Ten Things Tax-Exempt Organizations Need to Know About the Oct. 15 Due Date A crucial filing deadline of Oct. 15 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. Nonprofit organizations that are at risk can preserve their status by filing returns by Oct. 15, 2010, under a one-time relief program.
The Pension Protection Act of 2006 mandates that most tax-exempt organizations must file an annual return or submit an electronic notice, with the IRS and it also requires that any tax-exempt organization that fails to file for three consecutive years automatically loses its federal tax-exempt status.
Here are 10 facts to help nonprofit organizations maintain their tax-exempt status.
Small nonprofit organizations at risk of losing their tax-exempt status because they failed to file required returns for 2007, 2008 and 2009 can preserve their status by filing returns by Oct. 15, 2010.
Among the organizations that could lose their tax-exempt status are local sports associations and community support groups, volunteer fire and ambulance associations and their auxiliaries, social clubs, educational societies, veterans groups, church-affiliated groups, groups designed to assist those with special needs and a variety of others.
A list of the organizations that were at-risk as of the end of July is posted at IRS.gov along with instructions on how to comply with the new law.
Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice and a voluntary compliance program for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.
Small tax-exempt organizations with annual receipts of $25,000 or less can file an electronic notice Form 990-N also known as the e-Postcard. To file the e-Postcard go to the IRS website and supply the eight information items called for on the form.
Under the voluntary compliance program, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee.
The relief is not available to larger organizations required to file the Form 990 or to private foundations that file the Form 990-PF.
Organizations that have not filed the required information return by the extended Oct. 15 due date will have their tax-exempt status revoked.
If an organization loses its exemption, it will have to reapply with the IRS to regain its tax-exempt status and any income received between the revocation date and renewed exemption may be taxable.
Donors who contribute to at-risk organizations are protected until the final revocation list is published by the IRS.
Finally,IRS Provides Relief for Homeowners with Corrosive Drywall
The Internal Revenue Service today issued guidance providing relief to homeowners who have suffered property losses due to the effects of certain imported drywall installed in homes between 2001 and 2009.
Revenue Procedure 2010-36 enables affected taxpayers to treat damages from corrosive drywall as a casualty loss and provides a ”safe harbor” formula for determining the amount of the loss.
In numerous instances, homeowners with certain imported drywall have reported blackening or corrosion of copper electrical wiring and copper components of household appliances, as well as the presence of sulfur gas odors. In November 2009, the Consumer Product Safety Commission (CPSC) reported that an indoor air study of a sample of 51 homes found a strong association between the problem drywall, levels of hydrogen sulfide in those homes and corrosion of metals in those homes.
Revenue Procedure 2010-36 provides the following relief:
Individuals who pay to repair damage to their personal residences or household appliances resulting from corrosive drywall may treat the amount paid as a casualty loss in the year of payment.
Taxpayers who have already filed their income tax return for the year of payment generally have three years to file an amended return and claim the deduction.The amount of a loss that may be claimed depends on whether the taxpayer has a pending claim for reimbursement (or intends to pursue reimbursement) of the loss through property insurance, litigation or otherwise.
In cases where a taxpayer does not have a pending claim for reimbursement, the taxpayer may claim as a loss all unreimbursed amounts paid during the taxable year to repair damage to the taxpayer’s personal residence and household appliances resulting from corrosive drywall.
If a taxpayer does have a pending claim (or intends to pursue reimbursement), a taxpayer may claim a loss for 75 percent of the unreimbursed amount paid during the taxable year to repair damage to the taxpayer’s personal residence and household appliances that resulted from corrosive drywall.
A taxpayer who has been fully reimbursed before filing a return for the year the loss was sustained may not claim a loss. A taxpayer who has a pending claim for reimbursement (or intends to pursue reimbursement) may have income or an additional deduction in subsequent taxable years depending on the actual amount of reimbursement received.
For purposes of this revenue procedure, the term “corrosive drywall” means drywall that is identified as problem drywall under the two step identification method published by the CPSC and the Department of Housing and Urban Development in their interim guidance dated January 28, 2010.
The IRS Employment Taxes – How it all works – What you need to know
Fresh Start Tax is asked over and over about the requirements for business start up, hope this helps. Question: We are about to hire employees and need to know how much tax to take out and where to send this money.
You will need to secure a completed Form W-4 (PDF), Employee’s Withholding Allowance Certificate, from each employee.
