club_cafe: What are Your Questions?
| HelpRegister |
club_cafe: What are Your Questions? Laurie, I am still confused why one person on the support staff says to deposit BI dues into broker account so the member can get units and then pay BI out of account so they can get credit as an expense. Another support said to Never put BI dues into any account but instead make each member write an individual check to BI and there is no credit for an expense. I want to do this right and have changed my method twice, trying to follow the directions from support. I guess my first question is: is the BI dues an expense? You have helped me so much in the past. I would like you to include this information in your question sheet. I am sure I am not the only treasurer having this problem. Kittie -----Original Message----- Hi Kittie, Thank you for bringing this up. It does cause a lot of confusion so I'm sure you're not the only person with the question. There are several things going on which it helps to understand. 1. BI individual dues are a tax deductible expense for an individual. They are reported on your Schedule A under miscellaneous itemized deductions. For you to get the benefit of the deduction, the total in this category must exceed 2% of your AGI (Adjusted Gross Income). There is no reason this expense has to come through your club accounts for it to be deductible. 2. Your club accounting is designed to account for expenses that apply to every person in the club and are split up in one of two ways, either by allocating each person an equal dollar amount or by allocating by the persons percent ownership in the club. 3. There is no way in your accounting to allocate an expense to only one member and have it tracked as an expense for just them. 4. The problem with the individual portion of BI dues is that many times, not everyone in the club wants the same thing. Sometimes one person wants the limited membership and another wants the full membership. If you pay the membership with club funds there is no way to allocate the expense this way. We can give you a workaround to track the cash if you've already put the money in the club accounts and sent in a club check. However it is cumbersome and even then the tax deduction will not show up on the members K-1. They will have to track and report the expense themselves. There is no reason to pay the membership with club funds. The person will get the tax deduction either way. Because of the complications with the accounting, our recommendation is not to pay BetterInvesting individual dues with club accounts. Don't deposit them into your club accounts and don't pay them from your club accounts. Just have each member write a check directly to BI, put all the checks in the same envelope and send them in with the club portion of your membership (which should be paid for from club funds). I know it seems like it but you really didn't get conflicting answers from us in support. It's just that we try to tell you to avoid the situation by saying, don't do things through club accounts. But, if you already have, we have to give you a way to deal with it. Investment club expenses raise a lot of questions. We did a webinar last year about them. You can find a link to it on the bivio library page. www.bivio.com/hn/library-faq.html Perhaps we should present the webinar again. If others are interested, let me know. I'd be glad to set it up. Hope this helps. -- Laurie Frederiksen Invest with your friends! www.bivio.com Follow us on twitter! www.twitter.com/bivio |
|
||||||