|
|
Posts Tagged ‘income taxes’
Wednesday, September 1st, 2010
What are the Tax Requirements for Barter Exchanges?
Barter exchanges, whether Internet based or with a physical location, are required to file Form 1099-B for all transactions unless certain exceptions are met. Barter exchanges are not required to file Form 1099-B for:
Exchanges through a barter exchange having fewer than 100 transactions during the year
Exempt foreign persons as defined in Regulations section 1.6045-1(g)(1)
Exchanges involving property or services with a fair market value of less than $1.00
For calendar year 2008, Copy B of Form 1099-B is due to barter exchange participants by February 2, 2009. Copy A of the form is required to be filed with the IRS by March 2, 2009. If filing electronically, the due date is March 31, 2009. Software that generates a file according to the specifications in Publication 1220, Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically (PDF) must be used by barter exchanges. The IRS does not provide a fill-in form option.
Caution: Paper forms are scanned during processing by the IRS. Forms 1096, 1098, 1099, or 5498 that are printed from IRS.gov will not be accepted.
Non-corporate client or member bartering is reported on a transactional basis on Form 1099-B, but additional information is to be added to the form by the barter exchange. Under Regulation 1.6045-1(f)(i), barter exchanges are required to make a return of information reporting the name, address, and taxpayer identification number of each member or client providing property or services in the exchange, the property or services provided, the amount received by the member or client for such property or services, the date on which the exchange occurred and other information required on Form 1099-B. This means that multiple Forms 1099-B may be required for member clients with multiple bartering transactions during the year. To learn more about 1.6045-a(f)(i), Returns of Information of Broker and Barter Exchanges, visit the Electronic Code of Federal Regulations site, click on “Simple Search” and enter 26 in the Title and “Returns of information of brokers and barter exchanges.” in the “Search for” field.
Corporate client or member bartering is reported on the aggregate for the year, rather than on a transactional basis. Under Regulation 1.6045-1(f)(ii), barter exchanges are required to file annual Forms 1099-B including the aggregate or total amount received by a corporate client or member during the year for property or services provided by the corporate client or member in all barter transactions through the barter exchange. Form 1099-B additionally requires the name, address, and taxpayer identification number of the corporate client or member.
Penalty for Not Filing or Filing Incorrect Forms 1099-B
Failure to file Forms 1099-B can result in significant penalties under Internal Revenue Code Section 6721. The penalty is based on when correct information returns are filed. The penalties are:
$15 per information return if filed correctly within 30 days of the specified due date with a maximum penalty of $75,000 per year ($25,000 for small businesses, defined below).
$30 per information return if filed correctly more than 30 days after the due date, but by August 1 with a maximum penalty of $150,000 per year ($50,000 for small businesses).
$50 per information return if filed after August 1, or not filed, with a maximum penalty of $250,000 per year ($100,000 for small businesses).
A minimum of $100 for each unfiled information return for intentional disregard.
How to Determine if Your Business Qualifies as a Small Business for the Lower Maximum Penalties
If your average annual gross receipts were $5 million or less for the three most recent tax years, or for the period you were in business if shorter, before the calendar year in which the information returns were due, then you are a small business qualified for the lower maximum penalties.
Back-up Withholding and the “B” Process
Back-up withholding can apply to most kinds of payments that are reported on Form 1099, including payments by broker/barter exchanges. Barter exchanges are required to issue “B” notices and are subject to performing back-up withholding if barter participants fail to furnish a valid Taxpayer Identification Number (TIN). For more information please refer to the Back-up Withholding “B” Processes page.
How to Get More Help
If you have questions about reporting on Form 1099-B, call the IRS information reporting customer service site toll free at 1-866-455-7438 or 304-263-8700 (not toll free). For TTY/TDD equipment, call 304-267-3367 (not toll free). The hours of operation are Monday through Friday from 8:30 a.m. to 4:30 p.m., Eastern Time.
What are the Tax Requirements for Barter Exchanges?
