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Meet the Team Behind DB&C Advisors: More Than Just Financial Professionals

At DB&C Advisors, exceptional service is not just about delivering tailored wealth management solutions; it’s about the heart of our practice—the people behind it. Our advisors don’t just bring financial expertise to the table; they bring their personalities, passions, and life experiences, making every client relationship personal and meaningful. In this blog, we’re excited …

At DB&C Advisors, exceptional service is not just about delivering tailored wealth management solutions; it’s about the heart of our practice—the people behind it. Our advisors don’t just bring financial expertise to the table; they bring their personalities, passions, and life experiences, making every client relationship personal and meaningful. In this blog, we’re excited to highlight three key team members who embody the spirit of DB&C: Deanna Sears, Shannon Simon, and Dan O’Mealey.

Deanna Sears – Client Services Associate

Family as a Driving Force

Deanna’s close-knit family has always inspired her, instilling in her the importance of love and connection, no matter the distance. This personal value translates directly into her work at DB&C Advisors, where helping clients plan for their families’ futures is a cornerstone of her role. Deanna sees financial planning as a way of protecting and nurturing relationships, much like she does with her own family.

Finding Balance Through Nature and Connection

Outside of the office, Deanna recharges through a variety of activities that connect her to both nature and community. She enjoys walking her dogs in the woods, gardening, and relaxing on the beach. When the weather isn’t cooperating, you’ll find her reading, sewing, or catching up with friends and family. Deanna’s philosophy is centered around balance—whether through quiet reflection, exercise, or shared laughter—helping her bring a positive, grounded energy into her work each day.

A Philosophy Rooted in Positivity

For Deanna, a smile goes a long way. Even when clients can’t see her, she believes they can sense the positivity in her voice. Her service philosophy is simple: stay upbeat and always approach life with kindness. This attitude resonates in her interactions with clients and colleagues alike, creating an environment where people feel supported, valued, and genuinely cared for.

The DB&C Family Atmosphere

One of Deanna’s favorite aspects of working at DB&C Advisors is the sense of family she feels with her team. Every day, she connects with clients and colleagues, forming relationships that go beyond transactions. For Deanna, it’s these connections that make her work so fulfilling.

Shannon Simon, BFA ®, CWS ® – Wealth Advisor

Client-Centered Relationships and a Family-First Philosophy

Shannon’s family plays a significant role in both his personal and professional life. His daughter is a teacher in Louisiana, and his son works for an airline in Michigan. Shannon’s focus on family mirrors his approach to working with clients, ensuring that every financial plan is deeply personal and rooted in each client’s life goals. He emphasizes, “It’s important to meet people where they are in their life’s journey—retirement, mid-career, or just starting out—and understand their goals and the steps they’ve taken toward achieving them.”

Enjoying Michigan Summers and Southern Cooking

Outside the office, Shannon enjoys spending quality time with his family, golfing (although not as much as he’d like), and fishing. As a native of Louisiana, he also loves cooking, particularly the foods he grew up eating, like gumbo, jambalaya, and barbeque. His time outdoors and in the kitchen helps him stay balanced and energized, allowing him to bring that same level of energy to his work.

Fostering Client Relationships as Family

For Shannon, DB&C Advisors feels like more than just a workplace—it’s a family. He notes that, “No matter what team or division you’re with, it feels like you are part of the family. Our goal is to extend that feeling to our clients, so we become an important part of their family as well.” He believes in creating strong, trust-based relationships with clients, helping them navigate challenges, and offering guidance through life’s significant events.

Dan O’Mealey, CFP ® – Chief Compliance Officer & Director of Financial Services

A Commitment to Setting a Good Example

Dan’s dedication to his family is mirrored in his professional life. As a father, he strives to set a strong example for his children, both in his career and in the way he approaches life. This commitment is reflected in how he engages with his clients, ensuring their needs are always the top priority.

Staying Energized Through Fitness and Fun

Dan’s life outside of the office is filled with a variety of activities that keep him balanced and energized. Whether it’s CrossFit, yoga, or spending time outdoors with family, Dan believes that staying active helps him maintain the focus and stamina necessary to serve his clients well. Summertime cookouts and travel are also significant parts of Dan’s life, providing the perfect way to unwind and recharge.

A Philosophy of Client-First Service

Dan’s personal service philosophy is straightforward: always put the client first. He believes that by focusing on the needs of his clients, everything else will naturally fall into place. This client-first mindset is at the core of how he approaches financial planning and is a key reason why he enjoys helping clients navigate both expected and unexpected challenges.

From Southeast Alaska to Wealth Management

One surprising fact about Dan is his unique background—he grew up in a fishing village on an island in Southeast Alaska. Before entering the world of financial planning, he spent ten years as a tool and die maker. This hands-on experience gives him a practical approach to problem-solving, which he applies to his financial planning strategies today.

Building Strong Client Relationships

For Dan, the best part of his job is getting to know the clients he serves. Whether it’s solving a small challenge or helping them navigate life’s big surprises, he values the trust his clients place in him and feels fortunate to be part of their journey.

DB&C Advisors is more than just a team of financial planners; we are a family of professionals who genuinely care about the people we work with. Deanna, Shannon, and Dan – along with the rest of the team, bring their full selves into their roles—combining technical expertise with authentic, human connections. When you work with DB&C Advisors, you’re not just getting a service; you’re gaining a partnership rooted in trust, integrity, and shared values.

Protecting Our Seniors: Understanding and Preventing Scams

As our population ages, seniors increasingly become targets for a variety of scams. These fraudulent schemes can have devastating financial and emotional impacts on older adults, who may be more vulnerable due to factors such as isolation, cognitive decline, or simply a trusting nature. The Internal Revenue Service (IRS) has been proactive in issuing …

As our population ages, seniors increasingly become targets for a variety of scams. These fraudulent schemes can have devastating financial and emotional impacts on older adults, who may be more vulnerable due to factors such as isolation, cognitive decline, or simply a trusting nature. The Internal Revenue Service (IRS) has been proactive in issuing warnings and providing guidance to help protect seniors from these threats. This article will delve into the nature of scams targeting seniors, what to be on guard for, awareness and protection strategies, IRS advice, and steps to take if one falls victim to a scam.

