2013 TAX ORGANIZER

TAX ORGANIZER

Plenty of tax professionals obtain the highly respected enrolled agent designation to help organizations that are actually exempt from owing income tax. There are a large number of prospective clients among tax-exempt entities. That’s because the IRS requires annual returns from most of these organizations despite their tax exemption.

In fact, the IRS began in 2008 to require small tax-exempt organizations to file an annual electronic notice. These entities were previously exempt from filing requirements because their gross receipts did not exceed a certain threshold.

Larger tax-exempt organizations are required to file an annual Form 990 return. Organizations with gross receipts of less than $ 200,000 and total assets of less than $ 500,000 are eligible to use Form 990-EZ. When gross receipts are normally $ 50,000 or less, Form 990-N is applicable. By concentrating your enrolled agent CPE on these tax returns, you can distinguish your practice as a service for tax-exempt entities.

Organizations usually obtain tax-exempt status under section 501(c)(3) of the tax code. They are eligible to receive contributions from the public that are tax-deductions of the donors. However, these organizations have ongoing compliance obligations. Knowledge of these requirements is one of the subjects in your enrolled agent course of study.

For example, a section 501(c)(3) organization faces restrictions in its political and legislative lobbying activities.

An important use of your enrolled agent ethics course is avoiding underreporting of taxable income. One such situation is identifying cases of taxable unrelated business income for a tax-exempt organization. These activities require filing of an unrelated business income tax return.

In order for an entity to obtain tax exemption under section 501(c)(3), it must be organized and operated for a social charitable purpose. The exempt purpose may involve only benefits to a small community. Such organizations therefore exist in most cities and they value the services of a local professional who has passed the enrolled agent exam.

You can even help organizers create a section 501(c)(3) entity. After forming a corporation, the parties use Form 1023 to apply for tax-exempt status. The organization must then operate for its stated public purpose and avoid benefiting private interests. If any of the earnings personally benefit an individual inside the organization, an excise tax can be imposed on the transaction. Of course, even a tax-exempt organization needs a tax ID number. It is also liable for employment taxes related to its employees.

Organizations usually must apply to the IRS for tax-exempt status within 27 months of formation. Plenty of entities are serving a social purpose by generating business income rather than receiving donations. This is permissible as long as the only benefit to organizers is reasonable personal salaries. As more entrepreneurs are utilizing this process, there is an expanding need for enrolled agents to contribute their expertise.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

 

Duluth, Georgia (PRWEB) August 23, 2013

Its never good news when the federal wage and hour division investigator turns up at a business after a worker complains. Owners can wind up mired in red tape and on the hook for thousands of dollars in fines, even if they’re doing their best to follow the regulations. For instance, according to a press release on the DOL’s website published August 20, 2013, a company in Orlando, Florida was “found in violation of the Fair Labor Standards Acts overtime and record-keeping provisions.” This company agreed to pay nearly $ 125,000 in back wages for these violations.

These investigations increase every year. In one year alone, the Labor Department launched 32,000 actions against employers, forcing businesses to disgorge more than $ 170 million in back wages. The Fair Labor Standards Act, or FLSA, is what the Labor Department is enforcing. It sets national standards for minimum wages, overtime pay, recordkeeping, and child labor. Small businesses need to pay attention to the guidelines just as much as larger ones do.

Everyone sees the headlines about fines in the millions for large companies, but small companies also can face stiff fines that could conceivably hurt them even more than a larger company, said Will Beesley, VP of HR Strategies, based in Duluth, Georgia.

HR Strategies is a professional employer organization, or PEO. Small and medium-sized businesses turn to PEOs to handle complicated human resource chores so much that they have become one of the fastest-growing service businesses in the country, taking over tasks like paying wages and payroll taxes. PEOs also help small business owners comply with the changes constantly coming from Washington in labor laws like the FLSA.

For businesses to stay out of trouble, a regular internal audit of wages and hours is important, according to Will Beesley, VP of HR Strategies. If employers are too busy running the business and neglect their own internal audit, they could be in for a rude surprise, he said. All of the nuances of wage and hour laws can seem inexplicable to a small business owner. Thats why a professional employer organization can be a valuable ally.

A majority of businesses aren’t prepared to unexpectedly pay over $ 100,000 in fines. In business for over 25 years, HR Strategies helps employers in Georgia negotiate the increasingly complex world of state and federal employer regulations.

About HR Strategies

HR Strategies provides the customizable HR solutions (including but not limited to payroll, benefits, workers compensation, tax administration, regulatory compliance, HR consulting, training solutions) and expertise of a large corporation’s personnel department in an affordable and effective solution. HR Strategies enables clients to reclaim time, stabilize and reduce labor costs, and stay compliant with government regulations.








(receipts of what kind, bank statements, credit card statements, etc.?)

Also, next “Tax Time” will be my first so what are some pointers from the working class Americans?

Answer by SumDude
If you do not have a house mortgage, super-excessive medical bills, or give thousands to charity, you do not need to save any receipts from expenses* unless you have some that go directly onto the form 1040. see and scan the form at irs.gov, or find a paper copy somewhere.

