS and various state taxing authorities because many employers are perceived as not properly classifying their workers. By avoiding labeling their workers as employees, employers can avoid paying payroll taxes, minimum wages, overtime, health and retirement benefits and paid leave.

The IRS wants to ensure that traditional IRA owners and participants in 401(k)s and other workplace retirement plans are properly reporting and paying tax on distributions. Special attention is being given to payouts before age 59½, which, unless an exception applies, are subject to a 10% penalty on top of the regular income tax. 

The IRS knows that a significant number of filers make errors on their income tax returns regarding retirement payouts. Most of the mistakes come from taxpayers who didn’t qualify for an exception to the 10% additional tax on early distributions. So, the IRS will be looking at this issue closely. 

The IRS has a chart listing withdrawals taken before the age of 59½ that escape the 10% penalty, such as payouts made to cover very high medical costs, total and permanent disability of the account owner, or a series of substantially equal payments that run for five years or until age 59½, whichever is later

Filing Claim on an Amended Return

Filing a large claim for a refund on an amended return will almost always cause an audit. If the original return failed to include an item of income, you will want to correct it on an amended return. However, filing an amended return that claims credits that you didn’t claim on the first return will open up the whole return to scrutiny, so you end up being audited on other things not originally at issue.

This is particularly true where the amended return raises new issues. For example, a return might be amended to claim R&D credits that weren’t on the original return. The IRS will likely audit for that particular issue but will open up the entire return for questioning.

Taking Steps Forward

So, what do you do if you’ve been flagged for an audit? We always recommend discussing this with a CPA. Some audits are extremely minor, where they may just ask you to pay tax on that 1099 you forgot, and some are more serious. 

Always know that this is not a personal attack on you and may require some extra explanation. This is why it’s always important to keep your tax return supporting records for at least 3 years from the date you filed your original return or 2 years from the date you paid the tax (whichever is later).

Get Professional Help from Marshall Jones for Accurate Accounting

The IRS targets individuals with inaccurate accounting procedures, which may range from issues with claims on amended returns to a lack of knowledge to report appropriate taxable income. With full-service accounting, you can streamline your books and resolve most of the questionable reports that could put you on the ladder of an IRS audit.

At Marshall Jones, we can help you get back on track with your accounting and avoid audits. Whether you’re in the nonprofit space or the construction and real estate industry, we can help you with a wide range of full-time accounting services, including bookkeeping and 401(k) audits. Contact Marshall Jones today to get started.

Blockchain is the underlying technology behind the exchange of cryptocurrencies like Bitcoin. However, blockchain’s applications go beyond crypto. As this technology continues to expand, it’s important to understand what blockchain technology is, how it works and why it’s important for businesses and nonprofit organizations.

What Is Blockchain?

Blockchain is a method of recording data or information that makes it difficult or impossible for the system to be altered, manipulated or hacked. This is achieved by creating an immutable ledger that enables secure transactions across peer-to-peer networks. The data cannot be modified or deleted without consensus from the network.

Blockchains can make information or data in any industry immutable, not just cryptocurrency. The use of blockchain has exploded since the introduction of Bitcoin in 2009.

A blockchain is made up of blocks, each comprising several transactions. Each ledger receives a copy of transactions on the blockchain network, and once each block is confirmed to be true, it’s added to the end of all preceding blocks — making it a blockchain. This system or sequence is known as distributed ledger technology (DLT). In addition, the blockchain is decentralized because several users govern the entire database.

Features of Blockchain Technology

Blockchain technology has the following features:

• Decentralization: Blockchain is not controlled by a single individual, group of people or organization, making it different from banks and traditional financial institutions.
• Immutability: No participants can alter or modify recorded transactions in the blockchain. If you enter a transaction with an error, you must add a new transaction to correct or reverse the mistake. Both transactions are visible to the network.
• Consensus: Participants in the network must grant you consent before you can record a transaction.

How Blockchain Works

Understanding blockchain technology means dissecting its intricacies and how it operates. In some ways, a blockchain is similar to databases or spreadsheets that store information you enter. The main difference between a blockchain and a spreadsheet is how the data is organized and accessed.

A blockchain has scripts that perform the typical tasks in a database, such as entering, accessing and storing data. A blockchain is also distributed, which means several copies are stored on many machines. All the copies must match for the data to be valid.