Understanding the Threats – Scammers employ a range of tactics to deceive seniors, often posing as representatives from government agencies, familiar businesses, or charities. The IRS, in its news release IR-2024-164, highlights the rising threat of impersonation scams targeting older adults. These fraudsters use fear and deceit to exploit their victims, often pressuring them into making immediate payments through unconventional methods such as gift cards or wire transfers.

Common Scams Targeting Seniors

  • Impersonation of Known Entities: Fraudsters often pose as representatives from government agencies like the IRS, Social Security Administration, or Medicare. By spoofing caller IDs, they can deceive victims into believing they are receiving legitimate communications. These scammers may claim that the victim owes money, is due a refund, or needs to verify personal information.
  • Claims of Problems or Prizes: Scammers frequently fabricate urgent scenarios, such as outstanding debts or promises of significant prize winnings. Victims may be falsely informed that they owe the IRS money, are owed a tax refund, need to verify accounts, or must pay fees to claim non-existent lottery winnings.
  • Pressure for Immediate Action: These deceitful actors create a sense of urgency, demanding that victims take immediate action without allowing time for reflection. Common tactics include threats of arrest, deportation, license suspension, or computer viruses to coerce quick compliance.
  • Specified Payment Methods: To complicate traceability, scammers insist on unconventional payment methods, including cryptocurrency, wire transfers, payment apps, or gift cards. They often require victims to provide sensitive information like gift card numbers.

Awareness and Protection Strategies

Awareness is the first line of defense against scams. Seniors and their caregivers should be educated about the common tactics used by scammers and the red flags to watch for. Tips for Seniors:

  • Verify the Source: Always verify the identity of the person or organization contacting you. If you receive a call, email, or text message claiming to be from the IRS or another government agency, do not provide any personal information. Instead, contact the agency directly using a verified phone number or website.
  • Be Skeptical of Unsolicited Communications: Be cautious of unsolicited communications, especially those that request personal information or immediate payment. Legitimate organizations will not ask for sensitive information through unsecured channels.
  • Do Not Rush: Scammers often create a sense of urgency to pressure victims into making hasty decisions. Take your time to verify the legitimacy of the request and consult with a trusted family member or friend before taking any action.
  • Use Secure Payment Methods: Avoid making payments through unconventional methods like gift cards, wire transfers, or cryptocurrency. Legitimate organizations will not request payment using these procedures.
  • Monitor Financial Accounts: Regularly monitor your bank and credit card statements for any unauthorized transactions. Report any suspicious activity to your financial institution immediately.

Tips for Caregivers

  • Educate and Communicate: Regularly discuss potential scams with the seniors in your care. Ensure they understand the common tactics used by scammers and encourage them to reach out to you if they receive any suspicious communications.
  • Set Up Protections: Help seniors set up protections such as fraud alerts on their credit reports and two-factor authentication on their online accounts.
  • Monitor Communications: If possible, monitor the mail, phone calls, and emails that the senior receives. This can help identify potential scams before any damage is done.
  • Encourage Reporting: Encourage seniors to report any suspicious activity to the appropriate authorities. Reporting scams can help prevent others from falling victim to the same schemes.

IRS Advice and Resources – The IRS has been actively engaged in efforts to protect taxpayers, including seniors, from scams and identity theft. The Security Summit partnership between the IRS, state tax agencies, and the nation’s tax professional community has been working since 2015 to combat these threats. Remember that:

  • The IRS will never demand immediate payment via prepaid debit cards, gift cards or wire transfers. Typically, if taxes are owed, the IRS will send a bill by mail first.
  • The IRS will never threaten to involve local police or other law enforcement agencies.
  • The IRS will never demand payment without allowing opportunities to dispute or appeal.
  • The IRS will never request credit, debit or gift card numbers over the phone.

Key IRS Recommendations

  • Know the IRS Communication Methods: The IRS will never initiate contact with taxpayers by email, text message, or social media to request personal or financial information. Initial contact is typically made through a mailed letter.
  • Questions or Concerns About Your Taxes: Contact your tax professional.
  • Report Scams: If you receive a suspicious communication claiming to be from the IRS, report it to the IRS at phishing@irs.gov. You can also report scams to the Federal Trade Commission (FTC) at www.ftc.gov/complaint.
  • Protect Personal Information: Be cautious about sharing personal information. The IRS advises taxpayers to use strong passwords, secure their devices, and be wary of phishing attempts.
  • Seek Professional Help: If you believe your identity has been compromised, contact this office immediately. The IRS has special provisions for victims of identity theft to protect their tax filings.

What to Do if Scammed – Despite all precautions, scams can still happen. If you or a loved one falls victim to a scam, it’s important to act quickly to minimize the damage. Immediate steps to take:

  • Stop Communication: Cease all communication with the scammer immediately. Do not provide any further personal information or make any additional payments.
  • Report the Scam: Report the scam to the appropriate authorities. This includes the IRS, the FTC, and your local law enforcement. Reporting the scam can help authorities track down the perpetrators and prevent others from being victimized.
  • Contact Financial Institutions: Notify your bank, credit card companies, and any other financial institutions involved. They can help you monitor your accounts for fraudulent activity and take steps to protect your assets.
  • Place Fraud Alerts: Place a fraud alert on your credit reports with the major credit bureaus (Equifax, Experian, and TransUnion). This can help prevent further identity theft.
  • Review Credit Reports: Obtain and review your credit reports for any unauthorized accounts or activities. You are entitled to a free credit report from each of the major credit bureaus once a year through www.annualcreditreport.com. You may even want to put a freeze on your credit, which will help prevent fraudsters from opening credit accounts in your name or accessing your credit reports. To do so you’ll need to contact the three major consumer credit bureaus. The drawback to doing so is the inconvenience of contacting the credit bureaus again if you need to lift the freeze on your credit card(s).
  • Secure Personal Information: Change passwords and security questions on your online accounts. Consider using a password manager to create and store strong, unique passwords.