Barter exchanges, whether Internet based or with a physical location, are required to file Form 1099-B for all transactions unless certain exceptions are met. Barter exchanges are not required to file Form 1099-B for:
- Exchanges through a barter exchange having fewer than 100 transactions during the year
- Exempt foreign persons as defined in Regulations section 1.6045-1(g)(1)
- Exchanges involving property or services with a fair market value of less than $1.00
For calendar year 2008, Copy B of Form 1099-B is due to barter exchange participants by February 2, 2009. Copy A of the form is required to be filed with the IRS by March 2, 2009. If filing electronically, the due date is March 31, 2009. Software that generates a file according to the specifications in Publication 1220, Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically (PDF) must be used by barter exchanges. The IRS does not provide a fill-in form option.
Caution: Paper forms are scanned during processing by the IRS. Forms 1096, 1098, 1099, or 5498 that are printed from IRS.gov will not be accepted.
Non-corporate client or member bartering is reported on a transactional basis on Form 1099-B, but additional information is to be added to the form by the barter exchange. Under Regulation 1.6045-1(f)(i), barter exchanges are required to make a return of information reporting the name, address, and taxpayer identification number of each member or client providing property or services in the exchange, the property or services provided, the amount received by the member or client for such property or services, the date on which the exchange occurred and other information required on Form 1099-B. This means that multiple Forms 1099-B may be required for member clients with multiple bartering transactions during the year. To learn more about 1.6045-a(f)(i), Returns of Information of Broker and Barter Exchanges, visit the Electronic Code of Federal Regulations site, click on “Simple Search” and enter 26 in the Title and “Returns of information of brokers and barter exchanges.” in the “Search for” field.
Corporate client or member bartering is reported on the aggregate for the year, rather than on a transactional basis. Under Regulation 1.6045-1(f)(ii), barter exchanges are required to file annual Forms 1099-B including the aggregate or total amount received by a corporate client or member during the year for property or services provided by the corporate client or member in all barter transactions through the barter exchange. Form 1099-B additionally requires the name, address, and taxpayer identification number of the corporate client or member.
Penalty for Not Filing or Filing Incorrect Forms 1099-B
Failure to file Forms 1099-B can result in significant penalties under Internal Revenue Code Section 6721. The penalty is based on when correct information returns are filed. The penalties are:
- $15 per information return if filed correctly within 30 days of the specified due date with a maximum penalty of $75,000 per year ($25,000 for small businesses, defined below).
- $30 per information return if filed correctly more than 30 days after the due date, but by August 1 with a maximum penalty of $150,000 per year ($50,000 for small businesses).
- $50 per information return if filed after August 1, or not filed, with a maximum penalty of $250,000 per year ($100,000 for small businesses).
- A minimum of $100 for each unfiled information return for intentional disregard.
How to Determine if Your Business Qualifies as a Small Business for the Lower Maximum Penalties
If your average annual gross receipts were $5 million or less for the three most recent tax years, or for the period you were in business if shorter, before the calendar year in which the information returns were due, then you are a small business qualified for the lower maximum penalties.
Back-up Withholding and the “B” Process
Back-up withholding can apply to most kinds of payments that are reported on Form 1099, including payments by broker/barter exchanges. Barter exchanges are required to issue “B” notices and are subject to performing back-up withholding if barter participants fail to furnish a valid Taxpayer Identification Number (TIN). For more information please refer to the Back-up Withholding “B” Processes page.
How to Get More Help
If you have questions about reporting on Form 1099-B, call the IRS information reporting customer service site toll free at 1-866-455-7438 or 304-263-8700 (not toll free). For TTY/TDD equipment, call 304-267-3367 (not toll free). The hours of operation are Monday through Friday from 8:30 a.m. to 4:30 p.m., Eastern Time.
Tags: Barter Exchanges, business tax, business taxes, Exempt foreign persons, Form 1099-B, Form 1099B, income tax, income taxes, Internal Revenue Code, irs, irs gov, Returns of information of brokers and barter exchanges, Tax, Tax Requirements, Tax Requirements for Barter Exchanges, tax years, taxes, Taxpayer Identification Number, What are the Tax Requirements for Barter Exchanges?, www irs gov
Posted in Uncategorized | 4 Comments »
Monday, August 30th, 2010
What are Barter Exchanges?