This is a helpful, Publication 15, Circular E, Employer’s Tax Guide, and Publication 15-A (PDF), Employer’s Supplemental Tax Guide, to determine the amount of withholding and for directions on depositing the withholding amounts and other employment taxes. This is the most helpful guide. Generally, employers are required to quarterly file Form 941 (PDF), Employer’s Quarterly Federal Tax Return, and annually file Form 940 (PDF), Employer’s Annual Federal Unemployment Tax Return (FUTA), and Form W-2 (PDF), Wage and Tax Statement, with Form W-3 (PDF), Transmittal of Wage and Tax Statements. Some small employers (those whose annual liability for social security, Medicare, and withheld Federal income taxes is $1,000 or less) may file Form 944-SS (PDF), Employer’s Annual Federal Tax Return, instead of Form 941, if the IRS has notified them to Form 944 instead of Form 941. New employers are also eligible to file Form 944, if they will meet the eligibility requirements. New employers filing Form SS-4 Form SS-4(PDF), Application for Employer Identification Number, must check the “Yes” box or “No” box on line 14 to indicate whether they expect to have $1,000 or less in employment tax liability for the calendar year.
The Employment Tax e-file System offers an improved way to file Forms 940,941, and 944 electronically. Prospective participants must first complete and submit an IRS e-file application. You can complete the IRS e-file application online after registering for e-services. You should contact a local professional to help you through the process.
Fresh Start Tax is one of the premier tax resolution firms in the country. We deal with all types of cases, individuals, business and high dollar corporate entities. We have a staff that specializes in every type of case. Some of our specialties include the following:
Immediate Tax Resolution and Representation
Offers in Compromise and Settlement
Back Taxes/ Unfiled or Never filed tax returns
Bank or Wage Levy Garnishments
Letters of Intent of Notice to Levy
IRS Tax Audits
Hardship, part pay agreements
State Sales Tax problems and Resolution
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Our staff has over 140 years of professional tax representation experience
On staff are Board Certified Tax Attorney’s, CPA’s, former IRS Agents, Managers and Instructors
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We have the highest rating by the Better business Bureau
IRS Deadline Dates coming up for, 1040’s and Non-Profits
Oct. 15 Deadlines: Due Dates for Extension Filers, Non-Profits Approach From the IRS NEWSWIRE
Oct. 15 is fast approaching and is a key deadline for millions of individual taxpayers who requested an extension to file their 2009 tax returns.
It is also a crucial due date for thousands of small nonprofit organizations at risk of losing their tax-exempt status because they have not filed the required forms in the last three years.
“The Oct. 15 deadline is particularly important this year because it’s the last chance for many small charities to comply with the law under the one-time relief program the IRS announced in July,” said IRS Commissioner Doug Shulman. “And as always, it’s an important deadline for taxpayers who took an extension to file their returns.”
Don’t Miss Your 1040 Deadline
The IRS expects to receive as many as 10 million tax returns from taxpayers who used Form 4868 to request a six-month extension to file their returns. Some taxpayers can wait until after Oct. 15 to file, including those serving in Iraq, Afghanistan or other combat zone localities and people affected by recent natural disasters.
The IRS encourages taxpayers to e-file. E-file with direct deposit results in a faster refund than by using a paper return.
Electronic returns also have fewer errors than paper returns. Oct. 15 is the last day to take advantage of e-file and the Free File program.
Free File is a fast, easy and free way to prepare and e-file federal taxes online.
The Free File program provides free federal income tax preparation and electronic filing for eligible taxpayers through a partnership between the IRS and the Free File Alliance LLC, a group of private sector tax software companies.
File If You Are Tax Exempt
Small nonprofit organizations at risk of losing their tax-exempt status because they failed to file the required returns for 2007, 2008 and 2009 can preserve their status by filing returns by Oct. 15 under the one-time relief program.
The IRS has posted on a special page of IRS.gov the names and last-known addresses of these at-risk organizations, along with guidance about how to come back into compliance. The organizations on the list have return due dates between May 17 and Oct. 15, 2010, but the IRS has no record that they filed the required returns for any of the past three years.
Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard) , and a voluntary compliance program (VCP) for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.
Small organizations required to file Form 990-N simply need to go to the IRS website, supply the eight information items called for on the form, and electronically file it by Oct. 15. That will bring them back into compliance.
Under the VCP, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee.
Details about the VCP are on the IRS website, along with frequently asked questions.
Check Your Withholding
With little more than three months remaining in the calendar year, individual taxpayers are encouraged to double check their federal withholding now to make sure they are having enough taxes taken out of their pay.
“Now is a good time to make sure your employer is withholding the proper amount,” Shulman said. If you face a shortfall in your federal withholding, there is still time left in the year to make up the difference.”
The average refund for 2009 was $2,887, up 8 percent from 2008. Even though the Making Work Pay Tax Credit lowered tax withholding rates in 2009 and 2010 for millions of American households, some workers and retirees still need to take steps to be sure enough tax is being taken out of their checks.
Those who should pay particular attention to their withholding include:
a. Married couples with two incomes
b. Individuals with multiple jobs
c. Dependents
d. Some Social Security recipients who work and
e. Workers who do not have valid Social Security numbers.
f. Retirees who receive pension payments may also need to check their federal withholding.