Long-Term Steps

  • Monitor Accounts: Continue to monitor your financial accounts and credit reports regularly for any signs of fraudulent activity.
  • Educate Yourself: Stay informed about the latest scams and fraud prevention strategies. The IRS and other organizations regularly update their websites with new information and resources.
  • Seek Support: Falling victim to a scam can be emotionally distressing. Seek support from family, friends, or professional counselors if needed.
  • Legal Assistance: In some cases, it may be necessary to seek legal assistance to resolve issues related to identity theft or financial fraud.

Scams targeting seniors are a growing concern, but with awareness and proactive measures, older adults can be protected from these threats. By staying informed, verifying communications, and taking swift action, when necessary, seniors and their caregivers can safeguard against fraud and ensure financial security.

Remember, if you or a loved one is ever in doubt about a communication or request, it’s always better to be safe than sorry. Reach out to trusted family members, friends, or professionals for advice and support. Together, we can create a safer environment for our seniors and help them enjoy their golden years without the fear of falling victim to scams.

Self-Employment Tax: Who Really Needs to Pay and Why You Can’t Afford to Ignore It

In the realm of taxes, understanding who is required to pay self-employment tax and who is exempt is crucial for individuals navigating their financial responsibilities. Whereas employees have Social Security and Medicare taxes withheld from wages–often referred to as FICA taxes– individuals who work for themselves are subject to self-employment (SE) tax, which they …

In the realm of taxes, understanding who is required to pay self-employment tax and who is exempt is crucial for individuals navigating their financial responsibilities. Whereas employees have Social Security and Medicare taxes withheld from wages–often referred to as FICA taxes– individuals who work for themselves are subject to self-employment (SE) tax, which they pay in lieu of the Social Security and Medicare taxes employees pay via payroll withholding. Employees and employers share the employee’s liability, while self-employed individuals pay both the employer and employee liability.

 

Understanding Self-Employment Tax – Before diving into the specifics of who must pay self-employment tax, it’s essential to understand what it entails. Self-employment tax is governed by the Self-Employment Contributions Act (SECA), under which individuals who earn income directly from their business activities, rather than as employees, are required to contribute to Social Security and Medicare. This tax is calculated as a percentage of net earnings from self-employment.

 

For 2024, the self-employment tax rate is 15.3%, comprised of 12.4% for Social Security contributions on the first $168,600 of net earnings and 2.9% for Medicare contributions on all net earnings. Unlike employees, who share these tax responsibilities with their employers, self-employed individuals bear the full burden. An additional Medicare tax of 0.9% of net self-employment income applies for those with SE income above the following thresholds: $250,000 married joint, $125,000 married separate and $200,000 all others 

 

Who is Required to Pay Self-Employment Tax? – Generally the following are subject to self-employment tax:

  • Sole Proprietors and Independent Contractors – Individuals operating their businesses or offering services as sole proprietors or independent contractors are required to pay self-employment tax on their net earnings if they exceed $400 in a tax year.
  • Partners in a Partnership – Members of a partnership that conducts a trade or business are subject to self-employment tax on their share of the partnership’s income.
  • Members of a Limited Liability Company (LLC) – Depending on the election made by the LLC, members may be treated as sole proprietors or partners for tax purposes and thus be required to pay self-employment tax on their share of the LLC’s profits.
  • Clerics – A cleric is required to pay self-employment tax on income from services as a minister unless the individual has taken a vow of poverty. The following are examples of common situations related to the self-employment income of clerics:
    • W-2 Income – from the Church is subject to income tax, and self-employment tax. It’s important to note that the church does not withhold FICA taxes for this income.
    • Self-employment Income – Clerics who do not work for a specific church or who receive income for presiding over weddings, funerals, etc., have non-employee income that is taxable and subject to self-employment tax, based on the net profit from the self-employment activity.
    • Schedule C – This is the IRS form on which clerics report their SE income, which can be offset by associated expenses, resulting in the net profit that’s subject to SE taxes.
    • Most clerics receive a Housing (Parsonage) Allowance from the church they work for. To the extent allowed by law, this income is not subject to income tax but is subject to self-employment tax.

 

Who is Exempt from Paying Self-Employment Tax? – While the scope of self-employment tax is broad, there are specific exemptions and special cases:

  • Employees: Individuals who work as employees and receive a W-2 form are not subject to self-employment tax on their wages, as their employers withhold Social Security and Medicare taxes throughout the year that the employer pays over to the government.
  • Rental Income: Generally, income derived from renting out property is not subject to self-employment tax unless the individual is engaged in a rental business that provides services for the convenience of tenants.  This generally includes rents paid in crop shares.
  • Limited Partners: Limited partners in a partnership may be exempt from self-employment tax on certain income distributions, as their involvement in the business is typically passive, i.e., more in the nature of an investment.
  • Certain Business Owners: Owners of corporations, including S corporations, may not be subject to self-employment tax on their share of the corporation’s profits, though they must pay themselves reasonable compensation subject to the FICA employment taxes.
  • Commissions Allowed by the Probate Court – Commissions (fees) allowed to nonprofessional fiduciaries (such as an estate executor or trustee) by a probate court under local law generally aren’t considered self-employment earnings. However, if the fees relate to active participation in the operation of the estate’s business, or the management of an estate that required extensive management activities over a long period of time, the fees would be SE income to the extent they represents a special payment for operating the business. 
  • Termination Payments of Former Insurance Salespeople – The law provides that net earnings from self-employment don’t include any amounts received from an insurance company for services performed by an individual as an insurance salesperson for the company if certain conditions are met.
  • Religious Exemptions – Ministers, Christian Science practitioners, and members of religious orders who have taken a vow of poverty may get an exemption from self-employment tax on their earnings if certain requirements are met.  To get the exemption, Form 4361 must be filed with the IRS.

Retired clergy receiving parsonage or rental allowances are not subject to self-employment tax. 