A blockchain collects information about a transaction and enters it in a block, the same way you’d enter information in a spreadsheet cell. Once the block is full, the information is run through an encryption algorithm, which creates the hash. The hash is a cryptographically generated code — hexadecimal number. The hash is entered into the next block header and is also encrypted. This process creates a series of blocks chained together.

Types of Blockchains

There are four main variations of blockchains:

• Public blockchains: These are permissionless blockchains, and anyone can join them. Members of the blockchain have equal rights to read, edit and validate the blockchain. Examples of public blockchains are cryptocurrencies like Bitcoin, Litecoin and Ethereum.
• Private blockchains: Private blockchains, also called managed blockchains, are partially decentralized permissioned networks controlled by a single organization. The organization decides who can be a member and what specific rights they have in the network. The digital currency exchange network Ripple is an example of a private blockchain.
• Hybrid blockchains: These blockchains combine elements of both private and public blockchain networks. A company can set up permission-based private systems alongside a public system. This arrangement enables the organization to control access to specific data in the blockchain while keeping the rest of the data public.
• Consortium blockchains: These are blockchains controlled by multiple organizations. The organizations decide who can access the data or submit transactions. This is the ideal type of blockchain for businesses when all participants have a shared responsibility for the blockchain and need permission. 

Benefits of Blockchain 

The main benefits of blockchain technology include:

• Increased accuracy and transparency: Blockchain provides a single source-of-truth ledger, making transactions on the platform transparent. Immutable transactions are recorded chronologically, and there is no human involvement in verification, reducing the potential for error. 
• More security: Digital signatures or hashing algorithms make it possible to conduct fraud-free transactions. Only authorized users can unlock data meant for them, and the data stored on blockchains cannot be changed.
• Higher efficiency: Blockchain technology streamlines operations by reducing bottlenecks and eliminating intermediaries. It also enables reliable cross-team communication. Automatic verification processes in smart contracts reduce transaction costs, optimize data integrity and enable timely processing times.

Challenges of Blockchain

These are the main drawbacks of blockchains:

• Concerns about regulation: Blockchain regulation varies by jurisdiction and is still uncertain in many countries. For example, blockchain technology allowed overseas voters to vote in the November 2018 midterm elections in West Virginia. 
• Transaction limitations: The number of transactions for each node is limited.
• High energy costs: The computational power needed to perform certain functions consumes large amounts of electricity, leading to high operational costs and environmental concerns. 

Why Blockchain Is Important 

Blockchain is a reliable technology for delivering accurate information more quickly. The data is stored on an immutable ledger that can only be accessed by permissioned network members. A blockchain network can track payments, orders, production and accounts. Because of its capabilities, several industries apply blockchain technology in their operations.

Banking and Finance

Check processing in banks can take up to three days. Integrating blockchain technology into banks allows consumers to enjoy faster transaction processing in minutes or seconds. The blockchain transaction timeframe is the time it takes to add a block to the blockchain, regardless of the time of day, whether it’s a weekend or not, and even on holidays. Banks can also share transactions with other institutions securely and quickly. 

Cryptocurrency

Cryptocurrency is the most widely known application of blockchain technology. People can buy, exchange or spend cryptocurrencies through blockchain technology, which operate without a central authority. In contrast, the Federal Reserve controls the U.S. dollar. 

Smart Contracts

Smart contracts are self-executing contracts that enact automatically once conditions are met. For example, a product is automatically released to the buyer once the seller and buyer have met all specific parameters for a transaction or deal. 

Health Care

Health care providers can use blockchain technology to store patient data securely. In addition, the patient records stored on blockchains cannot be changed and can only be accessed by authorized individuals. 

Get Blockchain Technology Advice

As a business owner, you’re always looking for ways to serve your customers better. Faster and more secure transactions or record-keeping through blockchain technology could be one way of improving your business operations. You can also use smart contracts for efficient transactions. Contact Marshall Jones for advice on blockchain. We are certified public accountants and financial advisors serving Atlanta businesses and nonprofits.

As your business grows, you may need to hire more employees, acquire investors or optimize your financial planning for the future. The accrual accounting method enables you to prepare for these tax and financial changes more efficiently.

Whether you handle your accounting in-house or outsource it to professionals, it’s a good idea to clearly understand this accounting type. Our guide provides more insight into the accrual method of accounting so you can decide if it’s right for your entity.

