These are sometimes assessed in large urban areas (think New York City, San Francisco, etc.). There are 14 states that allow local governments to collect an income tax. These can cover programs like short- and long-term disability, workers’ compensation, paid medical or family leave and more. For FICA tax (as well as federal income tax), you must complete and file Form 941, Employer’s Quarterly Federal Tax Return. This form is due by the last day of the month following the end of each quarter, although some employers might be considered annual filers.
This process helps stakeholders understand how resources are used, improves nonprofit budget tracking, and aids in meeting the reporting requirements of GAAP, giving nonprofits a clear picture of their operational costs.
Proper bookkeeping is crucial to maintaining your tax-exempt status, securing funding, and demonstrating transparency to donors and stakeholders.
Please speak to your accountant or adviser for more information about capital gains and their effect on tax-exempt organizations.
It’s also expensive to bring them onboard, train them and pay their salary and overhead.
Accrual accounting even complies with GAAP, which is required for nonprofits seeking grants and government funding.
The revenues from payroll taxes are used to fund public programs; as such, the funds collected go directly to those programs instead of the Internal Revenue Service (IRS). Think about your budget like a roadmap to where you’ll spend your money. You have to know the area to plan a route, and the same can be said about your nonprofit’s budget. Accurate and timely bookkeeping practices will make the job of those tasked with budgeting much easier to tackle. It’s also important to recognize that bookkeeping is https://nerdbot.com/2025/06/10/the-key-benefits-of-accounting-services-for-nonprofit-organizations/ not a part-time job.
We’ll show you how to clearly explain your charitable purpose in language that the IRS requires to grant an approval.
Working with certified public accountants (CPAs) is another way for nonprofits to ensure their financial statements are accurate and compliant with regulations.
Yes, with over 19 years working exclusively with nonprofits, we pride ourselves in having a unique understanding of your accounting and reporting needs.
A provider who serves the nonprofit sector can offer useful tips to optimize your financial operations.
Without access to accurate financial reports and expert financial guidance, your organization will never be prepared for what’s coming next.
Referrals of Nonprofit Professionals:
Non-profits are not a side business for Magone & Company, P.C., they are our primary business. We offer a personal approach that includes learning about the day-to-day operations of your organization so we can customize our accounting and bookkeeping services to fit your needs. Our aim is offer practical solutions for reducing expenses and helping your dollars stretch farther, while ensuring your books are accurate and up to date. Nonprofit accounting is complex and has many specialized requirements, but Fohrman & Fohrman, Inc., can be your foundation for making informed financial management decisions. We maintain your financial information in accordance with Generally Accepted Accounting Principles (GAAP), as well as the needs of auditors, grantors, and the board of directors. These varied requirements present challenges that only experience can overcome, and our experience has earned us a reputation of excellence and dependability in the nonprofit accounting industry.
SOFTWARE EXPERTISE
Whether you need a full accounting and finance department or a helping hand to support your current staff, the right expertise is easily accessible at a fraction of the staffing cost. With our “just down the hall” approach, our clients can vouch for our friendly and responsive service. All of our bookkeepers are US-based, Quickbooks ProAdvisor certified, and experts in nonprofit accounting. When you let us handle your nonprofit’s bookkeeping needs, you will be paired with one of our staff bookkeepers whose expertise is best matched to your needs. But when you’re trying to paste together your numbers with a part-time bookkeeper or a volunteer accountant, it’s nearly impossible to get the transparency you need to run your nonprofit organization. They also handle online bookkeeping for nonprofits and to handle all financial expenses error-free.
Non-Profit Accounting
Fund accounting is essential for nonprofit organizations because it helps ensure transparency with donors and stakeholders. By tracking donations and grants for specific purposes, nonprofits can provide accurate reports on how these funds are being used, which fosters trust and supports their organization’s mission. Working with certified public accountants (CPAs) is another way for nonprofits to ensure their financial statements are accurate and compliant with regulations. CPAs bring a wealth of experience and can help organizations navigate challenges such as joint costs allocation, cash management, and strategic planning.
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Tracking these funds separately ensures proper compliance with donor intentions, improving transparency and accountability for nonprofit organizations. You need to choose a bookkeeping service provider that specializes in nonprofits and has extensive experience with nonprofit-specific financial requirements, such as preparing Form 990. A provider who serves the nonprofit sector can offer useful tips to optimize your financial operations.
This is because your company’s industry, years in business and unemployment history can all determine the percentage used to calculate the amount due. If you’re self-employed, however, you’ll need to pay the full 15.3% of FICA taxes due on your salary. FUTA taxes are paid entirely by the employer; there is no employee payment. These taxes are listed on an employee’s pay stub, with the first two shown as FICA (Federal Insurance Contributions Act). However, it can be maneuvered easier if you know what to look for, have realistic expectations, and ask the right questions. Churches, mosques, temples, and other faith-based organizations are important components of every neighborhood.
Get our FREE guide to nonprofit financial reports, featuring illustrations, annotations, and insights to help you better understand your organization’s finances. We’ll implement new technology and processes to modernize your bookkeeping and improve transparency. That helps us ensure your transactions are entered accurately and on time to give you confidence in your decisions. Without access to accurate financial reports and expert financial guidance, your organization will never be prepared for what’s coming next.