990, Is this an IRS Form or What? - Yes, the 990 is indeed an IRS Form

On Tuesday, February 26, 2008, Jen Vacha and Janet Ramey of Brown Smith Wallace presented valuable information about the new 990 form the IRS has developed for 2008. It is 59 pages in its entirety and full of accounting exercises all of us will have great fun doing.

Some areas that may need your attention are Schedule J (from question 23 on Part IV of the 990); Part VII of the 990 (which was formerly Schedule A); and Schedule D, (which is a new schedule and includes the reconciling item lines that were formerly on the basic 990 form).

Schedule J's data must tie back to W-2's and 1099's. Therefore, Schedule J is based on a calendar year, even though all the other information pertaining to the 990 is based on your nonprofit's fiscal year.

Part VII of the 990 also factors into Schedule J, and must tie to W-2's and 1099's.

Schedule D, "Supplemental Financial Statements" is triggered if you answered "Yes" to lines 6, 7, 8, 9, 10, 11 or 12 on Part IV of the 990.

990, Is This an IRS Form or What? - Topic for February 26, 2008

Please join us for our next meeting, February 26 when Jen Vacha and Janet Ramey from Brown, Smith and Wallace walk us through the not-for-profit version of the 1040 - the IRS 990 form. We will learn how to distinguish in-kind goods from in-kind services as well as how to complete the form with the least amount of pain. A definite challenge when tackling IRS forms. See you there.

Allocations Part II - What to do???

Darrell Songer and Allan Larson of Larson Allen, presented Part II of Allocations and Functional Reporting. They focused on how to do cost allocations which generated much discussion with the 23 attendees, who asked questions like how to treat specific administrative costs such as grant writers, accountants and audit costs, Songer and Larson provided these handouts: sample Cost Allocation Plan and the section of the AICPA Not for Profit Audit Guide on cost allocations. But the basic rule of thumb seems to be that if the adminstrative cost would still exist even after a program has been eliminated, then that administrative cost should not be allocated to the program.

Allocations Part II - Topic for January 22, 2008

Please join us at our next meeting for the second part of our allocations discussion with Allan Larson of Larson Allen. We will discuss examples of cost allocation formats as well as expenses that should always be directed toward administration rather than allocated among functions.

A New Year - A New I-64 (Highway 40)

Because we meet each month at the downtown offices of United Way, many of us rely on I-64 to take us to the meetings. Beginning today, that route may no longer be an option for many of us. To help you navigate your way to our meetings during the I-64 re-construction, we've added some rss feeds that provide links to traffic and public transportation updates.

Happy trails!!

No meeting for December, 2007

Because the 4th Tuesday of December will fall on Christmas day, the nfpFMA programming committee has made the wise decision to cancel the December meeting!
Have a great holiday season and we'll see you at the next meeting, January 22, 2008.

Allocations Part I - Identify Direct Costs First

Allan Larson of Larson Allen facilitated an informative discussion about allocations Tuesday. One suggestion he gave was for those of us grappling with allocations to work in sequential steps, and begin by identifying direct from indirect costs. Code direct costs to the appropriate function instead of coding all administrative costs (direct or indirect) to allocation accounts. Allan pointed out that we'll save ourselves much aggravation if we take time during the invoice coding process to identify admin costs that can be directly coded to a function.