What Nonprofits Need to Know About Accounting
March 22, 2018
"What Nonprofits Need to Know About Accounting"
Farella tax partner Julie Treppa comments on changes in the new tax law that nonprofits should be aware of.
"Under the 2017 Tax Cuts and Jobs Act, a nonprofit can no longer aggregate the profits and losses from various trades and businesses in computing their unrelated business taxable income (UBTI)," warned Ms. Treppa. "Be sure to segregate income and expenses from each trade or business in which it engages ... UBTI is now computed separately with respect to each trade or business."
Other changes include the valuation of certain employee benefits, which can count as taxable income if not reported properly. "A nonprofit's UBTI includes any qualified transportation fringe benefits and on-premises athletic facilities provided to employees," Ms. Treppa added. "The organization can avoid the addition of these items as UBTI if it includes the cost of the benefits on its employees' form W-2."