Tax Insights

Your Guide to State, Local, Federal, Estate + International Taxation

The Collision of Nonprofits and Individuals

With the extension of the individual (Form 1040) tax deadline to May 17 from April 15 we ran into something we have never seen before. Well, in my thirty plus years of public accounting, I have never seen it. The main cohort of people in the tax department had the same deadline as the those working on nonprofit returns. Returns for nonprofits and individuals were due at the same time!

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Now, nonprofits and individuals cross paths all the time – individuals contribute to nonprofits, earning them a charitable deduction on their tax return. Caveat: As long as they itemize. Except in 2020 or 2021, when the IRS has a “special” charitable deduction for those utilizing the standard deduction instead of itemizing on Schedule A. And Arizona, which has something similar, except it is more generous – 25% of your total charitable contributions.

But I digress.

This was a different collision – not a donor/donee collision. But a tax team collision of varying workloads during a still compressed, but extended tax season. In prior years, the tax team had a definite break from working on tax returns, to focus on working on the nonprofit returns. But this year, bunches and bunches of tax returns needed to be done, apparently simultaneously. Adding to the impact, several of these same team members also prepare payroll reports, which were due April 30, and it has been a wild ride for sure.

Thanks to a big assist from our actual nonprofit audit group who stepped in and helped with the preparation of some of these returns, before starting on their audit workload for the summer, we did it.

The big collision turned out to be more of a fender bender. Still somewhat stressful, but no lasting injuries. And now, we are really and truly ready for a definite break. And a true day off.

If you have any questions on nonprofit or individual returns, feel free to contact a Henry+Horne tax professional.

Donna H. Laubscher, CPA