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We’re Shocked: IRS Announces 2021 Key Filing Dates, Tax Season Starts February 12th

1/25/2021

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Your tax refund may come later this year.
#whatthefox is right!
 
If you frequent the IRS.gov virtual newsroom (like we do), you’ll discover these facts:
 
“The Internal Revenue Service announced that the nation's tax season will start on Friday, February 12, 2021, when the tax agency will begin accepting and processing 2020 tax year returns. The February 12 start date for individual tax return filers allows the IRS time to do additional programming and testing of IRS systems following the December 27 tax law changes that provided a second round of Economic Impact Payments and other benefits.”
 
Although shocking and unprecedented, the IRS has reason (outlined in this full article): to make sure people eligible for stimulus money, receive those funds before filing their taxes. That’s nice - we’ll let them slide this year.
 
We encourage you to read the IRS’s latest news release for simple steps to speed your refund and a full list of key filing season dates.
 
As we’ve said before, our team at Blue Fox is up to speed on the latest tax law changes, and there are a lot. As you can imagine, tax preparation has never been more complex or intricate as it will be in 2021.
 
If you could use tax support, let’s chat! We serve individuals, self-employed folks, nonprofit organizations, and small businesses. 
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Chills, Thrills, and Dollar Bills, Part 2

1/7/2021

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Here’s Why Cash is King for Your Nonprofit During the 2020/2021 Economic Crisis

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In our latest blog post, [Chills, Thrills, and Dollar Bill, Part 1] we talked about what a cash flow is, and why it's important for your nonprofit. Now let's dive deeper into 12 ways to steward your organization’s position during tough times.

Revenue
Automate earned revenue whenever possible.
If you’re collecting fees from individuals for a service, you should be automating that process! Why? It’s key to keeping your cash flow level. 
  • Let’s use a school for example. Say a parent is three weeks late on a payment, however, you still have to pay your staff, your building, water and electricity to keep the lights on. Don’t be left holding the bag because your beneficiaries have failed to pay. You need cash to operate, that’s the bottom line..
Keep major donors close and informed. Don’t be shy to include them when things aren’t going well. They are going to keep you afloat. Care about them, thank them, and don’t be afraid to talk to them. Keep them involved so that if you need to make new or different asks they are ready and willing to give! 

Don’t expect pre-2020 levels of institutional funding to return for a while. Word on the street is not to expect grant funding to return to normal in 2021. Understand that your development team’s attention might be better spent on cultivating other sources of revenue besides grants.

Now is the time to try new things. Innovate, test, adapt, test and repeat! Most organizations have some room to deliver an earned revenue model to their constituents. You can no longer afford to wait to diversify your funding streams. 
Expenses
​Analyze expenses but don’t analyze to death. What matters is how you deliver on mission. Don’t get analysis paralysis. Know your major buckets of expenses and be prepared to make strategic spending decisions.

Know the difference between ROI (return on investment) and ROS (return on scarcity). ROS is a really interesting way to say opportunity cost. Scarcity is a lack of something; nonprofits often suffer from a “scarcity mindset.” So as you look at your spending, consider: if you choose not to fund certain activities due to concerns around scarcity, what opportunities are being lost as a result? Are you  eliminating something from your budget that results in a  negative impact to your mission?

Protect Your Cash on Hand. The following tips might seem a little obvious or like a “Risk Management 101” but they are great reminders.

Pay down credit card debt. Organizational credit card debt can really hamstring your ability to save for the future. Wherever possible, if cash allows, pay down your credit cards to avoid paying overly high interest rates. 

Obtain line of credit. If you already have a line of credit, KUDOS! But use cautiously. Remember it's a loan you have to pay it back. Right now we're seeing some lending happening at the community bank and credit unions level, but the larger banks are not being so generous. If you can obtain a line of credit, even if it’s small, that could help you get by.

Determine when to use EIDL funds. If you took an Economic Injury Disaster Loan in 2020, proceed with caution. Think of your EIDL money as an internal line of credit. Sit on the money as long as you can and see if you need it. If you’re going to draw on it, have a plan for how you will repay the funds. EIDL funds are still loans. So you and your board should tap into those funds carefully. 

Understand FDIC insurance limits on bank accounts. The Federal Government ensures up to $250,000 in bank accounts, so if your organization has more than that in any single bank account, the balance is unprotected. If you want to mitigate that risk, talk to your bank about where you can move your funds to be protected. 

Manage risk to investments; focus on capital preservation. You might have already done this in 2020 but talk to your investment advisors and find out more about your asset allocation and the risk exposure for your organization’s investments.

Pro tip: Keep your board in the loop-they have ultimate fiduciary responsibility for your nonprofit. They are on the hook financially and legally, so make sure your board is on board at all times. 
To quote Yogi Berra, “if you don’t know where you are going, you might wind up someplace else.” 

A keen eye on cash will help you manage your organization more effectively and it will also help your board, leadership and constituents know that you are prepared to move your organization forward regardless of the crazy times we’re living in now.

If you’re looking to dive deeper into planning your 2021 budget and cash flow, our friendly team at Blue Fox is here to help! Give us a call at (321) 233-3311 or email us at hello@yourbluefox.com. We’ll get you sorted! Then you can focus on what really matters: your mission and serving your community.

You can also schedule a free budget consultation: https://calendly.com/chat-with-chantal
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Chills, Thrills, and Dollar Bills, Part 1

1/7/2021

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Here’s Why Cash is King for Your Nonprofit During the 2020/2021 Economic Crisis

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The Benjamins. That bankroll. Can you tell we’re talking about CASH? Keeping a keen eye on cash flow goes hand-in-hand with creating a meaningful budget for your organization. [Shameless plug, check out our blog post on How to Create a Fairly Meaningful Budget for 2021]

Our CEO, Chantal Sheehan, at Blue Fox recently spoke on the topic of how cash is king at Nonprofit Hub’s Cause Camp conference in October. Her urgent advice to nonprofits is to pay special attention to cash flow specifically during this economic downturn in order to survive. Why?