Bartering is the trading of one product or service for another. Usually there is no exchange of cash. Barter may take place on an informal one-on-one basis between individuals and businesses, or it can take place on a third party basis through a barter exchange company. A barter exchange is any person or organization with members or clients that contract with each other (or with the barter exchange) to jointly trade or barter property or services. The term does not include arrangements that provide solely for the informal exchange of similar services on a noncommercial basis.
Unlike one-on-one bartering, members of exchanges are not obligated to barter or purchase directly from a seller. Instead, when a barter exchange member sells a product or a service to another member, their barter account is credited for the fair market value of the sale. When a barter exchange member buys, the account is debited for the fair market value of the purchase.
Internet-based Barter
The Internet provides a new medium for the barter exchange industry. Pure Internet-based barter companies differ from traditional, organized trade exchanges in that they do not have a physical office. In modern Internet barter exchanges, there is an agreement or process in place to value goods and services exchanged, which is facilitated by the barter exchange for a fee. A barter exchange functions primarily as the organizer of a marketplace where members buy and sell products and services among themselves.
Trade Dollars
Barter exchanges have their own unit of exchange, usually known as barter or trade dollars. Trade dollars or barter dollars are valued in U.S. currency for the purposes of information returns. Trade dollars allow barter to take place between parties when one party may not have a simultaneous need or desire for the goods or services of the other members. Barter exchanges act as the bookkeeper for keeping track of trade dollars that participants accumulate. Earning trade or barter dollars through a barter exchange is considered taxable income, just as if your product or service was sold for cash.
Requirement for Barter Exchanges to File Information Returns
Barter exchanges are required to issue Form 1099-B Proceeds from Broker and Barter Exchange Transactions, annually to their clients or members and to the Internal Revenue Service. Learn more about information return filing requirements for barter exchanges.
What are Barter Exchanges?
Bartering is the trading of one product or service for another. Usually there is no exchange of cash. Barter may take place on an informal one-on-one basis between individuals and businesses, or it can take place on a third party basis through a barter exchange company. A barter exchange is any person or organization with members or clients that contract with each other (or with the barter exchange) to jointly trade or barter property or services. The term does not include arrangements that provide solely for the informal exchange of similar services on a noncommercial basis.
Unlike one-on-one bartering, members of exchanges are not obligated to barter or purchase directly from a seller. Instead, when a barter exchange member sells a product or a service to another member, their barter account is credited for the fair market value of the sale. When a barter exchange member buys, the account is debited for the fair market value of the purchase.
Internet-based Barter
The Internet provides a new medium for the barter exchange industry. Pure Internet-based barter companies differ from traditional, organized trade exchanges in that they do not have a physical office. In modern Internet barter exchanges, there is an agreement or process in place to value goods and services exchanged, which is facilitated by the barter exchange for a fee. A barter exchange functions primarily as the organizer of a marketplace where members buy and sell products and services among themselves.
Trade Dollars
Barter exchanges have their own unit of exchange, usually known as barter or trade dollars. Trade dollars or barter dollars are valued in U.S. currency for the purposes of information returns. Trade dollars allow barter to take place between parties when one party may not have a simultaneous need or desire for the goods or services of the other members. Barter exchanges act as the bookkeeper for keeping track of trade dollars that participants accumulate. Earning trade or barter dollars through a barter exchange is considered taxable income, just as if your product or service was sold for cash.
Requirement for Barter Exchanges to File Information Returns
Barter exchanges are required to issue Form 1099-B Proceeds from Broker and Barter Exchange Transactions, annually to their clients or members and to the Internal Revenue Service. Learn more about information return filing requirements for barter exchanges.
