Question: Do we owe taxes on money raised at school?
I was told that if we hold a function at the school and end up making more than $100 at the event, it can be considered a fundraiser and we would have to pay taxes on the money. Is this true?
Advice from PTO TodayElly writes:
If your parent group is a nonprofit and you’re doing work directly related to the group’s charitable mission—helping the children and the school, for example—then any money you make isn’t taxed. That’s true no matter how much money you make and no matter whether you raise that money on campus or off.
However, the only way to be sure that your group is truly nonprofit is to register with the IRS as a tax-exempt charity under section 501(c)(3) of the federal tax code. Applying takes time and a certain amount of work. But it’s worth the effort, and PTO Today’s PTO Start-Up Toolkit will walk you through the process. You also should check with your state tax office about obtaining an exemption from sales tax for items you sell.
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