  • Notary Public – The fees for the services of a notary public are exempt from the self-employment tax.
  • Nonresident Aliens – Nonresident aliens engaged in a trade or business within the United States may be subject to self-employment tax, with specific exemptions based on tax treaties.
  • Miscellaneous Income from an Occasional Act or Transaction – Income from an occasional act or transaction, absent proof of efforts to continue those acts or transactions on a regular basis, isn’t income from self-employment subject to the SE tax.  An example is a nonprofessional fiduciary who manages the estate of a relative or friend.  However, professional fiduciaries are subject to self-employment tax

 

Special Situations

  • Self-employment Tax Deduction – Self-employed individuals can deduct half of their self-employment tax when calculating their adjusted gross income, providing some relief. The purpose of this deduction is to make up for the self-employed person having to pay both sides of the Social Security and Medicare taxes. However, this is not a deduction on the individual’s business form, such as Schedule C. It is deductible whether the individual itemizes their deductions or claims the standard deduction.
  • Optional Methods – There are two methods – one for farmers and another for nonfarmers – that can be used when net self-employment earnings are less than $400 and paying SE tax isn’t required.  Use of these methods allows a taxpayer to continue accruing credit toward their Social Security coverage in years when profits are small (or even when there is a loss). Using the optional method may also allow the individual to qualify for the earned income credit and certain other credits, or to receive a larger credit. These individuals are subject to special rules for self-employment tax, with different thresholds and rates applying to their net earnings.

 

Understanding the intricacies of self-employment tax is vital for anyone earning income outside of traditional employment. While the responsibility to pay rests on many self-employed individuals, exemptions and special cases exist. 

 

Contact our office with questions regarding self-employment tax and how it may apply in your specific circumstances.

September Individual and Business Due Dates

September 2024 Individual Due Dates September 1 – 2024 Fall and 2025 Tax Planning Tax Planning Contact this office to schedule a consultation appointment.September 10 – Report Tips to EmployerIf you are an employee who works for tips and received more than $20 in tips during August, you are required to report them to your employer …

September 2024 Individual Due Dates

September 1 – 2024 Fall and 2025 Tax Planning 

Tax Planning Contact this office to schedule a consultation appointment.

September 10 – Report Tips to Employer

If you are an employee who works for tips and received more than $20 in tips during August, you are required to report them to your employer on IRS Form 4070 no later than September 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 8 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

September 16 – Estimated Tax Payment Due

The third installment of 2024 individual estimated taxes is due. Our tax system is a “pay-as-you-earn” system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the “pay-as-you-earn” requirement. These include:

  • Payroll withholding for employees;
  • Pension withholding for retirees; and 
  • Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding.

When a taxpayer fails to prepay a safe harbor (minimum) amount, they can be subject to the underpayment penalty. This penalty is equal to the federal short-term rate plus 3 percentage points, and the penalty is computed on a quarter-by-quarter basis.

Federal tax law does provide ways to avoid the underpayment penalty. If the underpayment is less than $1,000 (the de minimis amount), no penalty is assessed. In addition, the law provides “safe harbor” prepayments. There are two safe harbors:

  • The first safe harbor is based on the tax owed in the current year. If your payments equal or exceed 90% of what is owed in the current year, you can escape a penalty.

  • The second safe harbor is based on the tax owed in the immediately preceding tax year. This safe harbor is generally 100% of the prior year’s tax liability. However, for taxpayers whose AGI exceeds $150,000 ($75,000 for married taxpayers filing separately), the prior year’s safe harbor is 110%.

Example: Suppose your tax for the year is $10,000 and your prepayments total $5,600. The result is that you owe an additional $4,400 on your tax return. To find out if you owe a penalty, see if you meet the first safe harbor exception. Since 90% of $10,000 is $9,000, your prepayments fell short of the mark. You can’t avoid the penalty under this exception.

However, in the above example, the safe harbor may still apply. Assume your prior year’s tax was $5,000. Since you prepaid $5,600, which is greater than 110% of the prior year’s tax (110% = $5,500), you qualify for this safe harbor and can escape the penalty.

This example underscores the importance of making sure your prepayments are adequate, especially if you have a large increase in income. This is common when there is a large gain from the sale of stocks, sale of property, when large bonuses are paid, when a taxpayer retires, etc. Timely payment of each required estimated tax installment is also a requirement to meet the safe harbor exception to the penalty. If you have questions regarding your safe harbor estimates, please call this office as soon as possible.

CAUTION: Some state de minimis amounts and safe harbor estimate rules are different than those for the Federal estimates. Please call this office for particular state safe harbor rules.

Weekends & Holidays:

If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday. 

Disaster Area Extensions:

Please note that when a geographical area is designated as a disaster area, due dates will be extended. For more information whether an area has been designated a disaster area and the filing extension dates visit the following websites:

FEMA: https://www.fema.gov/disaster/declarations
IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations

 

September 2024 Business Due Dates

September 16 – S Corporations

File a 2023 calendar year income tax return (Form 1120-S) and pay any tax due. This due date applies only if you requested an automatic 6-month extension. Provide each shareholder with a copy of their Schedule K-1 (Form 1120-S) or a substitute Schedule K-1 and, if applicable, Schedule K-3 (Form 1120-S) or substitute Schedule K-3 (Form 1120-S).

September 16 – Corporations 

Deposit the third installment of estimated income tax for 2023 calendar year

September 16 – Social Security, Medicare and withheld income tax

If the monthly deposit rule applies, deposit the tax for payments in August.

September 16 – Nonpayroll Withholding

If the monthly deposit rule applies, deposit the tax for payments in August.

September 16 – Partnerships

File a 2023 calendar year return (Form 1065). This due date applies only if you were given an additional 5-month extension. Provide each partner with a copy of K-1 (Form 1065) or a substitute Schedule K-1.

September 30 – Fiduciaries of Estates and Trusts

File a 2023 calendar year return (Form 1041). This due date applies only if you were given an extension of 5 1/2 months. If applicable, provide each beneficiary with a copy of K-1 (Form 1041) or a substitute Schedule K-1.

