Tips for Accounting Students From the Partners at Marshall Jones

As a college student, you have a lot of navigating to do when entering the workforce. That’s why the partners at Marshall Jones want to offer you some tips as an accounting major! Since beginning their own accounting careers, our partners have gained valuable knowledge, and they want to bestow their wisdom upon you. Consider these tips as you continue your accounting education and career.

1. Study, Study, Study

As a student, you’re probably no stranger to studying. However, much of the studying mentality revolves around studying material to pass a test. Our partners at Marshall Jones want to suggest that you should study to learn, not just to pass your exams. One of our audit partners, Nathan, admitted, “The thing I realized after I graduated was that the material actually mattered in the field I was pursuing. I had to research things I should have known because of that test mentality that I had [in college].”

Studying to learn the material will benefit you in the future and make you more knowledgeable after your exams end. It also allows you to hone highly sought-after accounting skills before entering the field. Rather than spend time relearning these skills later, you should take the free time you have now to ensure you’re ready for the accounting world.

2. Know Which Degree You’re Getting

Some schools have more than one version of an accounting degree. To become a certified public accountant (CPA), you need a certain amount of credit hours. While a few states allow accounting majors to take the CPA exam after completing the standard 120 credit hours of a bachelor’s program, most states require 150 hours through a master’s program. Make sure you know what degree you need. 

Either way, try to complete all your schooling at once so you’ll be eligible to get your CPA license right away.

3. Network With Professionals

Randy, another audit partner at Marshall Jones, emphasizes that “relationships are everything.” Join honors fraternities, attend expo events and take advantage of professional gatherings. These are all great ways to network and meet new people who could potentially help you with job or advancement opportunities. Nathan also suggests, “Make sure to focus your attention on networking events that will benefit you in the search for your accounting position,” instead of attending just any networking event.

4. Embrace Speech Classes

We know public speaking classes are among the least popular courses. However, having confidence when speaking with peers, coworkers and clients is an important skill to have. Kristen, a partner of firm administration, shares, “Clients are the backbone of everything that you do. So, you want to be able to talk with them, build relationships, build the trust with them. A lot of that comes from just how you explain things or discuss things with them.” 

You’ll do a lot of speaking as a public accountant, so use speech classes as a beneficial tool to help build skills early. 

5. Know Mistakes Can Lead to Future Success

We think this tip is important because of its versatility. Randy reminds accounting students, “Realize that mistakes are often steps to future success. Everybody makes mistakes, but the key is to learn from them so that they’re not repeated.” Embrace the possibility of making mistakes, as they’re meant to teach you valuable lessons, even if they don’t always seem like it in the moment.

6. Be Involved and Build Your Resume

During your time in college, be sure to join clubs and become a leader in that club if possible. Susan, one of our tax partners, tells students that “belonging to clubs demonstrates personal skills, [so] if you are an officer of the club it demonstrates leadership skills, [and] charitable activities show character.” These are all great ways to build your resume, which Susan suggests is something accounting students should begin to think about during their first couple years of college.

7. Get Internships

One of the most important tips the partners at Marshall Jones have for accounting students is to get internships — more than one if possible. These opportunities can be valuable for several reasons. Susan encourages students to get more than one internship because you’ll have “more information to determine the precise area of accounting you would prefer.” 

Kristen also suggests getting an internship because “you’re going to get a firsthand feel for how CPA firms work, especially if you’re interested in working in public accounting.” More importantly, internships provide you with valuable work experience, and you can apply the things you’re learning in school. 

These positions allow you to understand the nature of the business and what you should expect from this field. 

8. Understand the Accounting Industry

Get to know the accounting industry. Understand the different divisions of accounting — auditing, tax and consulting — to determine which might be most interesting to you. Think about what you want in your career. After five years with a CPA firm at the beginning of his career, Charlie, one of our founding partners, realized that real estate development was something he was interested in, so he made the change. Therefore, he suggests that if there’s a specific industry you know you’re passionate about, pursue it.

Greg, a managing partner, encourages accounting students to understand the types of firms because they’re all different. “CPA firms often take on the personalities of their leading partners, and this leads to a great variety between CPA firms and their cultures.” Because of how different every firm can be, it’s also essential to understand yourself so you can find a firm that will be the best fit for you as you build your accounting career.

9. Realize There’s No Rush to Figure It All Out

If you’re struggling to determine what aspect of accounting you’re passionate about or feel unsure about which firm you want to join, we’re here to assure you there’s no rush to have your whole career figured out. Greg emphasized this idea: “…The answers about what kind of firm you want to join and what kind of accountant you want to be cannot always be known until after you start your career.” It’s important to remember many people don’t have the answers at first — and that’s OK!

Start Your Career at Marshall Jones

As you approach the end of your college career, consider starting your accounting career at Marshall Jones. Our team of CPAs and advisors creates a supportive environment for you to find what you’re passionate about. Learn more about our team to discover why we’re the right move for your career.

How to Review Your 5500

The Form 5500 is an annual report that is filed with both the IRS and the DOL. It has information that relates to the operation and compliance of a retirement plan, such as a 401(k) plan. If your company has a retirement plan, it will likely need to file this form every year. Typically, this is July 31st (, but can be different depending on the plan year end of the 401(k) plan. There is one extension allows for 2 months and 15 days, which ends up on October 15th

Generally, these retirement plans have a third-party administrator that is going to prepare this form as part of its responsibilities. However, as the plan sponsor, the company who created the retirement plan, it is ultimately your responsibility to understand, review, and approve this form prior to filing.