What’s the Difference Between Cash and Accrual Accounting?

There are two primary accounting methods for nonprofit organizations and small businesses — accrual and cash accounting. Both methods are similar in that they track transactions so entities can manage their finances. However, they differ in the following ways:

Accrual vs. Cash Accounting

• Accrual accounting: Businesses that use the accrual method track income and expenses when they provide or receive a product or service. For example, a real estate company will record property management services in the books even though it will receive payment at the end of a month. If you follow the accrual method, post debited journal entries in the expense account and credited entries in the accrued expense liability account.
• Cash accounting: With this method, businesses recognize income and expenses only when they receive or pay them. In this case, the real estate company would only record the transaction for the property management services when it receives the money from the property owner.

The Internal Revenue Service (IRS) indicates that tax shelters, partnerships with a corporation, and corporations other than S-corporations must generally use the accrual method. Other business structures can use the cash accounting method but may need to transition to the accrual method as their operations become more complex.

Pros and Cons of Cash Accounting

Pros: The key advantage of the cash method is simplicity. You can simply look at your checkbook and sales receipts to add up your profits and losses. You also know exactly how much cash you have at any given time.

Cons: The downside is that when you receive or send cash may not accurately reflect when you earned or incurred an expense.

Pros and Cons of Accrual Accounting

Pros: The key advantage to the accrual method is smoothing out your profits and losses. When you make or receive a large payment for something that happened over a period of several months, accrual accounting divides the transaction over those months.

Cons: The downside to the accrual method is that it takes extra work to figure out how all your transactions should be recorded in your books. You also need to keep separate cash flow statements to know how much cash you have on-hand at any given time.

Top Benefits of Accrual Accounting

Many nonprofit organizations and start-ups choose the cash accounting method because of its simplicity. However, there are several advantages to opting for accrual accounting from the beginning. Here’s an overview of the benefits:

• More accurate snapshot of finances: Choosing this method offers you a real-time view of how much money is coming into the business. An accurate snapshot of your business finances will help investors and grant-makers make more informed decisions.
• Better insights into items sold on credit: The amount of time customers have to pay off credit varies. Adopting an accrual-based accounting method helps you keep track of sales in the month they occur.
• Improved financial forecasting: Since you record transactions as they happen, you have a better idea as to which months offer high or low turnover. These trends help you prepare for fluctuations in sales.
• Transparency ahead of financial audits: A more accurate dataset allows you to compile relevant budgets and put strategies in place for growth. Financial reports like these help you prepare for long-term success.
• Potential to defer tax payments: You are liable to pay taxes once you receive the income. If you receive money after the tax year, you will only need to make these payments in the following tax period.

When Should You Consider Using Accrual Accounting?

Keeping a consistent accounting method is important for the IRS — but which method should you choose? Here are some questions to consider if you’re contemplating the accrual method:

• Do you handle many transactions?
• Are you planning a long-term project?
• Is your main goal to improve financial strategies?
• Do you intend to apply for any grants?
• Do you have an upcoming financial audit?

If you answered yes to these questions, it may be in your best interest to adopt an accrual accounting system. Choosing this method from the start will equip you for future growth.

Steps to Transition to Accrual Accounting

Some businesses choose a cash accounting system at the start and transition to an accrual accounting method when the need and resources arise. Learn more about the steps you need to take for a seamless process.

1. Initiate a Financial Audit

A financial audit helps organizations ensure compliance and financial accuracy. Audits will also reveal any inefficiencies in your current accounting system.

If you use cash accounting yet discover obvious gaps during the audit, you will have more reason to transition to an accrual-based method.

2. Compile Relevant Documents

You will need to prepare several financial documents when you adopt the accrual system. Some of the documents you will need include:

• Balance sheets detailing your assets and liabilities
• Income statements reflecting your income and expenditures
• A breakdown of your inventory
• Cash flow statements to highlight money going in and out of the organization
• Records for accounts receivable and payable
• Any information detailing loans or other long-term debt plans

3. Update Financial Policies

Your accounting system will impact several details about your tax return, such as the transactions you include and when you submit. Update your financial policies and procedures to ensure you remain up-to-date with your compliance.

Taking this necessary step will help ensure all team members are on the same page and limit the likelihood of costly penalties.

