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Taxes

16 years 2 months ago #142134 by JHB
Replied by JHB on topic RE: Taxes
Mom2Punkin

When did you incorporate as that's when your current organization legally was "born"?
(I'm wondering how long it has existed.)

As far as filing taxes, all of our PTO's would hopefully be considered 501(c)(3) tax exempt entities. You get to that point one of two ways:

* Self-proclaimed: Gross income less than $5000 per year. Follow all rules. Operate as 501(c)(3). (But it can be hard to PROVE you are a 501(c)(3) to donors as the IRS doesn't really know you exist and there's no way for people to check on you.)

* IRS Determined: Filed 1023 Application with IRS and have been officially designated as a 501(c)(3).

The problem is that many are neither of these. They make more than $5000 but never formalized and just operate off-radar.


Prior to tax year 2007, if a 501(c)(3) made more than $25,000 (gross), they filed an informational returned called a 990 or 990EZ. Not filing "told" the IRS you had less than 25K. No one really checks. But if you "forgot" to file and notify them and file late, you are hit with penalties of $20 per DAY. You can often get the penalties waved, but it will take a few months of correspondence and such.

Starting with tax year 2007, they are introducing the e-postcard and all 501(c)(3)s will file SOMETHING. This is going to be interesting, because it's going to put a lot more organizations at a crossroads. There's not going to be as much grey area with the potential justification - "oh, we're too small to worry about it".
16 years 2 months ago #142121 by gjcoram
Replied by gjcoram on topic RE: Taxes
The IRS has never sent me anything; I wouldn't count on receiving anything. I think maybe, if you file one year, they'll send you something the next year -- just like your income taxes. Your kids don't get 1040s in the mail, even though they have SSNs.

I called the IRS to double-check that no previous officer had filed anything (they hadn't -- except that one of them had requested a new EIN because the one we'd been using had expired ... and that new EIN never made it to the bank account or anywhere else, so I almost filed 1023 with the wrong EIN). That's when they told me they wanted 3 back years.
16 years 2 months ago #142112 by Mom2Punkin
Replied by Mom2Punkin on topic RE: Taxes
I'm guessing the IRS will request this of me directly??
16 years 2 months ago #142076 by gjcoram
Replied by gjcoram on topic RE: Taxes
Good for you!

You might want to have a look at Form 990 or 990-EZ. The IRS wants me (and hence probably you) to file 3 previous years of this form, and the numbers are similar to what's on 1023 for 501c3, but I learned a couple better ways to enter the data by seeing how it's reported on 990-EZ.
16 years 2 months ago #142055 by Mom2Punkin
Replied by Mom2Punkin on topic RE: Taxes
I only have a few more pages to complete on the 501c3 - hoping to finish it over spring break this week.

Thanks for the info about taxes!
16 years 2 months ago #142052 by gjcoram
Replied by gjcoram on topic RE: Taxes
Tax season for PTOs is based on your fiscal year, which is usually aligned with the academic year -- fewer outstanding checks, bills, etc. in the summer. Our tax reports are due in November (4 months or so after the close of the FY).

I'd start looking into that 501c3, if I were you. :)
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