Here are a Few Tips to Help You Review Your Form 5500

  1. Review all the information regarding page 1 as it concerns your name, the name of the plan, the type of plan it is, and other important business information.  You would likely check this in the first year of filing, and in subsequent years, you would just review briefly to ensure it is still correct, like addresses, etc.
  2. On page 2…
    1. There are lots of numbers of participants. You will need to ask the preparer for their reports that have these numbers, and you can review the lists to ensure all employees that should have been recorded here are recorded.
    2. There is one very important number, Line 5. If the amount of this line exceeds 99, then you will need to request a proposal for audit services on your retirement plan.
    3. Review line 10 a and b to determine which schedules you will need to review later in the return.
  3. Schedule A – This section describes any company or person who benefited from commissions related to the operation of the plan. Typically, in this section, you will see financial advisors, investment companies, insurance companies, etc. All of these people would have sent a tax document that shows their commissions. To review, you would need to ask for the forms in order to verify the amounts recorded.
    1. On page 3, you might see a breakdown of any annuities that are a part of the plan. Typically, this is where insurance contracts are reported (Line 4) and Pooled Separate Accounts (Line 5).
    2. If there is an annuity with unallocated funds in a general account, you will see a schedule starting at 7b for the prior year ending amount, all the various activity, and the ending amount on 7f. 7f should tie to the amount on Line 4. You can pull your investment statement for the year, and look at the annuity to determine if the proper amounts were recorded.
  4. Schedule C – This section describes any company or person who benefited from fees related to the operation of the plan. Typically, in this section, you will see third-party administrators, auditors, investment companies, etc. All of these people would have sent a tax document that shows their fees. To review, you would need to ask for the forms in order to verify the amounts recorded. Note: if the company providing the plan pays for the audit or the TPA fees, those fees do not show up here; fees only paid by the plan show up here.
  5. Schedule D – This is a list of all the MTIA, CCT, PSA, and 103-12 IEs that are involved with the plan. If information is here, you need to get your investment statement for the year, and match up the items from that list to the items in this Schedule. This form basically shows the value of each investment vehicle that is related to the items that are included here.
  6. Schedule G is usually required if something went wrong during the plan year. Any information included on this Schedule needs to be reviewed with your third-party administrator, so they can explain the transactions reported. The most likely is going to include nonexempt transactions that you are going to be well aware of prior to the filing of this form. Make sure you understand all of the transactions listed.
  7. Schedule H and Schedule I – The difference between these forms are determined by the size of the plan, but they do report the same information, which is the activity and balances of the plan. Compare the balances and activity listed on the schedule H and I to the investment statement for the year. There should be no differences.
  8. Schedule MB and SB – In a defined benefit plan, you are going to have a valuation based on an actuarial report. Those balances and other operating aspects of the plan (number of participants, liabilities, contributions) and assumptions of the actuarial report get reported during this Schedule. This only pertains to defined benefit plans and will not be typical of a 401(k)-like retirement plan.
  9. Schedule R – This form is going to have information about distributions that were not cash, information about funding minimum amounts into a plan, like an ESOP, and other information regarding defined benefit plans and ESOPs.  Make sure to talk with your third-party administrator to understand any information presented in this form. It is unlikely to be used, unless something significant happens.
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Want More Help? Talk to the Professionals at Marshall Jones!

If you have followed the above advice, you will have a much greater understanding of your retirement plan, the form 5500, and have the confidence to complete reviews of the Form 5500 and all of its schedules. If you have questions or want further assistance, contact Marshall Jones today!

What Should a Non-Profit Board Ask of Their Auditor?

An audit is an independent review of your non-profit organization’s financial statements and records. The goal of an audit is usually to determine if a company is adhering to generally accepted accounting principles or GAAP. GAAP was created by the Financial Accounting Standards Board and is the standard used by the U.S. Securities and Exchange Commission.

There are several reasons why your non-profit might schedule an audit, such as ensuring you are abiding by state or federal laws or providing evidence of financial transparency to current and potential donors. If your organization receives grant funding, submitting the results of an audit might be a requirement.

It’s important to go into the audit process with as much information as possible, particularly about the auditor and the methods they use. Here are some questions to ask before the audit begins and after it’s completed.

Questions to Ask During the Planning Stages of the Audit

Some questions to ask as you begin the planning stages of the audit include:

1. How Are You Going to Handle the Prior-Year Auditor?

If this is the first time your company is working with a particular auditor, ask them how they will approach the auditor you worked with previously. What will the auditor do to smooth the transition?

2. How Does Your Audit Plan for This Year Differ From Last Year?

If you’re working with the same auditor again, ask them if they are taking a different approach or what they might be doing differently this year.

3. What Are the Major Accounting Changes That Could Affect the Audit This Year?

Regulators make adjustments from year to year. Ask the auditor to describe any changes and what those changes mean for your company’s audit.

4. What Is the Scope of Your Audit?

An audit’s scope is the range of the records that the auditor examines. For example, the audit could cover an entire fiscal year or a quarter. In addition to asking about the scope of the audit, ask the auditor how the scope will affect their ability to discover fraud, errors, problems with internal controls or illegal acts.

5. In What Ways and Where Do You Think Our Staff Could Help Reduce Your Time?

Ask the auditor if there is anything you or your team can do to streamline the audit process for them or make it go more smoothly. Reducing the time it takes to complete the audit can mean a lower fee. It also means you’ll get the information you need more quickly.