Weekends & Holidays:

If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday. 

Disaster Area Extensions:

Please note that when a geographical area is designated as a disaster area, due dates will be extended. For more information whether an area has been designated a disaster area and the filing extension dates visit the following websites:

FEMA: https://www.fema.gov/disaster/declarations
IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations 

Burnout and Staffing Shortages Continue to Challenge Nonprofits

Nonprofits are experiencing significant difficulties as they continue to grapple with the twin challenges of burnout and staffing shortages. These issues are not new, but they have been magnified by recent events, leaving many organizations struggling to fulfill their missions effectively.
Burnout among nonprofit employees has become a widespread concern. The relentless pace of work, …

Nonprofits are experiencing significant difficulties as they continue to grapple with the twin challenges of burnout and staffing shortages. These issues are not new, but they have been magnified by recent events, leaving many organizations struggling to fulfill their missions effectively.

Burnout among nonprofit employees has become a widespread concern. The relentless pace of work, compounded by the emotional toll of serving vulnerable populations, has led to a situation where many staff members are stretched too thin. The pandemic has only intensified this problem, introducing new pressures and uncertainties that have left many nonprofit workers feeling exhausted and overextended.

Staffing shortages further exacerbate the strain on nonprofits. Many organizations are finding it increasingly difficult to attract and retain qualified personnel. Competitive job markets and the high stress levels inherent in nonprofit work have made it challenging to maintain a stable workforce. As a result, existing staff are often asked to take on additional responsibilities, which only heightens the risk of burnout.

Addressing these challenges requires a multi-faceted approach. Nonprofits must prioritize the well-being of their employees to ensure long-term sustainability. This could include implementing more flexible work arrangements, providing access to mental health support, and fostering a workplace culture that values and recognizes the contributions of every team member.

Moreover, nonprofits should consider innovative strategies to address staffing shortages. This might involve expanding recruitment efforts, offering professional development opportunities to retain existing staff, and exploring partnerships that can help share the load. By investing in their workforce, nonprofits can build a more resilient organization that is better equipped to navigate the challenges ahead.

At De Boer, Baumann & Company P.L.C, we understand the unique pressures facing nonprofits today. Our commitment is to support organizations in overcoming these obstacles by offering tailored financial management, strategic planning, and workforce advisory services. We believe that by focusing on the health and sustainability of your team, nonprofits can continue to make a meaningful impact in their communities.

In a time of ongoing uncertainty, it is crucial for nonprofits to address the root causes of burnout and staffing shortages. By taking proactive steps, organizations can create a more supportive work environment that empowers their staff and strengthens their ability to carry out their mission.

20 Solutions for Navigating Nonprofit Board Member Conflicts

Conflicts among nonprofit board members are a common challenge that can disrupt the organization’s operations and hinder its mission. These disagreements, whether rooted in differing opinions, communication breakdowns, or power struggles, can escalate if not addressed promptly and effectively. At De Boer, Baumann & Company, we recognize the importance of maintaining a harmonious and …

Conflicts among nonprofit board members are a common challenge that can disrupt the organization’s operations and hinder its mission. These disagreements, whether rooted in differing opinions, communication breakdowns, or power struggles, can escalate if not addressed promptly and effectively. At De Boer, Baumann & Company, we recognize the importance of maintaining a harmonious and productive board environment, and we offer insights on how to navigate these conflicts successfully.

  1. Establish Clear Roles and Responsibilities: Clearly defined roles and responsibilities can prevent many conflicts before they start. By ensuring that each board member understands their duties and limits, the organization can avoid confusion and overlap that often lead to disputes.

  2. Foster Open Communication: Encouraging open and transparent communication is essential. Regular, structured opportunities for dialogue allow board members to voice their concerns and opinions in a controlled environment, reducing the likelihood of misunderstandings.

  3. Create a Strong Governance Framework: A well-crafted governance framework provides a roadmap for decision-making and conflict resolution. By adhering to established policies and procedures, boards can address issues more consistently and fairly.

  4. Encourage Diverse Perspectives: Diversity of thought is a strength, but it can also be a source of tension. Boards should embrace differing viewpoints while promoting a culture of respect and collaboration, where all voices are valued.

  5. Implement Conflict of Interest Policies: Conflicts of interest can undermine trust and effectiveness. Having a robust conflict of interest policy in place, and regularly reviewing it, ensures that all board members are acting in the best interest of the organization.

  6. Utilize Mediation and Facilitation: When conflicts arise, neutral third-party mediation or facilitation can be an effective way to resolve disputes. This approach helps to ensure that all parties are heard and that solutions are reached amicably.

  7. Promote Accountability and Transparency: Holding board members accountable for their actions fosters a culture of integrity. Transparency in decision-making and operations builds trust among board members and with the broader community.

  8. Provide Ongoing Training and Education: Continuous education on governance best practices and conflict resolution can equip board members with the tools they need to navigate disagreements effectively.

  9. Set Clear Expectations for Behavior: Establishing a code of conduct for board members sets the tone for professional and respectful interactions. Clear expectations for behavior can prevent conflicts and guide board members in difficult situations.

  10. Regularly Review Board Performance: Conducting periodic assessments of board performance can help identify potential issues before they become conflicts. Regular reviews allow boards to reflect on their processes and make necessary adjustments.

  11. Foster a Collaborative Culture: Encouraging collaboration over competition helps to minimize conflict. A culture that prioritizes teamwork and mutual support creates a more cohesive and effective board.

  12. Address Issues Early: Promptly addressing conflicts when they arise can prevent them from escalating. Boards should have mechanisms in place for identifying and resolving issues as soon as they are recognized.

  13. Engage in Team-Building Activities: Team-building exercises can strengthen relationships among board members, improving communication and cooperation. These activities help board members better understand each other’s perspectives and work together more effectively.

  14. Ensure Alignment with Organizational Values: Conflicts often arise when board members’ actions are not aligned with the organization’s values. Boards should regularly revisit their mission and values to ensure that all members are working toward the same goals.