Tags: barter dollars, barter exchange industry, Barter Exchanges, Bartering, bookkeeper, File Information Returns, Form 1099-B, Form 1099-B Proceeds from Broker and Barter Exchange Transactions, income tax, income taxes, Information Returns, internal revenue service, Internet-based Barter, organized trade exchanges, Proceeds from Broker and Barter Exchange Transactions, Tax, taxable income, taxes, Trade Dollars, What are Barter Exchanges?
Posted in Uncategorized | 4 Comments »
Saturday, August 28th, 2010
What is Bartering Income?
Bartering is the trading of one product or service for another. Usually there is no exchange of cash. It is the most ancient form of commerce. Any business owner or professional who has a product or service to offer can barter.
While our ancestors may have exchanged eggs for corn, today you can barter computer services for auto repair. Another example of a one-on-one, non-barter exchange transaction is a plumber doing repair work for a dentist in exchange for dental services. The fair market value of the goods and services exchanged must be reported as income by both parties.
Barter may take place on an informal one-on-one basis between individuals and businesses, or it can take place on a third party basis through a modern barter exchange company.
Tax Responsibilities
Income from bartering is taxable in the year it is performed. The rules for reporting barter transactions may vary depending on which form of bartering takes place. Refer to Tax Responsibilities of Bartering Participants for more information about reporting income and staying in compliance.
Home-Based Online Barter Business
If online bartering turns into a business, or you have recurring barter transactions and are purchasing items to barter with the intention of making a profit, you may have started a barter business.
If Your Bartering is a Trade or Business
If you are operating a viable bartering business, you may be entitled to deduct business expenses. Do you have an established business and are augmenting your sales with barter transactions? If so, include the sales from bartering in your business income.
Bartering Depreciated Business Assets
If you barter business assets or close your business you may have capital gains, ordinary gains and depreciation recapture (explained in chapter 3 of Publication 544) to report.
Bartering Appreciated Assets
Examples of appreciated assets often include art, antiques and collectibles. If you have barter transactions of property where the fair market value is more than your cost or other basis, you usually will have a reportable gain. These gains may be business income or capital gains.
What is Bartering Income?
Bartering is the trading of one product or service for another. Usually there is no exchange of cash. It is the most ancient form of commerce. Any business owner or professional who has a product or service to offer can barter.
While our ancestors may have exchanged eggs for corn, today you can barter computer services for auto repair. Another example of a one-on-one, non-barter exchange transaction is a plumber doing repair work for a dentist in exchange for dental services. The fair market value of the goods and services exchanged must be reported as income by both parties.
Barter may take place on an informal one-on-one basis between individuals and businesses, or it can take place on a third party basis through a modern barter exchange company.
Tax Responsibilities
Income from bartering is taxable in the year it is performed. The rules for reporting barter transactions may vary depending on which form of bartering takes place. Refer to Tax Responsibilities of Bartering Participants for more information about reporting income and staying in compliance.
Home-Based Online Barter Business
If online bartering turns into a business, or you have recurring barter transactions and are purchasing items to barter with the intention of making a profit, you may have started a barter business.
If Your Bartering is a Trade or Business
If you are operating a viable bartering business, you may be entitled to deduct business expenses. Do you have an established business and are augmenting your sales with barter transactions? If so, include the sales from bartering in your business income.
Bartering Depreciated Business Assets
If you barter business assets or close your business you may have capital gains, ordinary gains and depreciation recapture (explained in chapter 3 of Publication 544) to report.
Bartering Appreciated Assets
Examples of appreciated assets often include art, antiques and collectibles. If you have barter transactions of property where the fair market value is more than your cost or other basis, you usually will have a reportable gain. These gains may be business income or capital gains.
Tags: Appreciated Assets, barter business, barter exchange company, Bartering Appreciated Assets, Bartering Depreciated Business Assets, Bartering Income, Bartering is a Trade, Business Assets, business expenses, business income, capital gains, Depreciated Business Assets, depreciation recapture, fair market value, Home-Based Online Barter Business, Home-Based Online Business, Income from bartering, income tax, income taxes, ordinary gains, reportable gain, Tax, Tax Responsibilities, Tax Responsibilities of Bartering Participants, taxable, taxes, What is Bartering Income?
