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Misclassifying employees as independent contractors is a common mistake made by many nonprofits. Still, improperly misclassifying an employee as an independent contractor can be costly. Nonprofits can suffer payroll tax liabilities and penalties or lawsuits from federal and state authorities for reimbursement of workers’ compensation claims.
Normally, corporations can only deduct charitable contributions up to an amount that equals 10 percent or less of their taxable income in the given tax year. Under the CARES Act, this limitation was bumped to 25 percent of taxable income.
More recently, the December 2020 Taxpayer Certainty and Disaster Tax Relief Act (TCDTRA) temporarily upped the limit for corporate charitable contribution deductions to 100% for qualified disaster relief contributions.
The IRS has released additional guidance for corporations considering using the deduction. Here’s what you need to know.
AdHoc said it best: For everyone that is feeling outraged by the multiple lives that have been lost at the hands of the police, we’d encourage you to channel that anger into action. For some, that action looks like self-education and awareness, or protesting, or speaking out amongst their friends and community. Another consideration may be giving to one of several organizations working diligently in the fight against systemic racism and violence.
Nonprofits have a compelling negotiating tool that pairs employee debt relief with long-term employee commitment (at least to the sector) and doesn’t cost the nonprofit anything.
From now on no part of the use of an employer provided cell phone will be treated as taxable income to the employee so long as it is provided primarily for business reasons. Instead, the business use of the cell phone will be considered a working condition fringe benefit or, a benefit where, if the employee were to pay for such property or services, such payment would be allowable as a deduction. In addition, personal use of the employer-provided phone will be considered a de minimus fringe benefit or a benefit in which the value of the property or service is so small as to make accounting for it unreasonable or administratively impracticable. The new rule applies to any use of an employer-provided cell phone occurring after December 31, 2009.