  15. Implement Decision-Making Protocols: Clear protocols for decision-making can reduce conflicts by providing a structured process for reaching consensus. These protocols should be designed to ensure that all voices are heard and considered.

  16. Seek External Expertise When Needed: Sometimes, conflicts require external expertise to resolve. Bringing in consultants or advisors with experience in nonprofit governance can provide valuable insights and solutions.

  17. Prioritize the Organization’s Mission: Keeping the organization’s mission at the forefront of all discussions can help board members stay focused on what truly matters. When conflicts arise, grounding the conversation in the mission can guide the board to a resolution.

  18. Facilitate Strategic Planning Sessions: Strategic planning sessions offer an opportunity for board members to align on long-term goals and strategies. These sessions can reduce conflict by ensuring that everyone is on the same page about the organization’s direction.

  19. Create Opportunities for Informal Interaction: Informal gatherings and social events allow board members to build relationships outside of the boardroom. Stronger personal connections can lead to more effective collaboration and conflict resolution.

  20. Maintain Flexibility and Openness to Change: Finally, boards must remain flexible and open to change. Conflicts often arise from resistance to new ideas or approaches. A willingness to adapt and evolve is essential for long-term success.

At De Boer, Baumann & Company, we understand the complexities of nonprofit governance and the challenges that come with managing a diverse board. Our team is here to support organizations in creating a strong governance framework, facilitating effective conflict resolution, and fostering a collaborative board culture. By implementing these solutions, nonprofits can navigate board member conflicts with confidence, ensuring that they remain focused on their mission and continue to serve their communities effectively.

Firm Update: Launch of the New and Improved DBC Website

We are thrilled to announce the completion and launch of our new and improved DBC website! This project has been a major undertaking, and we are excited to share the results with you. We’ve revamped the entire website, rebuilding it from scratch to better reflect DBC’s current standing and future needs. Here are some …

We are thrilled to announce the completion and launch of our new and improved DBC website! This project has been a major undertaking, and we are excited to share the results with you.

We’ve revamped the entire website, rebuilding it from scratch to better reflect DBC’s current standing and future needs. Here are some of the key upgrades you’ll notice:

 

Enhanced Performance

The new website boasts faster, more fluid layouts with mobile responsiveness incorporated. This ensures a seamless experience whether you’re browsing on a desktop, tablet, or smartphone.

Modern Design

Our website now features a clean, timeless design that will remain visually appealing for years to come. The updated aesthetic aligns with our brand’s identity and values, creating a cohesive visual experience.

Intuitive Navigation

We’ve restructured the menu hierarchy to be more straightforward and intuitive, making it easier than ever to find the information you need. This improved navigation allows for quicker access to key pages and resources.

Newsletter Subscription

We’ve integrated capabilities to gather user contact information through Constant Contact, allowing visitors to easily subscribe to our newsletter and stay updated on the latest firm news and insights.

Streamlined Information

Information within pages has been consolidated and streamlined, presenting a cohesive and tasteful layout that enhances readability.

Industry Integration

We’ve combined content from the Agriculture and Non-Profit sites into the main DBC site. This content is smartly showcased on respective industry pages, providing targeted information for our diverse clientele.

Adjustable Header Slider

The new header slider system is easily adjustable to highlight current or upcoming events, Questions of the Month, news, or other CTAs. This feature is designed to keep you up to date with the most relevant content.

 

We encourage you to explore the new site and check out all of the new features!

Thank you for your continued support and dedication to DBC. Together, we are moving forward into an exciting new chapter!

Think Twice Before Tossing:  The Critical Timing for Disposing of Your Tax Records Safely 

Now that your taxes are complete and filed for last year, you are probably wondering what old tax records can be discarded. If you are like most taxpayers, you have records from years ago that you are afraid to throw away. To determine how to proceed, it is helpful to understand why the records …

Now that your taxes are complete and filed for last year, you are probably wondering what old tax records can be discarded. If you are like most taxpayers, you have records from years ago that you are afraid to throw away. To determine how to proceed, it is helpful to understand why the records needed to be kept in the first place. Generally, we keep “tax” records for several reasons: 

Audit Defense: In the event of an IRS audit, taxpayers are required to present documentation supporting the claims made on their tax returns. Without proper records, defending against audit adjustments becomes significantly challenging.

Amending Returns: If taxpayers need to amend a return due to discovered errors or overlooked deductions, having detailed records makes the process smoother and ensures that all adjustments are accurate.

Claiming Refunds: For claiming refunds, especially those related to overpaid taxes, detailed records are necessary to substantiate the claim.

Tax Basis: When capital assets, such as stock, business assets, rentals and other investments are disposed of it is necessary to determine for tax purposes if there was a gain or loss from the transaction. The tax basis is what the asset cost plus or minus adjustments such as the cost of improvements which increase the tax basis, depreciation (reduces basis), casualty losses, or tax credits which decrease the tax basis. 

Duration for Keeping Tax Records – The general rule of thumb is to keep tax records until the statute of limitations for the tax return in question expires. The statute of limitations is the period during which the taxpayer can amend their tax return to claim a credit or refund, or the IRS can assess additional tax. 

Federal Statute of Limitations on Tax Refunds: The statute of limitations on tax refunds is a set of rules defined by the Internal Revenue Code that determines the time frame within which a taxpayer can claim a credit or refund for overpaid taxes. This statute serves two main purposes:

  • It specifies how long an individual has to file a claim for a refund or an amended return after the original return was filed or the tax was paid.
  • It sets limits on the amount of refund or credit that can be claimed, based on certain conditions.

    Some states have longer statutes, typically 4 years, so they have more time to piggyback on any federal audits and adjustments.

    Example: Sue filed her 2023 tax return before the due date of April 15, 2024. She will be able to safely dispose of most of her records after April 15, 2027. On the other hand, Don files his 2023 return on June 2, 2024. He needs to keep his records at least until June 2, 2027. In both cases, the taxpayers should keep their records a year or two longer if their states have a statute of limitations longer than three years. Note: If a due date falls on a Saturday, Sunday or holiday, the due date becomes the next business day.