Posted in Uncategorized | 7 Comments »
Saturday, May 22nd, 2010
Statement of IRS Commissioner Doug Shulman on the Filing Deadline for Small Charities
Now that the May 17 filing deadline has passed, it appears that many small tax-exempt organizations have not filed the required information return in time. These organizations are vital to communities across the United States, and I understand their concerns about possibly losing their tax-exempt status.
The IRS has conducted an unprecedented outreach effort in the tax-exempt sector on the 2006 law’s new filing requirements, but many of these smaller organizations are just now learning of the May 17 deadline. I want to reassure these small organizations that the IRS will do what it can to help them avoid losing their tax-exempt status.
The IRS will be providing additional guidance in the near future on how it will help these organizations maintain their important tax-exempt status — even if they missed the May 17 deadline. The guidance will offer relief to these small organizations and provide them with the opportunity to keep their critical tax-exempt status intact.
So I urge these organizations to go ahead and file — even though the May 17 deadline has passed.
Filing a tax return for the small organizations is easier than you’d think. It just takes a few minutes to fill out the electronic notice Form 990-N (e-Postcard). This is available for small tax-exempt organizations with annual receipts of $25,000 or less.
Statement of IRS Commissioner Doug Shulman on the Filing Deadline for Small Charities
Now that the May 17 filing deadline has passed, it appears that many small tax-exempt organizations have not filed the required information return in time. These organizations are vital to communities across the United States, and I understand their concerns about possibly losing their tax-exempt status.
The IRS has conducted an unprecedented outreach effort in the tax-exempt sector on the 2006 law’s new filing requirements, but many of these smaller organizations are just now learning of the May 17 deadline. I want to reassure these small organizations that the IRS will do what it can to help them avoid losing their tax-exempt status.
The IRS will be providing additional guidance in the near future on how it will help these organizations maintain their important tax-exempt status — even if they missed the May 17 deadline. The guidance will offer relief to these small organizations and provide them with the opportunity to keep their critical tax-exempt status intact.
So I urge these organizations to go ahead and file — even though the May 17 deadline has passed.
Filing a tax return for the small organizations is easier than you’d think. It just takes a few minutes to fill out the electronic notice Form 990-N (e-Postcard). This is available for small tax-exempt organizations with annual receipts of $25,000 or less.
Tags: Filing a tax return, Filing Deadline for Small Charities, Form 990-N, Form 990-N (e-Postcard), income tax, income tax preparation, income taxes, IRS Commissioner Doug Shulman, May 17 deadline, small tax-exempt organizations, Statement of IRS Commissioner Doug Shulman on the Filing Deadline for Small Charities, Tax, tax exempt status, tax preparation, taxes
Posted in Uncategorized | 1 Comment »
Wednesday, May 12th, 2010
Investment Credit
Generally, the energy credit from the following properties was scheduled to expire after 2008 but has been extended through 2016.
Qualified fuel cell property.
Qualified microturbine property.
Solar energy property.
For tax years beginning after October 3, 2008, the energy credit can offset the alternative minimum tax.
For periods after February 17, 2009, the investment credit includes the qualifying advanced energy project credit.
For periods after 2008, the $4,000 limit on the energy credit for qualified small wind energy is repealed.
You may elect to treat qualified property placed in service as part of a qualified investment credit facility after 2008 as energy property for purposes of the energy credit instead of takingthe renewable electricity production credit.
Investment Credit
Generally, the energy credit from the following properties was scheduled to expire after 2008 but has been extended through 2016.
Qualified fuel cell property.
Qualified microturbine property.
Solar energy property.
For tax years beginning after October 3, 2008, the energy credit can offset the alternative minimum tax.
For periods after February 17, 2009, the investment credit includes the qualifying advanced energy project credit.
For periods after 2008, the $4,000 limit on the energy credit for qualified small wind energy is repealed.
You may elect to treat qualified property placed in service as part of a qualified investment credit facility after 2008 as energy property for purposes of the energy credit instead of taking the renewable electricity production credit.