6. Does Your Control Assessment of Our Company Enable You to Reduce Substantive Testing?

An auditor will likely review multiple transactions during the audit and will ask you to produce records for various transactions. Ask the auditor what type of control assessment they perform and the effect it has on their process.

7. How Do You Determine Materiality and What Is It?

Materiality is the effect a misstatement or omission has on the use of a company’s financial statements. Ask the auditor how they determine whether an issue is material or immaterial and what it means for your audit results.

8. Do You Anticipate Any Independence Issues?

The person performing an audit for a non-profit needs to be independent, meaning they can’t be an organization employee. An auditor might have independence issues if they’ve performed other work for the organization over the past year or if a relative has a connection to the organization. For example, if the auditor’s child attends a non-profit university or if their spouse works for the organization, there would be independence issues.

9. How Do You Determine If You Are Independent?

Along with asking the auditor if they anticipate any independence issues, ask them what methods they use to determine their independence. For example, you can find out if they believe volunteering for the organization in another capacity affects their independence.

Questions to Ask During the Finalization Stage

While it’s a good idea to keep in touch with your auditor throughout the process, you can also generally expect a meeting at the end of the audit to discuss what happened. During that meeting, consider asking the following.

1. Did You Run Into Any Circumstances That Caused You to Change Your Audit Plan in Any Audit Area?

The unexpected can happen during an audit. Find out if the auditor experienced any difficulties or if they had to change their approach at any point. Ask for more details about what they had to change or why they had to make those changes.

2. Did Management Give You Everything You Requested?

Ideally, the organization’s management team will provide the auditor with the statements and other information they need to complete the audit. If that wasn’t the case, the board of governors should be aware of future audits.

3. Were There Any Areas in the Control Environment That Caused Significant Alarm?

It’s the auditor’s responsibility to review the organization’s control environment and come to their own conclusions about it. Ask the auditor if they discovered any parts of the control environment that were particularly concerning.

4. Were There Any Identified Fraud, Errors or Illegal Acts?

It’s also critical that you ask the auditor if they found any evidence of errors, fraud or illegality during their audits. If they found evidence of fraud, what was it?

5. Were There Any Significant Material Weaknesses or Deficiencies Noted in the Control System?

Control deficiencies or material weaknesses are issues in an organization’s financial reporting that can make it more likely for a misstatement to occur. Find out if the auditor detected any and, if so, what they were and what can be done about them.

6. What Type of Opinion Are You Giving and Why?

You must get the auditor’s overall view of your organization’s financial statements. Even if their opinion lines up with that of the board, it’s important to understand why they have come to that conclusion. What details lead them to make their final decision or develop their final opinion?

7. How Were Any Disagreements Between You and Management Resolved?

It’s not a given that management and the auditor will disagree on certain aspects of the company’s financial statement or that the auditor will differ from management in their assessment. But it is possible. If the auditor disagreed with management in any way, find out how they disagreed and what was done to solve the issue.

8. Were Any Adjustments That You Proposed Not Made?

It’s possible that the management team didn’t acknowledge or implement recommendations an auditor made. It’s a good idea for the board members to learn about those recommendations or adjustments and to decide how to move forward with that information.

9. Are There Any Matters Remaining?

It could also be that management didn’t fully address several issues the auditor brought to their attention. Ask about any remaining matters and what the board can do to address them.

10. Were There Any Accounting Principles That Changed?

If a non-profit organization decides to adopt a change in accounting principle, it needs to apply the change to all previous reporting periods, as well, unless doing so proves to be impractical. The auditor should note any changes made, so it’s important to ask them about those changes. It’s also a good idea to reflect on how changes to accounting principles affect financial statements.

11. Are Our Policies in Line With Best Practices?

Accounting best practices are critical for any company and particularly essential for non-profits, which need to prove to donors and foundations that they are trustworthy and reliable. An auditor can give you insight into whether or not you’re using accounting best practices. If not, they might be able to help you determine what changes to make to adopt those best practices.

12. Were There Any Unusual or Significant Items That We Need to Be Made More Aware Of?

One of the benefits of having an independent party review a non-profit organization’s financial statements is that they are likely to note issues or items board members or the management team are likely to overlook. Ask the auditor about any concerning items and why they think those items might be an issue. You can also find out if they have recommendations for ways to handle any unusual items.

13. How Is Your Perception of Management’s Attitudes Towards Internal Controls?

Working with an auditor gives you a chance to get someone’s unbiased opinion about the non-profit and the management team. Ask the auditor what they think of your management team’s attitudes, particularly about the internal controls your organization uses.

14. What Percentage Is Our Fee in Relation to the Total Fees Earned by Your Firm?

Several factors influence how much a non-profit organization’s audit cost. It can be worth asking the auditor how much your company’s fee contributes to their total fees. Are they charging you so much that your audit fee makes up a significant portion of their total fees? Or is it a small percentage of the total revenue earned by the firm? Finding out how your company’s fee compares to the firm’s total fees will give you an idea of whether or not the auditor depends on your company’s audits or is spending more time than average working for you.

15. What Could We Do to Reduce Your Time and the Audit Fee Next Year?

A non-profit’s size, financial complexity and accounting practices contribute to the time it takes an auditor to perform an independent audit. The length of the audit typically directly connects to the size of the fee. If your company made significant changes during the year, such as adopting new account principles, you could expect a higher fee than in a year with few, if any, changes. It can be worthwhile to ask the auditor what you can do in the future to reduce the complexity of the audit and the length of time it takes, lowering your fee.