4. Choose How You Will Manage Your Accounting

If you plan to handle your accounting yourself, you’ll need software that supports the accrual method. In addition, you will need to note these changes with the IRS by completing the relevant form.

If an approved change results in an adjustment to your taxable income, you will receive credit for the difference/payment in the tax year in which the change is approved. The company can also elect to recognize one-fourth of the adjustment in the four succeeding years starting with the year of the adjustment.

For example:

Company Z, a calendar-year corporation, has a net positive section 481(a) adjustment of $320,000 at the end of year 20X1. If Company Z initiates a change in its accounting method under revenue procedure 97-27 for the 20X2 tax year, the company will recognize one-fourth of the 481(a) adjustment in the four succeeding years, start with 20X2. However, if Company Z is under examination for 20X1 and the IRS makes an accounting change adjustment, the entire section 481(a) adjustment will be taxable in the year of examination.

5. Establish a Timeline

Business transitions — especially adopting a new accounting system — are not an overnight endeavor. Create a realistic timeline detailing when you plan to integrate the accrual system formally.

Appointing relevant people to carry out these goals will ensure greater accountability while helping your organization stay on track.

Marshall Jones Makes Transitioning to the Accrual System Easy

Successful businesses and nonprofits are ever-evolving. If you started your organization with the cash accounting method and now realize it’s time to migrate to the accrual system, we can help!

Marshall Jones offers an array of accounting services, helping nonprofit organizations, construction companies and real estate businesses manage their books with ease. With our expert team at the helm, you can focus on what you do best while we track and manage your finances. Learn more about our services or get in touch with our team for more information on accrual accounting.

Reviewing financial statements to board of directors is a critical task board members may undertake to evaluate an organization’s compliance and budgetary status. To best identify potential risks and promote optimal financial management, it’s wise to pay attention to some key considerations. Follow these best practices for thoughtful, accurate evaluations of organizations’ financial situations.

Red Flags in Financial Statement Analysis

When an organization’s financial report to board of directors are under review, analysts should watch for a few markers of concern. Noticing potential areas for improvement can help you proactively address potential issues and manage the proper solutions promptly.

Throughout your organization’s evaluation, look out for red flag warning signs such as:

• No liquidity reserve policy: While 33% of nonprofits don’t have a strategy to navigate recession, ensuring your organization develops the resources and plans necessary to recover is critical.
• Negative cash flows from operations: Watch for negative cash flows — 50% of nonprofits have operating reserves for less than a month, and it’s vital to build up those resources.
• Internal borrowing of donor-restricted funds: Organizations should maintain sufficient financial resources to support net assets with donor restrictions.
• Negative or insufficient working capital: Among nonprofits, 7-8% have more liabilities than assets and are technically insolvent. They need to build up sufficient working capital to improve financial stability.
• Extended line of credit: Having an extended line of credit can increase financial risk, so it’s wise to address this concern strategically.
• Debt covenant violations: Organizations need to comply with debt covenant terms and avoid issues from increased collateral, interest rates or penalty payments.

What to Look for When Reviewing Financial Statements

While watching for red flags to investigate further, you’ll also want to evaluate metrics in the financial report to the board of directors that indicate the institution’s overall financial health. Knowing which issues to prioritize for examination can help you conduct a more thorough and valuable review for the organization. 

As you review the financial report for the board of directors, ask these essential questions to ensure a thorough assessment.

• Has the organization’s endowment or investments recently suffered significant losses due to COVID-19 fears?
• Do the footnotes properly tell the company’s story, accurately representing financial transactions and decisions?
• Has management properly read, reviewed and taken ownership of the financials?
• Are new accounting pronouncements that apply to your company being adopted on a timely basis?

 Keep in mind that newer pronouncements for nonprofits include the financial reporting standard and two standards for revenue recognition (ASC 606 and ASU 2018-08). The new lease standard will also be applicable in a couple of years.

Contact Marshall Jones for Trust Compliance and Accounting Services

Marshall Jones Certified Public Accountants And Advisors has been serving the Atlanta area for over 30 years, and we are committed to providing exceptional client support and expert services. We offer a range of tax and accounting services to help businesses and individuals manage their finances more successfully and accurately. With a highly accessible team, rapid response times and extensive industry expertise, we pride ourselves on meeting your requirements with quality solutions and support.

Whatever your financial management needs, our team is here to help you move forward. For more information on how to prepare a comprehensive financial report for a board of directors, speak with one of our representatives today.