Tags: advanced energy project credit, alternative minimum tax, business tax, business taxes, credit for qualified small wind energy, energy credit, energy project credit, income tax, income tax preparation, income taxes, Investment Credit, Qualified fuel cell property, Qualified microturbine property, qualified small wind energy, qualifying advanced energy project credit, renewable electricity production credit, small business tax, small wind energy, Solar energy property, Tax, tax preparation, taxes
Posted in Uncategorized | 1 Comment »
Tuesday, May 11th, 2010
Qualified Transportation Fringe Benefits – Bicycle Commuting Reimbursement
2009 Changes
After 2008, qualified transportation fringe benefits include any qualified bicycle commuting reimbursement.
Qualified bicycle commuting reimbursement. For any calendar year, the exclusion for qualified bicycle commuting reimbursement includes any employer reimbursement during the 15-month period beginning with the first day of the calendar year for reasonable expenses incurred by the employee during the calendar year.
Reasonable expenses include the purchase of a bicycle and bicycle improvements, repair, and storage. These are considered reasonable expenses as long as the bicycle is regularly used for travel between the employee’s residence and place of employment.
Exclusion from wages. Generally, the value of transportation benefits that you provide to an employee during 2009 are excluded from the employee’s wages up to the following limits.
For combined commuter highway vehicle transportation and transit passes:
$120 per month for the months of January and February 2009, and
$230 per month for any month beginning after February 2009.
$230 per month for qualified parking.
For a calendar year, $20 multiplied by the number of qualified bicycle commuting months during that year for qualified bicycle commuting reimbursement.
Qualified bicycle commuting month. For any employee, a qualified bicycle commuting month is any month the employee regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment and does not receive transportation in a commuter highway vehicle, any transit pass, or qualified parking benefits.
Generally, qualified transportation fringe benefits are excluded from an employee’s wages even if you provide them under a compensation reduction agreement. However, qualified bicycle commuting reimbursements do not qualify for this exclusion if made under a compensation reduction agreement.
Qualified Transportation Fringe Benefits – Bicycle Commuting Reimbursement
2009 Changes
After 2008, qualified transportation fringe benefits include any qualified bicycle commuting reimbursement.
Qualified bicycle commuting reimbursement. For any calendar year, the exclusion for qualified bicycle commuting reimbursement includes any employer reimbursement during the 15-month period beginning with the first day of the calendar year for reasonable expenses incurred by the employee during the calendar year.
Reasonable expenses include the purchase of a bicycle and bicycle improvements, repair, and storage. These are considered reasonable expenses as long as the bicycle is regularly used for travel between the employee’s residence and place of employment.
Exclusion from wages. Generally, the value of transportation benefits that you provide to an employee during 2009 are excluded from the employee’s wages up to the following limits.
- For combined commuter highway vehicle transportation and transit passes:
- $120 per month for the months of January and February 2009, and
- $230 per month for any month beginning after February 2009.
- $230 per month for qualified parking.
- For a calendar year, $20 multiplied by the number of qualified bicycle commuting months during that year for qualified bicycle commuting reimbursement.
Qualified bicycle commuting month. For any employee, a qualified bicycle commuting month is any month the employee regularly uses the bicycle for a substantial portion of the travel between the employee’s residence and place of employment and does not receive transportation in a commuter highway vehicle, any transit pass, or qualified parking benefits.
Generally, qualified transportation fringe benefits are excluded from an employee’s wages even if you provide them under a compensation reduction agreement. However, qualified bicycle commuting reimbursements do not qualify for this exclusion if made under a compensation reduction agreement.