16. How Did the Audit Fee Compare to the Estimated Total?

The auditor most likely gave you a quote for the fee before the audit began. Now that it’s over and the auditor has billed the organization for the services, compare the estimated fees to the actual cost. If there’s a significant difference, ask the auditor about the change. If the actual fee is much lower than the estimated amount, it’s still a good idea to learn more about what influenced the change. Why did the auditor spend less time performing the audit they expected?

17. Is There Anything Else You Would Like to Discuss With Us?

Give the auditor a chance to bring up any issues that you might have missed or that they think are worth discussing. It might be the case that they have ideas you haven’t thought about that can improve your non-profit’s financial statements or help you improve the accounting process moving forward.

Work With Marshall Jones on Your Next Audit

Although you might think that asking your auditor a long list of questions during the planning stages and the finalization stage will put them on the spot, a quality auditor will be ready and willing to answer anything you ask. Asking questions also helps you better understand the process and what the findings mean for your non-profit.

Another benefit of asking questions is that doing so allows you to maintain oversight and fiscal responsibility for the process. Marshall Jones’ team of CPAs and advisors perform audits that can give your board of governors the assurance it needs to make financial recommendations for your non-profit. An audit can also help your non-profit attract more donors or meet regulations. Contact us today to learn more about the process and set up an audit in the Atlanta, Georgia, area.

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401K Audit Checklist

Many employers are realizing the need to offer benefits to retain and recruit top talent. One of the most common benefits that we see used is the 401(k). There are many different styles of 401(k) plans, but all 401(k)s are designed for employees to contribute a portion of their income, for those contributions to be placed as investment vehicles, and for the employees to receive deferred tax treatment on the contributions and any investment gains earned over time.

Department of Labor (DOL) and 401K 

The Department of Labor (DOL) is charged with making sure employees are being treated fairly, and in the case of 401(k) plans, there is an act they designed to govern those plans called the Employee Retirement Income Security Act, or ERISA for short. ERISA gives guidance on how plans are supposed to perform and provides protection for individuals in the plans.

Form 5500

The DOL needed a way to track information in these plans, and in conjunction with the Internal Revenue Service, they created a Form 5500, which every 401(k) will need to file. Some 401(k) plans are small enough to file a Form 5500-EZ. These plans have less than 100 eligible participants and do not require an audit, per ERISA. Plans that have over 100 eligible participants are required to file the Form 5500, which includes a section on the Schedule H about the audit performed for the plan. Once the Form 5500 is completed, the audit is also attached to the return and filed.

When Do You Need a 401K Audit?

If a company that provides a 401k has more than 100 eligible employees, it is likely they have been through an audit or another assurance service. The audit for a 401k plan is similar to that of an audit of a company. There will be an agreement for the services provided, a list of items the auditor will request, testing of documents and other evidence, and a report on the financial statements. The best way to have an efficient and effective audit is to understand, gather, and provide those requests back to the auditor.

From the company’s perspective, the requests can be divided into different areas based on where you might pull the information.  There will be a custodian involved, which is where you will pull financial data; there will be a third-party administrator (TPA), which is where you will pull some compliance information; often a payroll provider, which is where you will pull payroll information; and finally, your human resources department will need to provide some plan documents and employee files.

Documents and Information Needed for a 401K Audit

For the financial information (investment company can help):

  • Investment Statement – this shows all the activity from the beginning of year to end of year. It will likely include detail on each investment vehicle, each participant, and a summary.
  • List of contributions – this shows a list of all contributions to the plan in summary and by participant. It will include the pay date, contribution date, date of receipt by custodian, and the amount of contribution. This item is extremely important because it is used to determine if the company made the contributions timely.
  • List of distributions – this shows a list of all distributions from the 401k plan, and it includes the gross amount, any amount of tax withheld, amounts related to forfeiture, net amount paid, and if the funds were transferred to another qualified plan.
  • Certification of Assets – this is a report from the custodian that certifies the amounts reported in the investment statement are complete and accurate. With this report, the audit can be considered “limited-scope” and the auditor can reduce testing on investments. Without the report, the auditor will need to spend significant time testing the investments.
  • You will need to retrieve the SOC1 report or equivalent. This is a control report usually done by another auditor and represents the controls at the investment company.

For compliance (third-party administrator can help)

  • Draft 5500 – The TPA usually prepares this form as part of their responsibilities in the contract. The auditor will need to compare the information in this form with the investment statement and discuss any differences with the TPA with possible disclosure of the differences.
  • Adoption Agreement – The TPA will have one of these on file, because it is their responsibility to review this document and determine if your plan is in compliance.
  • Summary Plan Description – this is a user-friendly document that explains the plan in everyday language and should be what the eligible participants receive upon becoming eligible.
  • IRS Determination Letter – This is the letter that the IRS sent to your company once you were approved to start the 401(k) plan.
  • Compliance Report – The TPA will run various tests associated with the 401(k) options that you have. Some of those tests are called ACP, ADP, and Top-Heavy testing. They will also run tests to see if anyone gave over the limits.
  • You will need to retrieve the SOC1 report or equivalent. This is a control report usually done by another auditor and represents the controls at the third-party administrator.

Payroll information (from your payroll provider or human resources):

  • W-2 – W-2s will help provide evidence for tested participants’ salary and total contribution for the year.
  • Payroll Registers – Often times, it is easier to test 1 or 2 contributions at a point in time, rather than the whole year to determine if the plan is operating correctly. Having the ability to provide any payroll registers requested will help. Payroll registers usually include payroll information related to the time period tested, like amounts paid, withheld, and net pay.
  • If using a payroll service provider, you will need to retrieve the SOC1 report or equivalent. This is a control report usually done by another auditor and represents the controls at the payroll company.

