As the new year unfolds, HOA communities embark on crucial planning endeavors. To ensure a prosperous year ahead, it's imperative to update checklists and organize financials promptly. Here's a breakdown of key tasks to tackle in February:
Budget Review
Dive into last year's financial documents to assess alignment and performance. Analyze variances between projected and actual expenses to refine this year's financial strategy. Consider examining budgets from previous years for enhanced insights.
Tax Preparation and Filing
Despite being not-for-profit entities, HOAs are recognized as corporations by the IRS. Consequently, filing taxes and identifying non-exempt income is mandatory. Choose between Form 1120 and Form 1120-H for tax returns. Ensure taxes on leftover income, including reserves, are filed appropriately.
Financial Review Coordination
Determine the level of assurance needed for your community's financial statements. Options include reviews, compilations, or audits. Reviews offer limited assurance through analysis and discussions, while compilations provide summaries without assurance. Audits involve a comprehensive examination to confirm the accuracy and validity of financial information.
Distribution of Financial Reports
HOA homeowners have the right to access the community's financial reports. Upon completion of review by the CPA, compile and distribute these reports to homeowners promptly. If an audit is conducted, ensure the report is delivered to the association within 90 days of the turnover date.
Get in Contact
Contact Dominic Cirillo at Atlantic & Pacific Management at (858) 672-3100 or visit aphoamgmt.com to get started.
With over four decades of experience, Atlantic & Pacific Management is dedicated to providing top-tier service to HOA communities in California. We're eager to extend our expertise to your HOA community for a successful year ahead.
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