Tags: Bicycle Commuting Reimbursement, business tax, business tax preparation, commuter highway vehicle, compensation reduction agreement, employer reimbursement, income tax, income tax preparation, income taxes, qualified bicycle commuting months, qualified bicycle commuting reimbursement, qualified parking benefits, Qualified Transportation Fringe Benefits, Qualified Transportation Fringe Benefits - Bicycle Commuting Reimbursement, small business tax, small business tax preparation, Tax, tax preparation, taxes, transit pass
Posted in Uncategorized | 1 Comment »
Monday, May 10th, 2010
Many Tax-Exempt Organizations Must File Form 990 by May 17 Deadline to Preserve Tax-Exempt Status with IRS
Audio File for Podcast: Don’t Throw Away Your Tax Exempt Status
IR-2010-59, May 7, 2010
WASHINGTON — A crucial filing deadline of May 17 is looming for many tax-exempt organizations that are required by law to file their Form 990 with the Internal Revenue Service or risk having their federal tax-exempt status revoked.
The Pension Protection Act of 2006 mandates that all non-profit organizations, other than churches and church related organizations, must file an information form with the IRS. This requirement has been in effect since the beginning of 2007, which made 2009 the third consecutive year under the new law. Any organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.
Form 990-series information returns are due on the 15th day of the fifth month after an organization’s fiscal year ends. Many organizations use the calendar year as their fiscal year, which makes May 15 the deadline for those tax-exempt organizations. May 15 falls on a Saturday this year so the deadline this year is actually Monday, May 17. Organizations can request an extension of their filing date by filing Form 8868 by the original due date. Absent a request for extension, there is no grace period from filing by the original due date.
Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N (e-Postcard). This asks for a few basic pieces of information. Tax-exempts with annual receipts above $25,000 must file a Form 990 or 990-EZ, depending on their annual receipts. Private foundations file form 990-PF.
Any tax-exempt organization that has not filed the required form in the last three years automatically will lose its tax exempt status effective as of the due date of the annual filing. Under the law, the IRS does not have discretion in this matter.
A list of revoked organizations will be available to the public on IRS.gov.
If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.
Many Tax-Exempt Organizations Must File Form 990 by May 17 Deadline to Preserve Tax-Exempt Status with IRS
Audio File for Podcast: Don’t Throw Away Your Tax Exempt Status
IR-2010-59, May 7, 2010
WASHINGTON — A crucial filing deadline of May 17 is looming for many tax-exempt organizations that are required by law to file their Form 990 with the Internal Revenue Service or risk having their federal tax-exempt status revoked.
The Pension Protection Act of 2006 mandates that all non-profit organizations, other than churches and church related organizations, must file an information form with the IRS. This requirement has been in effect since the beginning of 2007, which made 2009 the third consecutive year under the new law. Any organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.
Form 990-series information returns are due on the 15th day of the fifth month after an organization’s fiscal year ends. Many organizations use the calendar year as their fiscal year, which makes May 15 the deadline for those tax-exempt organizations. May 15 falls on a Saturday this year so the deadline this year is actually Monday, May 17. Organizations can request an extension of their filing date by filing Form 8868 by the original due date. Absent a request for extension, there is no grace period from filing by the original due date.
Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N (e-Postcard). This asks for a few basic pieces of information. Tax-exempts with annual receipts above $25,000 must file a Form 990 or 990-EZ, depending on their annual receipts. Private foundations file form 990-PF.
Any tax-exempt organization that has not filed the required form in the last three years automatically will lose its tax exempt status effective as of the due date of the annual filing. Under the law, the IRS does not have discretion in this matter.
A list of revoked organizations will be available to the public on IRS.gov.
If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status. Any income received between the revocation date and renewed exemption may be taxable.
Tags: 990-EZ, business tax, business tax return preparation, electronic notice Form 990-N, federal tax exempt status, Form 8868, form 990, Form 990 or 990-EZ, Form 990-N, form 990-PF, Form 990-series, Form 990-series information, Form 990-series information returns, income tax, income tax preparation, income taxes, irs gov, Many Tax-Exempt Organizations Must File Form 990 by May 17 Deadline to Preserve Tax-Exempt Status with IRS, non-profit organizations, Pension Protection Act of 2006, small business tax, small business tax preparation, small tax-exempt organizations, Tax, tax exempt, tax exempt organizations, tax exempt status, tax preparation, taxes, The Pension Protection Act of 2006
Posted in Uncategorized | 1 Comment »
Monday, May 3rd, 2010
Small Business Health Care Tax Credit
The Small Business Health Care Tax Credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees.