Employee information (from your human resources):

  • Enrollment Form – This form shows the selected participants’ payroll deferral percentage and the options they have chosen in the plan.
  • Employment Form – This will be the form the employee completed that shows their demographic information and their hire date.
  • Termination Form – For employees that were terminated and received distributions, these forms help auditors test the 

Document Your Controls 

If not already done, as you gather these items, document the procedures you have over what happens when someone is employed, becomes eligible, participates in the plan, asks for a withdrawal or terminates from the plan. Some questions to answer in this control document are:

  • How do I know we are withholding the right amount from the employee for the 401k contribution?
  • How do I know we are matching the right amount?
  • How do I update the system with a 401k contribution % or dollar amount?
  • When someone became eligible how do I know they received a 401k packet?
  • How are the investment options we chose performing?
  • How do I make a payment of all the employees’ withholding and the match to the investment company? And how do I check to see if it is right?
  • Are employee personnel files secured for restricted access?

Knowing how to access these items above and provide them to the auditor will lead to a successful audit.

Contact a 401K Auditor

At Marshall Jones, we know that employee benefit plans are important because it is how you take care of your employees. It also represents many fiscal and regulatory responsibilities for you, and we hope to help relieve the stress related to the auditing portion of those responsibilities. Contact Marshall Jones today to start working with our financial professionals.

non profit organization working

Is Non-Profit Accounting Different?

Nonprofit accounting is about demonstrating financial stability, so that the Organization will be around a long time in order to fulfil its mission throughout the community.  

Reserve Policy for Non-Profits

Nonprofits are allowed to receive more revenues than expenses, which will hopefully produce reserves for a rainy day. Be sure your nonprofit has implemented a reserve policy, specifically tailored to the unique working capital, risk and future opportunity needs of your organization.  

ASU 2018-08

All companies are now required to assess all of their major revenue streams that are subject to the new five step analysis of exchange revenues called ASC 606, but nonprofits are also required to adopt a new revenue pronouncement for non-exchange revenues (grants and contributions) called ASU 2018-08.  These two new revenue pronouncements will require expanded footnote disclosures and assessment documentation by company management.

Updated Financial Reporting

A recent accounting pronouncement for nonprofits included updated financial reporting, which revises the equity section to account for revenue transactions as either with or without donor restrictions.  Donor restrictions are either by time or purpose.  This newer standard includes expanded descriptions of expense allocations, makes the reconciliation between the direct and indirect method of cash flows unnecessary, and introduces a brand-new disclosure for liquidity, which is not required for for-profit companies.  

Liquidity Footnote

Review the new liquidity footnote in detail.  Are the Financial Assets Available for General Expenditures negative, or appear low?  When compared to the Statement of Functional Expenses, how many days of expenses does it represent?  Nonprofit management have been worried if a potential donor thinks this number is too high, it may impact future donations.  Other nonprofit management have worried if the potential donor thinks the number is too low, it may question the financial governance of the Organization.  Since this footnote is still relatively new, financial statement readers’ reactions to it are still evolving.  The key is educating the reader through utilization of the qualitative portion of the footnote to explain as much as possible about the Organization’s liquidity management.

Uniform Guidance Compliance 

If the Organization receives over $750,000 of federal funds, are they in compliance with the uniform guidance?  These are audit procedures in addition to the financial audit, which will test federal grant expenditures for proper internal controls around financial reporting and grant compliance.  Any findings in this area will be a part of the public record.

Work With an Experienced Non-Profit CPA

Look for a CPA firm that works with multiple nonprofit organizations, so their entire team will have experience in identifying best practices, so they can be shared with all of their nonprofit clients. Marshall Jones. has a long history of providing tax, audit, and advisory services to a wide variety of nonprofit organizations, including charities foundations, churches, private schools, professional and trade associations, cultural, scientific, and government institutions. Contact us today for more information!

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Accounting Tips for Real Estate

Managing real estate accounting is an essential function to further your company’s success. It allows you to track your cash inflows and outflows, evaluate your financial performance and maximize your tax benefits. Good accounting practices give you tools for effective business analysis, helping you stay ahead and move your real estate business forward.

At Marshall Jones, we understand how crucial accounting is for the real estate industry. To help provide resources for your success, we’ve put together these real estate accounting tips with some valuable ideas on managing your financial records.

1. Remember the Balance Sheet

While your income statement is important, make sure you give attention to your real estate balance sheet as well. Take the time to reconcile every balance and account with the supporting documents and schedules, so you have consistent, quality data on your transactions and accounts. Having an accurate record can save you time and effort later on if you or another party needs to access the information.2. Be Clear on Capitalization

2. Be Clear on Capitalization

Having the right capitalization process in place can help you move forward with your business. Go beyond capitalizing costs over a certain amount — it’s critical to maintain clear communication with construction and project managers and understand project progress as well. When you give careful attention to work-in-progress accounts and tenant improvements, you’ll be able to stay knowledgeable about the details of your real estate holdings. Ensure these buildouts have reached completion before you place them in service so your fixed asset schedule will be clean and accessible.3. Equity Is Important 

3. Equity Is Important 

Take the time to understand the real estate entity structure. After reading through your partnership agreements, special allocations and distribution tiers, make sure you have a thorough knowledge of the conditions and requirements. Keeping track of this data can help you handle operations and transactions more efficiently and make things easier for your owners and tax accountants. With in-depth insight regarding your equity situation, you’ll be able to take ownership of your assets and empower yourself to make strategic decisions in the future. 4. Conquer the Closing Statement 

4. Conquer the Closing Statement 

Ensure a clean start and finish to a property’s books by creating an accurate and comprehensive closing statement. If the task seems overwhelming at first, take it line by line and make sure you’re tracking each amount on your chart of accounts. Be careful to cover all necessary information, including appraisal fees, inspection costs, property tax deposits and loan origination fees.