*in terms of the schedule A …. but there are other cases:

you do need to save paperwork that relates to income, like the buying and selling of investments (stock, coins, house, an old car you are going to fix up and sell AT A PROFIT) and if you make money on the side as an independent contractor, you need to keep track of that income and those expenses. {always good to save your pay stubs for reference until you get your year-end W-2.} And save copies of your W-2 and the tax return you are filing. and YE bank stmts, brokerage house (stock market) stmts, etc for historical data, and if have income data on them.

Most people though just have the basic wage income; and some have the things in paragraph one, and maybe a bit of P2, but that is about it.

Plenty of tax professionals obtain the highly respected enrolled agent designation to help organizations that are actually exempt from owing income tax. There are a large number of prospective clients among tax-exempt entities. That’s because the IRS requires annual returns from most of these organizations despite their tax exemption.

In fact, the IRS began in 2008 to require small tax-exempt organizations to file an annual electronic notice. These entities were previously exempt from filing requirements because their gross receipts did not exceed a certain threshold.

Larger tax-exempt organizations are required to file an annual Form 990 return. Organizations with gross receipts of less than $ 200,000 and total assets of less than $ 500,000 are eligible to use Form 990-EZ. When gross receipts are normally $ 50,000 or less, Form 990-N is applicable. By concentrating your enrolled agent CPE on these tax returns, you can distinguish your practice as a service for tax-exempt entities.

Organizations usually obtain tax-exempt status under section 501(c)(3) of the tax code. They are eligible to receive contributions from the public that are tax-deductions of the donors. However, these organizations have ongoing compliance obligations. Knowledge of these requirements is one of the subjects in your enrolled agent course of study.

For example, a section 501(c)(3) organization faces restrictions in its political and legislative lobbying activities.

An important use of your enrolled agent ethics course is avoiding underreporting of taxable income. One such situation is identifying cases of taxable unrelated business income for a tax-exempt organization. These activities require filing of an unrelated business income tax return.

In order for an entity to obtain tax exemption under section 501(c)(3), it must be organized and operated for a social charitable purpose. The exempt purpose may involve only benefits to a small community. Such organizations therefore exist in most cities and they value the services of a local professional who has passed the enrolled agent exam.

You can even help organizers create a section 501(c)(3) entity. After forming a corporation, the parties use Form 1023 to apply for tax-exempt status. The organization must then operate for its stated public purpose and avoid benefiting private interests. If any of the earnings personally benefit an individual inside the organization, an excise tax can be imposed on the transaction. Of course, even a tax-exempt organization needs a tax ID number. It is also liable for employment taxes related to its employees.

Organizations usually must apply to the IRS for tax-exempt status within 27 months of formation. Plenty of entities are serving a social purpose by generating business income rather than receiving donations. This is permissible as long as the only benefit to organizers is reasonable personal salaries. As more entrepreneurs are utilizing this process, there is an expanding need for enrolled agents to contribute their expertise.

IRS Circular 230 Disclosure

Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication.

 

If you plan to submit an application to the IRS for tax exempt status, you better do your homework. Because the application is long, complex, and could be delayed (and often is) if not done properly.

First you must determine if your business is eligible for tax-exempt status. In most cases, the IRS allows for tax exemption if your business falls within the government guidelines for a charitable organization. Entities that are eligible for tax exempt status include chambers of commerce, sports organizations, educational and charitable organizations, veterans organizations, among others.

There is a subtle difference between non-profit status and tax-exempt status. State law governs which entities are considered non-profit. While most non-profit groups are also federally recognized as tax exempt, there are exceptions and the classification is not automatic.

According to the IRS, for a business to be recognized as a tax exempt business, they are required to apply to the IRS for recognition. The application can be complicated and delayed for several reasons. For that reason, applications for tax exempt status have to be extremely thorough, or obtaining acceptance can be significantly delayed.

The IRS has listed some of the top reasons applications are stalled:

- The applicant did not submit enough financial data about the organization;

- The fiscal year should remain the same throughout the application;

- The applicant did not submit enough detail about the officers of the organization

- Many applications are not processed simply because whoever filed them did not fully explain precise information on the activities to show how the tax exempt purpose is achieved.

Detailed plans about the organization must be submitted so the IRS has a clear understanding of how the entity will operate.

- Small things, like not submitting all the information, not filling in every line, not including specific schedules that are required, all delay the application. Forms can be delayed simply because someone does not include their official title within the organization or use stamped a signature instead of writing it.

- The application must be submitted with official by-laws, regulations, or any other document that sets out the organization’s rules of operation. Failure to have this paperwork will delay the application.

- The number one reason the IRS cannot complete an application, is, believe it or not, the applicant fails to send in the proper user fee.

While the IRS can be an extremely helpful organization in itself, it’s rules are complicated, lengthy and are better off in the hands of people who truly care about crossing all their T’s and dotting their i’s. Don’t believe it? Check out the IRS website: irs.gov/publications/p557/index.html. It’s a lengthy, detailed document that no doubt answers every question you might have about forming a tax exempt organization. But it might be a good idea to find a company that does such filings for a living. Hiring an attorney, which can be costly, or paying an online service to do the filing for you might be your best bet to weed through the IRS mire.

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