Eligibility Rules
Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
Average annual wage. A qualifying employer must pay average annual wages below $50,000.
Both taxable (for profit) and tax-exempt firms qualify.
Amount of Credit
Maximum Amount. The credit is worth up to 35 percent of a small business’ premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
Small Business Health Care Tax Credit
The Small Business Health Care Tax Credit helps small businesses and small tax-exempt organizations afford the cost of covering their employees.
Eligibility Rules
- Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
- Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
- Average annual wage. A qualifying employer must pay average annual wages below $50,000.
- Both taxable (for profit) and tax-exempt firms qualify.
Amount of Credit
- Maximum Amount. The credit is worth up to 35 percent of a small business’ premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
- Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
Tags: business tax, business tax preparation, health care coverage, income tax, income tax preparation, income taxes, Small Business Health Care Tax Credit, small business tax, small business tax planning, small business tax preparation, small tax-exempt organizations, Tax, tax preparation, taxes
Posted in Uncategorized | 2 Comments »
Sunday, May 2nd, 2010
Work Opportunity Credit – Unemployed veterans – Disconnected youth
Two new targeted groups have been added to the work opportunity credit:
Unemployed veterans, and
Disconnected youth.
An unemployed veteran is a veteran hired after 2008 and before 2011 who:
Has been discharged or released from active duty in the U.S. Armed Forces at
any time during the 5-year period ending on the hiring date, and
Received unemployment compensation under state or federal law for at least 4
weeks during the 1-year period ending on the hiring date.
A disconnected youth is an individual hired after 2008 and before 2011 who:
Is at least age 16 but not yet age 25 on the hiring date;
During the past 6 months, has not attended or has not regularly attended any
secondary, technical, or post-secondary school for more than an average of 10
hours per week, not counting periods during which the school was closed for
scheduled vacation;
During each consecutive 3-month period within the past 6 months, was not
employed or was employed and earned an amount less than he or she would
have earned working for the applicable minimum wage 30 hours every week
during the 3-month period; and
Does not have a certificate of graduation from a secondary school or a General
Education Development (GED) certificate or has a certificate that was awarded
at least 6 months ago and he or she has not held a job (other than occasionally)
or been admitted to a technical or post-secondary school since receiving the
certificate.
Work Opportunity Credit – Unemployed veterans – Disconnected youth
Two new targeted groups have been added to the work opportunity credit:
- Unemployed veterans, and
- Disconnected youth.
An unemployed veteran is a veteran hired after 2008 and before 2011 who:
- Has been discharged or released from active duty in the U.S. Armed Forces at any time during the 5-year period ending on the hiring date, and
- Received unemployment compensation under state or federal law for at least 4 weeks during the 1-year period ending on the hiring date.
A disconnected youth is an individual hired after 2008 and before 2011 who:
- Is at least age 16 but not yet age 25 on the hiring date;
- During the past 6 months, has not attended or has not regularly attended any secondary, technical, or post-secondary school for more than an average of 10 hours per week, not counting periods during which the school was closed for scheduled vacation;
- During each consecutive 3-month period within the past 6 months, was not employed or was employed and earned an amount less than he or she would have earned working for the applicable minimum wage 30 hours every week during the 3-month period; and
- Does not have a certificate of graduation from a secondary school or a General Education Development (GED) certificate or has a certificate that was awarded at least 6 months ago and he or she has not held a job (other than occasionally) or been admitted to a technical or post-secondary school since receiving the certificate.
Tags: business tax, certificate of graduation, Disconnected youth, General Education Development (GED), income tax, income tax preparer, income taxes, released from active duty, small business tax, Tax, tax preparer, taxes, U.S. Armed Forces, Unemployed veterans, unemployment compensation, Work Opportunity Credit, Work Opportunity Credit - Unemployed veterans - Disconnected youth
Posted in Uncategorized | 2 Comments »
|
|