Get Trusted Accounting Services From Marshall Jones

At Marshall Jones, we are always standing by and ready to help at any time. Accounting can be challenging, and we’re here to help you navigate the process successfully and efficiently. We can provide services for tracking and verifying invoices, recording and organizing receipts, handling accounts receivables, billing and many other financial requirements.

Marshall Jones Certified Public Accountants And Advisors are a group of professionals dedicated to serving our customers with integrity. Whatever you may need to manage accounting at your business, we offer trusted financial services so you can have peace of mind as you pursue your business endeavors.

If you’re interested in learning more about how we can partner with you, contact us today for more information.

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Georgia Gives Back to Adoptive Families

If you are involved in the foster care system, an adoption ministry, a home open to adoption, or are interested in adoption, Governor Kemp recently signed a bill that will bring tax relief and encourage families to adopt children from the foster care program.

Currently, in Georgia, there are around 12,000 children in the foster care system

House Bill 114 was signed by Governor Kemp on March 22, 2021, which revises the amount of the tax credit Georgia gives to parents who have adopted children from the foster care system.  This revision changes the credit from $2,000 to $6,000 per qualifying child, and gives that credit each year for 6 years after the adoption is finalized. After the 6 years, the credit drops back down to $2,000 per year, until the qualifying child is 18.

This credit will apply to your tax liability. Your tax liability is calculated during tax preparation, and then this credit will apply to how much you owe, but it will not reduce it below zero, which means the credit is not refundable.  Any unused portion of the credit will not be able to apply to future or past years, which means it is only applicable in the year claiming the credit.

This credit became effective for adoptions that have finalized after January 1, 2021.

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You Can Still Save on Your 2020 Taxes

When a new year begins, it’s generally not acceptable to make any changes to your 2020 tax situation since your income and deductions are based on the cash receipts and payments that end of the previous year.

But there are still a few things that can be done to lower your 2020 taxes.

Certain payments and related deductions can be made all the way until October 15, 2021, the last date for filing your 2020 tax return under the tax extension. The IRS has extended the deadline to May 17, 2021 however (at this time) if you owe you are still required to pay by April 15, 2021. This affects the deadline to which you can make a traditional IRA payment deductible on your 2020 return.

1.Make a Payment to a Traditional IRA.

Whether or not the deadline is April 15 or October, an IRA contribution gives you a tax deduction while increasing your retirement investments. IRA contributions can reduce your adjusted gross income for the previous year by a dollar-for-dollar amount.

2.Contribute to a SEP IRA or Solo 401(k).

With a Simplified Employee Pension IRA, (SEP IRA), the tax-deductible contribution for 2020 can be made up to $57,000. These retirement accounts can both be set up and contributed to up until September 15 or October 15, 2021, depending on the type of entity you have.

3.Health Savings Account.

Many individuals are enrolled in a high-deductible health plan (HDHP). In order to pay for all of the medical bill costs that are below the deductible amount, a health savings account may be the answer. Funds contributed to such an account are tax deductible. And when funds are removed to pay for medical expenses below the HDHP deductible amount, the funds are not taxable. If the funds are not used up in a given year, they roll over to subsequent years and accumulate. Deductible contributions must be made by the initial filing deadline each year.

4.Eliminate Tax Penalties.

Although the deadline for filing tax returns is May 17, 2021 all taxes owed are to be paid by April 15, 2021 even though the tax return has been extended. For those who received unemployment benefits, there are portions that may still be taxable depending on your adjusted gross income and the amount that you received.

Contact the Tax Professionals at Marshall Jones

You can contact Marshall Jones to set up an appointment to review your tax needs.

Tax Season 2021: What You Need to Know About Your 2020 Tax Return

Tax Season 2021: What You Need to Know About Your 2020 Tax Return

You’re probably sick of even thinking about the year 2020. But, unfortunately, you probably still have the preparation of your 2020 tax return to take care of.

A lot has changed for the 2021 tax season. 

1.The COVID-19 Virus and Your Taxes

The COVID situation in 2020 extended the due date for individual tax return filings. However, in 2021 the deadline has reverted back to April 15, 2021. If you are not able to get your tax return filed by that date, you may request an extension all the way to October 15, 2021, but you must pay any taxes you estimate you will owe with your extension request which must be filed by April 15.

What Effect Does the Coronavirus Have on Your Taxes?

As part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, you will receive a refundable tax credit up to $1,200 in the form of a refundable tax credit to reduce your taxes owing. The $1,200 credit is not taxable.

Paycheck Protection Program (PPP) Loans

The CARES ACT in an effort to assist struggling small businesses created Paycheck Protection Program (PPP) loans. The proceeds from the loans must be used to pay certain business expenses—payroll, rent, or interest on mortgage payments, and utilities. And as long as the business meets these qualifications, the loan can be forgiven. The loan forgiveness is not included in taxable income, and the expenses are deductible.

For those who were laid off from their jobs during the pandemic, many received unemployment benefits. Those benefits are taxable and those who choose not to have taxes withheld from these benefits will have to do so on their tax return.

