Post on 22-Dec-2015
FUN WITH TAXES &TAX EXEMPT STATUS FOR YOUR CLUB GFWC Ohio Federation of Women’s Clubs
Annual State Convention April 25, 2015
What is a deductible as a Charitable Contribution
• Cash donations to a Qualified organization
• www.irs.gov/Charities-&-Non-Profits/Search-for-Charities
• Non-Cash donations to a Qualified organization (Valuation Guide)
• Mileage at .14¢ per mile for 2015
(must pass the “basic test”)
THE “BASIC TEST”
To deduct amounts that you pay in giving service to a Qualified Organization:
Unreimbursed and
1. Directly connected with the services that you give and
2. Incurred only because of the service that you give and
3. Not considered personal, living or family expenses
Your time is almost never considered a charitable tax deduction
KEEP GOOD RECORDS
Write a check to the Qualified Charity whenever possible
Must have a written letter from the Charity for donations of $250.00 or more
Keep a log of your mileage when using your car for charitable purposes
Eight Tips for Deducting Charitable Contributions
1. Contribution Must be to a Qualified Organization
2. Must file Form 1040 and itemize your deductions on Schedule A
3. Deduct only excess of FMV of the benefit you receive
4. Non cash contributions are valued at FMV (Thrift- Shop Value)
5. FMV is the price property would change hands for between a buyer & seller
6. You must maintain a record of your contribution
7. Contributions over $250 must have written substantiation from the Charity
8. Donations over $5,000 must be appraised
Nonprofit vs Tax-Exempt• Nonprofit status is a state law concept
• Nonprofit status may make an organization eligible for certain benefits such as state sales tax, property and income tax exemptions
• Most tax-exempt organizations are nonprofits
• Organizing as a nonprofit at the State level does not exempt the organization from federal tax or allow contributions to that organization to be tax deductible
• Must meet requirements set forth in the Internal Revenue Code to become a tax-exempt organization
How to become a 501(c)(3) Charity
How to become a 501(c)(3) Charity
1. Apply for a Federal Identification Number
Complete Form SS-4 on-line at www.irs.gov
2. Complete Form 1023 or 1023-EZ
Application for Recognition of Exemption
3. Submit a User Fee with your application
Federal Identification Number• Be sure your organization is formed legally before you apply for an EIN
• Your organization can be formed as a:
Corporation
Limited Liability Company
Unincorporated Association or a
Trust
These are done with the Ohio Secretary of State www.sos.oh.us
“Your guide to Starting a Nonprofit in Ohio”
Required Provisions in Your Organizing Document
• Must state your exempt purpose(s)
For example charitable, religious, educational, and/or scientific purposes
• Must state that upon dissolution of your organization, your remaining assets
must be used exclusively for the exempt purpose of your club
FORM 1023 or FORM 1023-EZ
New Form 1023-EZ has recently been created for Organizations with
• $250,000 or less in Assets and
• Annual gross receipts of $50,000 or less
Download these forms at www.irs.gov
FORM 1023-EZ CONTINUED
• File this form on-line
• First complete a eligibility worksheet
• Register for an account on Pay.gov
• Enter 1023-EZ in the search box
• Complete the Form
User fee with this application will be $400
FORM 1023
• Download the Form at www.irs.gov
• Complete the Form
On-line free mini course that you can take on “Applying for Tax Exemption”
www.irs.gov/charities-&-Non-Profits/Applying-for-Exemption-Additional- Information
User fee with the application will be $850
FILING REQUIREMENTS AFTER BECOMING A 501 (c)(3)
• Form 990
Annual gross receipts greater or equal to $200,000 or
Total assets greater than or equal to $500,000
• Form 990-EZ
Annual gross receipts less than $200,000 and
Total assets less than $500,000
• Form 990-N e-Postcard
Annual gross receipts are normally $50,000 or less
AFTER YOU BECOME A 501 (c)(3)
IRS Publication 1771 – Charitable Contributions – Substantiation and
Disclosure Requirements
Recordkeeping Rules
• Bank Record (canceled check) or
• Written communication from the charity
Name of Charity
Date of Contribution
Amount of the Contribution
Written AcknowledgmentRequired for any single contribution of $250 or more
Donor’s responsibility to obtain the written acknowledgment but the Charity can help by providing the following information:
• Name of Organization
• Amount of Cash Contribution
• Description (but not the value) of non-cash contribution
• Statement that “no goods or services were provided by the organization in return for the contribution”, if that was the case
Written Acknowledgment Continued
• Description and good faith estimate of the value of goods or services, if any that an organization provided in return for the contribution
• Statement that goods or services, if any, that an organization provided in return for the contribution consisted entirely of intangible religious benefits, if that were the case
THE GFWC BRAND
The GFWC Brand is our Image to the Public
The collective GFWC identity conveys an image of friendship and Volunteer Service to our Communities
Use GFWC before your Club Name in all Communications
THE GFWC BRAND
• No need to legally change your club name to do this
• Use dba (doing business as) as an easy way to promote GFWC