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Does the PTO need to file a tax return?

12 years 8 months ago #127777 by TAX ADVICE NEEDED PLEASE
Does the PTO need to file a tax return? was created by TAX ADVICE NEEDED PLEASE
Does the PTO need to file a federal or state tax return? Any references will be helpful, Thanks!
12 years 8 months ago #128116 by Critter
If your PTO is a federally-registered 501c3 tax-exempt non-profit charity (like many, many PTOs), then yes. You need to file Form 990 or 990EZ every year. Can't say for sure what your state requires.

If your PTO is informally organized, and not (yet) registered with the IRS, then there's no need to file a form from an organization the IRS doesn't even know about. However, depending on the size ($) of your PTO, it might be time to formalize with the IRS. If you can provide more info, maybe we all can provide more advice.
12 years 8 months ago #128144 by JHB
It's true many organizations operate under the radar and never file anything, but here's what they are supposed to do.

An organization that brings in over $5000 per year (that's gross income, everything that comes in, not profit), is supposed to file with the IRS. If you aren't set up as a 501(c)(3), then you are are a business and should file a commerical return.

If you ARE set up as a 501(c)(3) non-profit with the IRS, then filing a return (form 990/990EZ) is voluntary until income reaches $25,000 per year. Then it's mandatory.

If you call the IRS, that's pretty much what they will say. However, I've yet to hear of a PTO that did file a return declaring themselves a small business. Most just ignore the whole situation and do nothing.

Note - in the case of a 501(c)(3) filing its annual return, there is normally no payment due. It's more of a report, so it's called an "informational" return.

I would guess that if you DID file a commercial return, the charitable contributions (if they could be claimed) and expenses would end up offsetting any income to the point where you had no profit on which to pay taxes. But I've never done it and there are lots of variables.

Oh - and if you make the mistake of allowing the PTO bank account to be set up under an individual's SSN, and that person gets audited or runs into financial problems - then the funds coming into the PTO account could be seen as PERSONAL income. They could be taken to pay a debt, considered part of income he/she has to pay taxes on, or frozen if the personal accounts are frozen.
12 years 8 months ago #128228 by njmom
If you aren't comfortable preparing the 990, try looking for a parent that is a CPA. We have a mom that prepares our return free of charge. She owns her own business and can't volunteer. This is her way of contributing and participating in our PTO. Needless to say, she is greatly appreciated!
12 years 8 months ago #128241 by Diane139
I agree with the other replies but I'd like to add that in terms of 501(c)(3) status I believe there is a category for "unincorporated association." I know that term is in the instructions for Form 1023, the application for tax-exempt status. I don't know if it's an option when filing those informational returns. (We haven't done so yet.)
12 years 8 months ago #128256 by dlf
Okay--here's our situation J--maybe you can help. We have been established for 3 years. Each year we've submitted for 501 status and for one reason or another we haven't received approval (lost application, application never received blah blah). We have had a 990 filed for the past 2 years...so do we continue and our FY ends according to our bylaws when the schools FY ends (June) any impact that might have?. Thanks for your brilliance...d
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