2.Tax Rates and Brackets for the 2020 Tax Season

Tax rates and brackets – The percentage of your income that is taxed is based on the tax bracket you are in. Here are the brackets and rates for 2021

2020 Marginal Income Tax Rates and Brackets

2020 Marginal Tax Rates Single Tax Bracket Married Filing Jointly Tax Bracket Head of Household Tax Bracket Married Filing Separately Tax Bracket
10% $0–9,875 $0–19,750 $0–14,100 $0–9,875
12% $9,875–40,125 $19,750–80,250 $14,100–53,700 $9,875–40,125
22% $40,125–85,525 $80,250–171,050 $53,700–85,500 $40,125–85,525
24% $85,525–163,300 $171,050–326,600 $85,500–163,300 $85,525–163,300
32% $163,300–207,350 $326,600–414,700 $163,300–207,350 $163,300–207,350
35% $207,350–518,400 $414,700–622,050 $207,350–518,400 $207,350–311,025
37% Over $518,400 Over $622,050 Over $518,400 Over $311,025

3.A Slight Increase in the Standard Deduction for 2020

The standard deduction is an alternative to itemized deductions. Itemized deductions are things like mortgage interest, taxes, medical expenses, and charitable contributions. What you do is to total those deductions and compare them to your standard deduction. The larger of the two is deductible from your Adjusted Gross Income to arrive at your taxable income.

For the tax year 2020, the standard deduction went up slightly to adjust for inflation.

Filing Status 2019 2020
Single $12,200 $12,400
Married Filing Jointly $24,400 $24,800
Married Filing Separately $12,200 $12,400
Head of Household $18,350 $18,650

4.Itemized Deductions

As indicated above, you may “itemize” your deductions if they exceed the standard deduction. Here is a list of itemized deductions:

Interest Expense

The types of interest expenses that are eligible are mortgage interest for both your primary residence, which includes both your first and second mortgages. Mortgage interest for investment properties. Interest on some business loans including business credit card interest. Student loan interest. Personal credit card interest, auto loan interest and other types of personal consumer finance interest are not deductible. 


There are four types of taxes you can deduct :

  1. State, local, and foreign income taxes
  2. Real estate taxes
  3. Ad valorem taxes on personal property 
  4. State and local sales taxes

Note that these taxes in the aggregate are allowable only up to $10,000.

Charitable Deductions

The CARES Act allows you to deduct up to 100% of your adjusted gross income (AGI), which is your total income minus other deductions you have already taken, in qualified charitable donations if you plan to itemize their deductions. Previously charitable deductions were limited in certain circumstances.

Medical Expenses

You can deduct medical expenses, subject to limitations. You can deduct medical expenses in excess of 7.5% of your adjusted gross income (AGI). Your AGI is the total of your income less adjustments for things like an IRA contribution. If your medical expenses do exceed 7.5 % of AGI, they must be included in your itemized deductions which may or may not exceed the standard deduction explained above.

Business Deductions

If you are self-employed are many deductions you can claim on your tax return—including travel expenses and the home office deduction if you use a part of your home to conduct business.


tax credit is a dollar-for-dollar reduction of your tax liability. If, for instance, your tax liability is computed to be $2,500, and you can qualify for a $1,000 tax credit, the credit can be used to reduce the amount you owe. In this case, your net amount owing to the IRS would be 1,500. 

While there are several tax credits in tax law, the most commonly used credits for individuals are:

The Earned income tax credit (EITC)

This credit is for low- and middle-income workers. If you earn less than $56,844 in 2020, you may be eligible for the credit. The amount of the credit is based on your earnings, filing status and number of children. The maximum credit for 2020 is 6,660.

The Child care tax credit

Families with kids can claim up to $2,000 per qualified child for married taxpayers with taxable income less than $400,000, and $200,000 for single parents.

6.Educational Expenses: 529 Plans and ESAs 

Many folks had to pull money from the 529 plan or Educational Savings Account (ESA)  during the pandemic. In order to avoid taxes on these withdrawals, the money must have been used for qualified educational expenses. However, a lot of colleges and schools that went remote or canceled classes this year, may have refunded some or all of the expenses you paid for using 529 or ESA withdrawals. In that instance, you have 60 days to return these funds to those accounts or be subject to them being taxable with an accompanying penalty for early withdrawal.

7.Retirement Plans: 401(k)s, IRAs and More

  • Prior to the CARES Act individuals were not allowed to withdraw funds from their 401 (k)s and IRAs, without penalty, until reaching age 59 ½. The CARES Act eliminated this penalty for such withdrawals up until the end of 2020. Note however that any such withdrawals are taxable.
  • If you have a traditional IRA, tax laws require you to begin making withdrawals once you reach the age of 70 ½. These withdrawals are called “required minimum distributions” (RMDs). The SECURE ACT pushed back the age for RMDs from traditional IRAs from 70 ½ to 72. In addition, the CARES Act allows seniors to skip RMDs altogether in 2020 without penalty.
  • The SECURE Act allows owners of traditional IRAs to keep putting money in their accounts past age 70 ½ starting in 2020. And these contributions are tax-deductible.
  • Finally, if you did take money out of a 401 (K) or traditional IRA in 2020, you will owe additional taxes on those withdrawals. If, however, you are able to put those funds back into those retirement accounts within three years, you can receive a refund of the additional taxes you had to pay.

Contact the Tax Professionals at Marshall Jones

Are you tired of trying to keep up with the ever-changing tax laws? You can contact Marshall Jones to set up an appointment to review your needs.