​A cash flow forecast is a projection that shows the strength of your cash position over time. Because a projection like this shows you where you’re going to be in 6, 9, 12, or 24 months from a pure cash standpoint, we feel it’s a nonnegotiable tool. 

So what does a cash flow forecast look like? The good news is that they aren’t that hard to build most of the time!

We typically build our forecasts out in a spreadsheet. Rows detail cash inflows and outflows, and columns list out each month in the period you’re forecasting. 

So imagine: your current cash position (i.e. balances of all your cash/bank accounts) is at the very top. Then cash inflows (revenue, receipts from invoices, investment income, etc) follow.  Finally, your outflows (i.e. expenses, debt payments, capital purchases) are listed at the bottom. 

For example, say you start with $100,000 in the bank, then you make $50,000 in Month 1, while  you spend $25,000 in the same t month. Your cash position at the end of Month 1 would = $125,000. ($100,000 + $50,000 - $25,000) 

So your cash flow forecast shows you where you started, what money you took in and what went out.   This type of projection is extremely useful when built out for 12 months or longer. 

Pro tip: The most financially stable and sustainable organizations pay attention to cash flow because they know it affects everything from their events to payroll.. 

Now that we’ve covered the importance of cash flow, we're going to dive deeper in our part 2 of this series and cover 12 ways to steward your organization’s position during tough times. 

In the mean time, if 
you’re looking to dive deeper into planning your 2021 budget and cash flow, our friendly team at Blue Fox is here to help! Give us a call at (321) 233-3311 or email us at hello@yourbluefox.com. We’ll get you sorted! Then you can focus on what really matters: your mission and serving your community.

You can also schedule a free budget consultation: https://calendly.com/chat-with-chantal
​
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Key Takeaways From the Latest COVID-19 Relief Bill, Including PPP2

1/2/2021

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As you read, remember that our team at Blue Fox is happy to answer questions, provide assistance with PPP applications and forgiveness, and help your organization navigate the pandemic’s financial challenges.

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On December 21st, the U.S. Senate and House of Representatives passed the $900 billion COVID-19 relief bill: Consolidated Appropriations Act, 2021. [Warning: it’s 5,593 pages… speed readers only!]

So, what does it mean for you?
Here is a brief recap of the key takeaways, as summarized by the Journal of Accountancy. (Yes, we summarized a summary, just for you.)

Key takeaways for individuals and self-employed: 
The Bill: 

  • Provides $600 for individuals making up to $75,000 per year and $1,200 for married couples making up to $150,000 per year, as well as a $600 payment for each child dependent.  
  • Extends the Pandemic Unemployment Assistance (PUA) program, with expanded coverage to the self-employed, gig workers, and others in nontraditional employment.   
  • Extends PPP Loans to sole proprietors, independent contractors, and eligible self-employed individuals.


Key takeaways for small business, nonprofits, not-for-profits: 
The Bill: 

  • Extends PPP loans to 501(c)(6) not-for-profit organizations (churches, chambers of commerce, business leagues, etc.) for the first time provided they have 300 or fewer employees and do not receive more than 15% of receipts from lobbying.  
  • Allows previous PPP recipients to apply for another loan of up to $2 million if they have 300 or fewer employees, have used or will use the full amount of the first PPP loan and can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.  
  • Specifies that business expenses paid with forgiven PPP loans are tax-deductible. (Huge good news!)
  • Temporarily allows a 100% business expense deduction for meals (rather than the current 50%) as long as the expense is for food or beverages provided by a restaurant. Applies to expenses incurred Dec. 31, 2020 through the end of 2022.

Simplified Application
The new COVID-19 relief bill also:
  • Creates a simplified forgiveness application process for loans of $150,000 or less. 
  • Repeals the requirement that PPP borrowers deduct the amount of any EIDL advance from their PPP forgiveness amount.
  • Includes set-asides to support first and second-time PPP borrowers with 10 or fewer employees, first-time PPP borrowers that have recently been made eligible, and for loans made by community lenders.

For more details read: COVID-19 relief bill addresses key PPP issues by Journal of Accountancy or visit U.S. Small Business Association PPP Resource Page.

Or, Just Ask Blue Fox For Help!
Our team is happy to answer questions, provide assistance with PPP applications and forgiveness, and help your organization navigate the pandemic’s financial challenges. Give us a call at (321) 233-3311, schedule a phone call, or email hello@yourbluefox.com. 
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    Welcome to the Blue Fox Blog! A fairly entertaining source of info and news related to our company, nonprofits, social sector trends, and, of course, accounting. Enjoy!

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BLUE FOX
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(321) 233-3311, Email: hello@yourbluefox.com
Mailing Address: 2542 Woodfield Circle, Melbourne, FL 32904
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​Holiday office closures:
To give our employees time to unplug and refresh with their family and friends, the Blue Fox virtual office closes 
for all federal holidays, the week of Thanksgiving, and the week between Christmas and New Year's Day.
  • Accounting Services
    • Employee Retention Credit (ERC) Eligibility
  • Tax Preparation
    • Tax Deadlines
  • About
    • Our Founder & CEO
    • Our Team
    • Our Clients
    • Now Hiring: Bookkeeper
    • Our Philosophy
    • Benefits of Outsourced Accounting Services for Nonprofits
    • Technology Solutions
    • Testimonials
    • FAQs
    • Join the Team >
      • Now Hiring: Tax Specialist (Remote)
  • Blog
  • Freebies
  • Contact
  • Subscribe