Tax Return Omissions: In certain situations, such as when a taxpayer does not report income that they should report, and it is more than 25% of the gross income shown on the return, the IRS suggests keeping records for six years.

Of course, the statute doesn’t begin running until a return has been filed. There is no limit on the assessment period where a taxpayer files a false or fraudulent return to evade tax.

Indefinite Retention: For records related to property, the IRS recommends keeping them for as long as the property is owned and for at least three years after filing the return reporting the sale or other disposition of the property. This is crucial for calculating depreciation, amortization, or gains or losses on the property.

Financially Disabled – Additionally, the time periods for claiming a refund are suspended for taxpayers who are “financially disabled”. A taxpayer is financially disabled if they are unable to manage their financial affairs because of a medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12 months. For a joint income tax return, only one spouse need be financially disabled for the time to be suspended. However, a taxpayer is not treated as financially disabled during any period their spouse, or any other person, is authorized to act on their behalf in financial matters. 

The Big Problem! The problem with discarding records indiscriminately for a particular year once the statute of limitations has expired is that many taxpayers combine their normal tax records and the records needed to substantiate the basis of capital assets such as stocks, bonds, and real estate. These documents need to be separated, and the basis records should not be discarded before the statute expires for the year in which the asset is disposed. Thus, it makes more sense to keep those records separated by asset. The following are examples of records that fall into this category: 

Stock Acquisition Data — If you own stock in a corporation, keep the purchase records for at least four years after the year the stock is sold. This data will be needed to prove the amount of profit (or loss) you had on the sale. And if the result of those sales, and sales of other capital assets, is a loss that you’ll be carrying forward to future tax returns – loss exceeds $3,000 ($1,500 if filing as married separate) – keep the purchase and sale records for four years after filing the return on which the last of the loss is used up.

Stock and Mutual Fund Statements — Many taxpayers use the dividends that they receive from a stock or mutual fund to buy more shares of the same stock or fund. The reinvested amounts add to the basis in the property and reduce gains when the stock is finally sold. Keep statements for at least four years after the final sale.

Tangible Property Purchase and Improvement Records — Keep records of home, investment, rental property or business property acquisitions, AND related capital improvements for at least four years after the underlying property is sold.

In addition, if you own a business that has a loss that creates a net operating loss (NOL) that you’ll be carrying forward to deduct in future years, you should keep all the business’s records that substantiate income and expenses from the loss year for at least four years after filing the return on which the NOL deduction is used up. 

The 10-Year Statute of Limitations on Collections – Although this has nothing to do with the theme of his article, “how long does the IRS have to collect unpaid tax?” is an often-asked question. The tax code puts a 10-year limit on the time period the IRS can pursue the collection of a tax debt. This statute of limitations begins from the date the tax was assessed and not from the tax year for which the debt was incurred. Understanding this limitation is crucial for taxpayers for several reasons: 

Collection Activities: The IRS has various collection activities at its disposal, including tax liens, levies, and wage garnishments. However, these activities are bound by the 10-year statute of limitations.

Installment Agreements: When a taxpayer owes federal tax and can’t immediately pay it, they may enter into an installment payment agreement with the IRS. In this case the clock on the 10-year statute does not stop. This means the IRS must collect the full amount owed within the original 10-year period unless specific conditions extend this period.

Have questions about whether to retain certain records? Give one of our offices a call before tossing out those documents. It is better to be sure before discarding something that might be needed down the road.

Living Below Your Means:  A Key to Entrepreneurial Success

Starting a business is a thrilling adventure, filled with dreams of innovation, independence, and financial success. However, the reality of entrepreneurship often involves long hours, relentless challenges, and financial uncertainty. As tax and accounting professionals, we have seen firsthand the struggles that startups face. One of the most critical lessons for new entrepreneurs is …

Starting a business is a thrilling adventure, filled with dreams of innovation, independence, and financial success. However, the reality of entrepreneurship often involves long hours, relentless challenges, and financial uncertainty. As tax and accounting professionals, we have seen firsthand the struggles that startups face. One of the most critical lessons for new entrepreneurs is understanding the importance of living below your means to ensure the growth and sustainability of your business.

The Harsh Reality of Business Failures

Let’s start with some sobering statistics. According to the U.S. Bureau of Labor Statistics, approximately 20% of new businesses fail within the first year, and about 50% fail by their fifth year. These numbers can be daunting, but they highlight the importance of careful financial planning and prudent spending.

The Temptation to Overspend

It’s natural to feel a sense of accomplishment and entitlement when you finally launch your own business. After all, you’ve taken a significant risk and invested countless hours into making your dream a reality. However, this sense of achievement can sometimes lead to the temptation to pay yourself a hefty salary or indulge in luxuries your business can’t yet afford.

The Importance of Living Below Your Means

Living below your means is a concept that applies to personal finance, but it’s even more crucial for entrepreneurs. Here’s why:

  1. Cash Flow Management: Cash flow is the lifeblood of any business. By keeping your personal expenses low, you can ensure that more money stays within the business, allowing you to reinvest in growth opportunities, cover unexpected expenses, and weather financial downturns.
  2. Investor Confidence: If you’ve raised outside capital, your investors expect you to be a good steward of their money. Paying yourself an exorbitant salary can erode their confidence and potentially jeopardize future funding rounds. Demonstrating financial discipline shows that you are committed to the long-term success of the business.
  3. Sustainable Growth: Rapid growth can be exciting, but it can also be risky if not managed properly. Living below your means allows you to grow your business at a sustainable pace, ensuring that you have the resources to support expansion without overextending yourself financially.

Practical Tips for Living Below Your Means

  1. Set a Modest Salary: Determine a reasonable salary for yourself based on your business’s financial health and industry standards. Remember, your goal is to ensure the business’s survival and growth, not to maximize your personal income in the short term.
  2. Separate Personal and Business Finances: Keep your personal and business finances separate to avoid the temptation to dip into business funds for personal expenses. This also simplifies accounting and tax reporting.
  3. Create a Budget: Develop a detailed budget for both your personal and business expenses. Track your spending meticulously and look for areas where you can cut costs.
  4. Reinvest Profits: Instead of taking large distributions, reinvest profits back into the business. This could mean upgrading equipment, hiring additional staff, or expanding your marketing efforts.
  5. Plan for the Future: Build an emergency fund for your business to cover unexpected expenses or downturns. This financial cushion can provide peace of mind and stability during challenging times.