You’ve likely put aside money toward retirement to supplement social security and help ensure financial stability when you leave the workforce. Yet, have you thought about how your tax situation can impact your funds? To make the most of your retirement income stream, you’ll need a solid understanding of how all your assets work together and the tax implications of each.

How to Plan for Taxes in Retirement

Develop successful retirement tax planning strategies by starting with the fundamentals:

1. Know Your Tax Bracket

Retirement savings generally fall into two categories — tax-deferred and after-tax. Under a tax-deferred account, such as a traditional IRA or employer-sponsored plan, you’ll pay taxes at your current bracket once you begin withdrawals. After-tax accounts, like Roth IRAs and regular savings, represent dollars you’ve already paid taxes on.

Younger workers may find themselves in lower brackets, like 10 or 12%, before transitioning into the 22 or 24% brackets as their earnings increase. High-wage earners can pay as much as 32 to 37% in taxes. 

Each of these scenarios calls for different retirement tax planning strategies, so it’s best to seek expert advice for your unique situation.

2. Diversify Your Account Types

For many, future tax brackets may differ from current ones, calling for diversifying among different account types for maximum withdrawal flexibility.

With a mix of pre- and post-tax assets, you and your tax advisor can create retirement tax planning strategies with more control over your taxable income in retirement.

3. Know the Social Security Rules

While social security can provide an income stream as early as age 62, that may not be the best time for you to start collecting it. Opting for an earlier election can permanently reduce your expected monthly benefit. 

Social security benefits may be subject to taxation for those with significant income or plans to work after reaching full retirement age.

Marital status, such as divorce and widowhood, can also affect the ideal timing, so it’s best to consult with a financial professional for advice specific to your situation for retirement tax planning strategies.

4. Use Your Retirement Assets Wisely

Under the current IRS rules, you must begin withdrawing traditional tax-deferred assets once you reach age 72. The amount you take — called your required minimum distribution (RMD) — changes each year and is a portion of the overall value of your IRA. 

Roth IRAs and Roth-based employer-sponsored plans have no RMDs, and withdrawals are tax-free once you meet the eligibility criteria.

Work with a retirement tax professional to develop a withdrawal strategy combining assets from both account types to help keep your income in the lower tax brackets.

5. Consider a Roth Conversion

With their tax-free withdrawals and no RMDs, Roth IRAs can be a powerful way to maximize savings and add diversity to a mostly pre-tax retirement portfolio. Many traditional IRA owners can convert all or a portion of their tax-deferred savings into a Roth account and pay taxes on the value at the same rate as ordinary income.

Consult with a tax-planning specialist to ensure a conversion doesn’t unexpectedly push you into a higher tax bracket.

Get Retirement Tax Advice You Can Trust

Marshall Jones has served tax planning and preparation needs in Atlanta for over 30 years, operating with a dedication to service, quality and integrity. We offer a full suite of services for individuals and companies across numerous industries.

Contact us online for more information or to request an appointment to develop your unique retirement tax planning strategies.

Many people use auditing and assurance interchangeably. Accounting firms often group these services together, as assurance typically comes directly after auditing.

Although the processes are largely interrelated, there are apparent differences. The distinctions lie in their nature, purpose, use and scope. Additionally, the people who perform audit and assurance services may differ in some ways.

Because both services are integral to business operations, it’s essential to compare them and answer some commonly asked questions. Learn about their similarities and differences and why both are important for your small business or nonprofit organization.

What Is an Audit?

An audit examines an organization’s financial records, transactions and internal controls by a qualified professional, such as a certified public accountant (CPA). There are different types of audits, each serving different purposes. However, they all help stakeholders validate that the subject matter complies with established rules and best practices. 

The most common types of audits include:

• Financial audits: External auditors conduct financial audits to assess the company’s financial statements and reports. These include income statements, cash flow statements and balance sheets. Financial audits are usually annual, so ensure you close out the fiscal year before proceeding to get accurate reports.
• Tax audits: The Internal Revenue Service (IRS) conducts tax audits to ensure compliance with tax laws. When preparing for tax audits, it’s crucial to understand the scope and purpose. This allows you to gather the relevant documents and answer the questions appropriately.
• Reviews of financial statements: Financial statement reviews focus on the business’s financial information for legality, accuracy and accountability. They have a limited scope and are usually less expensive than full audits.
• Compliance audits: These audits ensure a business adheres to established standards or regulations. Compliance audits also help identify gaps and develop policies to safeguard stakeholders’ interests.
• Internal audits: Companies conduct in-house audits to check compliance with internal policies and procedures. The primary goal is to identify improvement areas within the organization. Internal audits cover different areas, such as financial reporting, risk management, regulatory compliance and operational processes. 
• External audits: External auditors with no company affiliation examine the processes and provide unbiased reports. Since these auditors have no association with the organization, their conclusions are generally credible. External audits may cover areas such as financial and tax compliance.