Accounting for Law Firms

Accounting for Law Firms

Accounting firms help many individuals and companies make financial decisions. No matter what kind of business you run, an accounting firm can offer advice and assistance to help your company set financial goals and develop budgets. 

If your law firm seeks dependable financial advice or wants someone to handle your weekly payroll, an accounting firm may be the right choice for your organization. To help you make your choice, we have developed a list of tips for choosing the best accounting firm for your law firm.

Tips for Choosing the Right Accountant for Your Law Firm

Are you wondering how to choose an accounting firm? Your law firm can greatly benefit from hiring an accounting firm, but first, you need to know where to start your selection process. Follow the tips below for guidance in choosing the right legal accounting for your law firm.

1. Review the Company’s Industry Experience

How long has the company been working in the industry? Accountants generally specialize in certain industries to offer clients improved, personalized service. For example, a retail accountant may not be the best choice for a client in the agricultural industry. Ensure that the accounting firm you choose has experience working with law firms. 

At Marshall Jones, we have more than 30 years of experience providing professional accounting services to various clients, including law firms, consulting agencies, marketing firms, ad agencies, construction companies and non-profits. We also offer tax planning and preparation for law firms.

2. Consider How Much Control the Firm Has

What level of service does the accounting firm offer? How much control over your bookkeeping do you want to keep or relinquish? If you want comprehensive bookkeeping services, ensure that you find a full-service accounting firm. These firms employ bookkeepers who handle the everyday client transactions. Accounting firms that do not employ bookkeepers may charge more if you need a CPA to handle your routine bookkeeping tasks.

3. Determine Whether the Firm Provides Audit Support

When dealing with the Internal Revenue Service (IRS), it can be reassuring to know your trusted accountant is at your side. An IRS audit can happen to any business or individual, but facing one can be an incredibly stressful situation. An audit is a review of your firm’s financial data, and our audit and assurance services at Marshall Jones will ensure your financial data is accurate.

With some accounting firms, you may be able to use their offices for audit purposes. An accountant will also be present to represent your interests. At Marshall Jones, we can offer your firm feedback for improvement, drive growth, reduce expenses and identify potential new ways to increase your firm’s profitability. 

4. Determine How the Firm’s Payments Work 

Fees vary from one accounting firm to another. Some accountants charge by the minute, and each phone call between you and your accountant can raise your bill. Other accountants charge a predetermined rate for every financial task performed, like preparing profit and loss statements, filing income tax forms or compiling net worth statements. 

5. Ask Fellow Law Firms If They Have Worked With the Company

Finally, ask for references from other law firms. When it comes to receiving references for accounting firms to partner with, nothing beats word-of-mouth. Word-of-mouth is just as valuable today as it has ever been. Speak with business associates and friends to learn which accounting firms they use and whether they would recommend those firms to other law firms. 

Why Is Accounting So Important for Law Firms?

Law firm accounting professionals can help your law firm operate more efficiently. An accounting firm can help your attorneys and managing partners get a better grasp on your business, affecting your cash flow, client profitability, staff efficiency, attorney compensation and compliance with your state’s bar association about how you manage your funds. 

The role of a professional legal accountant includes the collection, interpretation and use of financial data to help your law firm grow and stay compliant. An accounting firm can handle:

  • Completing payroll
  • Recording expenses
  • Completing tax returns
  • Managing financial data
  • Accounting for case costs 
  • Distinguishing between income and revenue

An accounting firm can help you systemize workflows in your law firm, such as tracking billable hours versus non-billed hours. You may also want to consider fixed fees versus hourly fees, as this can create flexibility for your clients and help your attorneys determine the best way to bill clients for affordability and profitability. 

Additionally, an accounting firm can help you select the right accounting method for your law firm. 

  • Cash accounting: You may want to choose cash accounting if you want simplicity. With cash accounting, you can easily determine when transactions have occurred, and there is no need to track payables or receivables. 
  • Accrual accounting: The other accounting method you can choose is accrual accounting. You may want to choose accrual accounting if you want a more realistic idea of your expenses and income during a certain period. This form of accounting records expenses and revenues when they are incurred and earned.

Outsource Your Accounting to Marshall Jones

Outsourcing to an accounting firm like Marshall Jones will give your law firm the amount of control over your finances that you desire and take away the hassle of having to do it all yourself so you can spend time working billable hours instead of doing non-billable administrative tasks. For more than three decades, our certified public accountants and advisors at Marshall Jones have been serving the individuals and businesses in Atlanta. We provide exceptional client service with complete integrity and the highest levels of technical competencies. At Marshall Jones, we will:

  • Provide your firm with a customized experience: We will strive to learn as much as we can about your company and its business goals, which allows us to offer the services you need, like tax-minimizing suggestions and strategic planning. Our flexible strategy ensures that we can deliver the level of service you need, whether that is seasonal help or full-time bookkeeping. 
  • Save your law firm time and money: Our team will handle the time-consuming aspects of bookkeeping, allowing you to focus your time and efforts on running your business. When you work with us, you will not need to recruit, hire, train or onboard an in-house bookkeeping professional.  
  • Allow you to retain control of your firm’s bookkeeping: With Marshall Jones, you can retain the level of control you want when it comes to your firm’s bookkeeping. Whether you want to receive regular reports or leave the details to us, we can accommodate your wishes for control over your bookkeeping. 

Contact us today to outsource your accounting to Marshall Jones or to learn more about the outsourced accounting services we offer.