As was the case in 2009, taxpayers who wind up owing tax because too little was taken out of their paychecks during 2010, may qualify for special relief on a penalty that sometimes applies. Depending on their personal situation, some people could have less withheld from their paychecks than they need or want.
Failure to adjust withholding could result in potentially smaller refunds or in limited instances may cause a taxpayer to owe tax rather than receive a refund next year.
The IRS withholding calculator on IRS.gov can help a taxpayer compute the proper tax withholding.
Worksheets in Publication 919, How Do I Adjust My Withholding?, can also be used to do the calculation. If the result suggests an adjustment is necessary, the taxpayer should submit a new Form W-4, Withholding Allowance Certificate, to his or her employer, or adjust the amount of quarterly tax paid.
IRS Deadline Dates coming up for, 1040’s and Non-Profits
Oct. 15 Deadlines: Due Dates for Extension Filers, Non-Profits Approach From the IRS NEWSWIRE Oct. 15 is fast approaching and is a key deadline for millions of individual taxpayers who requested an extension to file their 2009 tax returns. It is also a crucial due date for thousands of small nonprofit organizations at risk of losing their tax-exempt status because they have not filed the required forms in the last three years.
“The Oct. 15 deadline is particularly important this year because it’s the last chance for many small charities to comply with the law under the one-time relief program the IRS announced in July,” said IRS Commissioner Doug Shulman. “And as always, it’s an important deadline for taxpayers who took an extension to file their returns.”
Don’t Miss Your 1040 Deadline
The IRS expects to receive as many as 10 million tax returns from taxpayers who used Form 4868 to request a six-month extension to file their returns. Some taxpayers can wait until after Oct. 15 to file, including those serving in Iraq, Afghanistan or other combat zone localities and people affected by recent natural disasters.
The IRS encourages taxpayers to e-file. E-file with direct deposit results in a faster refund than by using a paper return.
Electronic returns also have fewer errors than paper returns. Oct. 15 is the last day to take advantage of e-file and the Free File program.
Free File is a fast, easy and free way to prepare and e-file federal taxes online.
The Free File program provides free federal income tax preparation and electronic filing for eligible taxpayers through a partnership between the IRS and the Free File Alliance LLC, a group of private sector tax software companies.
File If You Are Tax Exempt
Small nonprofit organizations at risk of losing their tax-exempt status because they failed to file the required returns for 2007, 2008 and 2009 can preserve their status by filing returns by Oct. 15 under the one-time relief program.
The IRS has posted on a special page of IRS.gov the names and last-known addresses of these at-risk organizations, along with guidance about how to come back into compliance. The organizations on the list have return due dates between May 17 and Oct. 15, 2010, but the IRS has no record that they filed the required returns for any of the past three years.
Two types of relief are available for small exempt organizations — a filing extension for the smallest organizations required to file Form 990-N, Electronic Notice (e-Postcard) , and a voluntary compliance program (VCP) for small organizations eligible to file Form 990-EZ, Short Form Return of Organization Exempt From Income Tax.
Small organizations required to file Form 990-N simply need to go to the IRS website, supply the eight information items called for on the form, and electronically file it by Oct. 15. That will bring them back into compliance.
Under the VCP, tax-exempt organizations eligible to file Form 990-EZ must file their delinquent annual information returns by Oct. 15 and pay a compliance fee.
Details about the VCP are on the IRS website, along with frequently asked questions.
Check Your Withholding
With little more than three months remaining in the calendar year, individual taxpayers are encouraged to double check their federal withholding now to make sure they are having enough taxes taken out of their pay.
“Now is a good time to make sure your employer is withholding the proper amount,” Shulman said. If you face a shortfall in your federal withholding, there is still time left in the year to make up the difference.”
The average refund for 2009 was $2,887, up 8 percent from 2008. Even though the Making Work Pay Tax Credit lowered tax withholding rates in 2009 and 2010 for millions of American households, some workers and retirees still need to take steps to be sure enough tax is being taken out of their checks.
Those who should pay particular attention to their withholding include:
a. Married couples with two incomes
b. Individuals with multiple jobs
c. Dependents
d. Some Social Security recipients who work and
e. Workers who do not have valid Social Security numbers.
f. Retirees who receive pension payments may also need to check their federal withholding.
As was the case in 2009, taxpayers who wind up owing tax because too little was taken out of their paychecks during 2010, may qualify for special relief on a penalty that sometimes applies. Depending on their personal situation, some people could have less withheld from their paychecks than they need or want.
Failure to adjust withholding could result in potentially smaller refunds or in limited instances may cause a taxpayer to owe tax rather than receive a refund next year.
The IRS withholding calculator on IRS.gov can help a taxpayer compute the proper tax withholding.
Worksheets in Publication 919, How Do I Adjust My Withholding?, can also be used to do the calculation. If the result suggests an adjustment is necessary, the taxpayer should submit a new Form W-4, Withholding Allowance Certificate, to his or her employer, or adjust the amount of quarterly tax paid.
