Serving on a Not-for-Profit Board

Serving on the Board of Directors for a not-for-profit organization is a terrific way to give back to the community in which you live or work. Everyone has some talent to offer; it may be as a professional such as an accountant, as a sales person who has experience in marketing, or as a family member in a community who has a commitment to its future. What matters most is that the experience is rewarding to you personally which results in enthusiasm for the organization’s cause.


The most fulfilling volunteer experience will result from serving on the board of an organization whose mission you agree with and feel strongly about. As a Board Member, you will be a representative of the organization to the general public and should strive to enhance the organization’s reputation. You will also be expected to promote the mission of the organization and garner support for the organization. You will be expected to contribute financially to the organization to the extent your means allow and to participate in fundraising activities. Board Members should read and understand the organization’s by-laws as well as financial statements issued to them and be prepared to participate in the discussions during board meetings. As a board member, you assume a “duty of care” responsibility and therefore must understand and oversee financial matters, internal controls and the management of the organization. This responsibility should not be taken lightly.


The ultimate goal of serving on a board should be to leave the organization in a better position than when you joined the board.


Blog contributor: Tish Michelson

New Requirements for the 1099B in 2011

Under new regulations effective in 2011, Investment companies will be required to report on the 1099-B adjusted cost basis as well as gross proceeds to the IRS, and whether the holding period of the disposed security was short-term or long-term. The objective of the new requirements is to help ensure that investors accurately report gains and losses of securities in their annual tax filings.

Right now, a taxpayer who tells a broker to sell shares in a stock often doesn't specify which lot to draw from. The person may own hundreds of shares of the stock, with groups purchased in separate lots at different times, for different prices. The choice of lot has a direct bearing on cost basis so it is important for the taxpayer to know exactly which lot he is selling in order to plan for the taxes on the sale.

Except for securities(mutual funds) eligible for and using average cost, most investment companies are required to set a default relief method of first in, first out (FIFO) to determine cost basis. Both of these methods however may not always be the most tax advantaged. Taxpayers will now need to provide adequate notification to their investment companies if they wish to use a method other than these defaults.

What does this mean for the taxpayer? It means the IRS is attempting to increase scrutiny of gains and losses as a result of you selling your investment assets. The IRS intends to match the newly required information to what you report on your return. Therefore, ensure that you keep adequate records and at the time of sale, communicate to your investment broker your cost basis choices if they are different from what the investment company is using.

Alternative Minimum Tax by Karla Hopkins

The alternative minimum tax (AMT) is a separate tax system that runs parallel with the regular tax system and generally imposes a minimum tax on taxpayers who have substantially lowered their regular tax liability by taking advantage of items including certain itemized deductions, exemptions, and credits. Essentially, the AMT system recalculates an individual's tax liability using a separate formula under which many of the otherwise available reductions to taxable income are disallowed. The alternative tax is then compared to the taxpayer's regular tax, and the higher amount must be reported as the tax due. Certain amounts of income are exempt from the AMT, but the exemption amounts are not indexed for inflation. Consequently, more taxpayers are impacted as income levels rise due to inflation. In recent years, Congress has provided some relief by passing temporary increases in exemption amounts.

Although the alternative minimum tax (AMT) system was originally enacted to ensure that all taxpayers, particularly high-income taxpayers, paid at least a minimum amount of federal income tax, government projections indicate that a high percentage of middle income taxpayers will become subject to the AMT in the future.

The computations involved in determining whether a taxpayer is required to pay AMT are extremely complex. Given the complexity of the rules and the increasing numbers of individual taxpayers who are finding themselves subject to the AMT system, individuals may benefit from tax planning to minimize or eliminate AMT liability. In planning to minimize overall tax liability, however, it is important to consider both regular tax liability and potential AMT liability, because minimizing regular taxes can generate AMT liability, and a focus solely upon avoiding or reducing AMT liability can result in an increase in regular tax liability. Generally the best case scenario under the current regulations is for your regular tax calculation to be as close to the AMT tax calculation.