In today’s competitive environment, offering employees an equity interest in your business can be a powerful tool for attracting, retaining and motivating quality talent. If your business is organized as a partnership, however, there are some tax traps you should watch out for. Once an employee becomes a partner, you generally can no longer treat him or her as an employee for tax and benefits purposes, which has significant tax implications.
Every not-for-profit organization needs a comprehensive succession plan to ensure smooth leadership transitions. Here are five tips for making a written plan successful:
1. Look within. It’s important to develop employees who can move up the ladder when an executive director or other senior manager leaves. But don’t rule out hiring an outsider. Promoting from within can be difficult for smaller organizations with limited “bench strength.”
All charitable donations aren’t created equal — some provide larger deductions than others. And it isn’t necessarily just how much or even what you donate that matters. How the charity uses your donation might also affect your deduction.
Take vehicle donations, for example. If you donate your vehicle, the value of your deduction can vary greatly depending on what the charity does with it.
Determining your deduction
You can deduct the vehicle’s fair market value (FMV) if the charity:
- Uses the vehicle for a significant charitable purpose (such as delivering meals-on-wheels to the elderly),