Road to Success

Being an entrepreneur is not just about having a great idea or a passion for your industry. It’s about making smart financial decisions that ensure the longevity and success of your business. By living below your means, you can create a solid foundation for growth, maintain investor confidence, and navigate the inevitable ups and downs of entrepreneurship.

Remember, the sacrifices you make today can lead to greater rewards in the future. Stay disciplined, stay focused, and keep your eye on the long-term vision for your business. Your future self—and your business—will thank you.

Get Those Kids a Job: The Tax Advantages of Securing Summer Jobs for Your Children

Children who are dependents of their parents are subject to what is commonly referred to as the kiddie tax. This generally applies to children under the age of 19 and full-time students over the age of 18 and under the age of 24.The kiddie tax originated many years ago as a means to close …

Children who are dependents of their parents are subject to what is commonly referred to as the kiddie tax. This generally applies to children under the age of 19 and full-time students over the age of 18 and under the age of 24.

The kiddie tax originated many years ago as a means to close a tax loophole where parents would put their investments under their child’s name and social security number so that their investment income would be taxed at lower tax rates. Enter the kiddie tax, under which unearned income (investment income) more than a minimum amount is taxed at the parent’s highest marginal tax rate.

Tax-Free Income – On the bright side, a child’s earned income (income from working) is taxed at single rates, and the standard deduction for singles is $14,600 for 2024. This means that your child can make $14,600 from working and pay no income tax (but will be subject to Social Security and Medicare payroll taxes), and if the child is willing to contribute to a traditional IRA, for which the 2024 contribution cap is $7,000, the child can make $21,600 from working—federal income tax free.

Even if your child is reluctant to give up any of their hard-earned money from their summer or regular employment, if you, a grandparent, or others have the financial resources, the amount of an IRA contribution could be gifted to the child, giving your child a great start toward their retirement savings and hopefully a continuing incentive to save for their retirement.

Employing Your Child – If you are self-employed (an unincorporated business), a reasonable salary paid to your child reduces your self-employment (SE) income and your income tax by shifting income to the child.

For 2024, when a child under the age of 19 or a student under the age of 24 is claimed as a dependent of the parents, the child is generally subject to the kiddie tax rules if their investment income is upward of $2,600. Under these rules, the child’s investment income is taxed at the same rate as the parent’s top marginal rate using a lower $1,300 standard deduction. However, earned income (income from working) is taxed at the child’s marginal rate, and the earned income is reduced by the lesser of the earned income plus $400 or the regular standard deduction for the year, which is $14,600. If a child has no other income, the child could be paid $14,600 and incur no income tax. If the child is paid more, the next $11,600 he or she earns is taxed at 10%.

Example: You are in the 22% tax bracket and own an unincorporated business. You hire your child (who has no investment income) and pay the child $16,500 for the year. You reduce your income by $16,500, which saves you $3,630 of income tax (22% of $16,500), and your child has a taxable income of $1,900 ($16,500 less the $14,600 standard deduction) on which the tax is $190 (10% of $1,900). The net income tax saved by the family is $3,440 ($3,630 – $190).

If the business is unincorporated and the wages are paid to a child under age 18, he or she will not be subject to FICA – Social Security and Hospital Insurance (HI, aka Medicare) – taxes since employment for FICA tax purposes doesn’t include services performed by a child under the age of 18 while employed by a parent. Thus, the child will not be required to pay the employee’s share of the FICA taxes, and the business won’t have to pay its half either. In addition, by paying the child and thus reducing the business’s net income, the parent’s self-employment tax payable on net self-employment income is also reduced.

Example: Using the same circumstances as the example from above, and assuming your business profits are $180,000, by paying your child $16,500, you not only reduce your self-employment income for income tax purposes, but you also reduce your self-employment tax (HI portion) by $442 (2.9% of $16,500 times the SE factor of 92.35%). But if your net profits for the year were less than the maximum SE income ($168,600 for 2024) that is subject to Social Security tax, then the savings would include the 12.4% Social Security portion, $1,889 (12.4% of $16,500 x 92.35%), in addition to the 2.9% HI portion for a total savings of $2,331 ($442 + $1,889).

A similar but more liberal exemption applies for FUTA, which exempts from federal unemployment tax the earnings paid to a child under age 21 while employed by their parent. The FICA and FUTA exemptions also apply if a child is employed by a partnership consisting solely of the child’s parents. However, the exemptions do not apply to businesses that are incorporated or a partnership that includes non-parent partners. Even so, there’s no extra cost to your business if you’re paying a child for work that you would pay someone else to do anyway.

Retirement Plan Savings – Additional savings are possible if the child is paid more and deposits the extra earnings into a traditional IRA. For 2024, the child can make a tax-deductible contribution of up to $7,000 to his or her own IRA. The business also may be able to provide the child with retirement plan benefits, depending on the type of plan it uses and its terms, the child’s age, and the number of hours worked. By combining the standard deduction of $14,600 and the maximum deductible IRA contribution of $7,000 for 2024, a child could earn $21,600 of wages and pay no income tax.

However, referring back to our original example, the child’s tax to be saved by making a $7,000 traditional IRA contribution is only $190, so it might be appropriate to make a Roth IRA contribution instead, especially since the child has so many years before retirement and the future tax-free retirement benefits will far outweigh the current $190 savings.

If you have questions about the information provided here and other possible tax benefits or issues related to hiring your child, please give one of our offices a call.

About us

De Boer, Baumann & Company provides professional accounting, tax, and business advisory services to individuals and businesses in West Michigan and the surrounding areas. With expertise in a variety of industries, DBC specializes in comprehensive and innovative solutions to help clients achieve their financial goals.