What Is Assurance?

Assurance is an independent process that allows professionals to assess the accuracy of audits. It usually comes after audits to enhance the reliability and quality of information for decision-making purposes.

Assurance services can extend to various areas, including finance, tax and legal. In terms of finance, assurance services may verify the accuracy of income statements, cash flows and balance sheets. In a broader sense, assurance may reexamine internal policies and procedures to ensure compliance with regulations, established standards and industry best practices. 

Assurance primarily aims to enhance confidence among stakeholders, including business owners, investors and managers. Having a professional review reports, processes and controls provides added credibility. Organizations may also voluntarily seek assurance services for accountability and transparency purposes.

Audits are the highest form of assurance, giving an in-depth view of the organization. CPAs and advisors examine transaction irregularities and risks and provide recommendations to improve operations. A comprehensive assurance service may include financial projections, payroll reports and tracking.

Assurance engagements usually require three participants— the company, beneficiaries and independent auditors. Beneficiaries include third parties such as investors, lenders or insurers. The auditor works with established criteria, such as the International Financial Reporting Standards (IFRS) or other relevant auditing standards. Then, they report the findings to the intended audience.

What Are the Differences Between Audits and Assurance?

While audits and assurance are largely connected, these services differ in the following areas:

1. Nature

The audit process reviews an organization’s financial records and internal controls to ensure accuracy and compliance with regulations and standards. Assurance services are usually broader in scope and include the audit process itself. Assurance covers various engagements where an independent professional evaluates information and processes for reliability.

2. Purpose

An audit ensures reports or processes adhere to the laws, industry standards or internal policies. On the other hand, assurance enhances the credibility and reliability of information for decision-making purposes. It provides a second independent assessment of various organizational aspects.

3. Uses

Audits have different use cases, from financial to legal and internal efficiencies. Assurance is generally used to establish a company’s performance or risk level. Audits’ target audience includes internal and external stakeholders. Assurance is often required when a third party is involved.

4. Agent 

Internal or external auditors may perform audit services, depending on the type of audit. External or independent auditors usually perform assurance. The independent auditors conduct detailed assessments and provide unbiased reports. They also make recommendations on how the company can mitigate risks.

5. Scope

Audits are subsets of assurance services and usually have a narrower scope. Assurance is comprehensive but can target a specific aspect of the company’s operations. By default, assurance has a broader scope.

What Are the Similarities Between Audits and Assurance?

Audit and assurance services overlap in the following ways:

1. Professionals

Both audits and assurance services involve trained auditors, some of whom are certified professionals. A classic example is a CPA, who writes and passes an examination administered by a recognized accounting board. The accounting board regulates the industry and requires the CPA to comply with specific standards. While professional evaluations may serve different purposes, they typically seek to provide assurance on the reliability and credibility of information within the organization.

2. Objective

An audit is an aspect of assurance with a similar objective — enhancing confidence in the information provided. Audits and assurance ensure reports are accurate, reliable and compliant with relevant standards or regulations. 

3. Reporting

The outcome of audits and assurance processes is the issuance of reports. The reports communicate the findings, conclusions and recommendations of the professional. Auditors create reports after collecting and reviewing documents, such as financial reports. Finally, the auditor submits the reports to the relevant stakeholders, who rely on the assessments to make informed decisions.

Contact Marshall Jones for Audit and Assurance Services 

Audit and assurance are related services, but they differ in their nature, purpose, use and scope. Assurance requires external professionals, while companies can conduct audits internally. Regardless of the situation, seeking expert guidance for accuracy and reliability is best. 

Marshall Jones is a full-service accounting firm that provides auditing and assurance services for businesses and nonprofits. Our professionals have decades of industry expertise. Contact our team today to learn more about how we can help your small business or nonprofit!