Nonprofit educational organizations such as PTAs are exempt from
paying income taxes, as long as they adhere to the laws
governing such organizations. Be sure your President signs and
returns yearly to the Florida PTA office, the form titled
INTERNAL REVENUE - EXEMPT FROM INCOME TAX. The form allows the
state office to act on your behalf to make sure your PTA is
exempt from income tax. The form is found in the President's Kit
of Materials sent from Florida PTA during the summer. Florida
PTA will send the Kit of Materials when they have received the
form with information about the new elected President.
A key point to guide PTAs is the importance of maintaining their
role as advocates for children. A PTA which diverts its'
energies to overemphasize fund-raising reduces its effectiveness
and increases the likelihood it must maintain complicated and
extensive financial records. The Florida PTA recognizes the
necessity for PTAs to have enough money to run their
associations and the traditions of PTAs purchasing gifts for
schools is strong. However, the greatest contributions PTAs make
are their efforts on behalf of children, rather than their
money. Federal tax laws reinforce this by imposing little or no
paperwork on PTAs who keep fundraising to a reasonable minimum.
WHO MUST FILE?
Beginning with the 2007-2008 fiscal year, all PTAs are
required to make an annual filing with the IRS. The
determination of which form is required is based on the Gross
Receipts Test which looks at a three-year average to
determine the PTA’s “normal” gross receipts.
The gross receipts amount is calculated by totaling all
income received during each fiscal year before any costs
or expenses are deducted.
When a PTA collects $10,000 in a candy sale, but pays $5,000 to
the vendor, the ENTIRE $10,000 is considered GROSS receipts.
Carryover amounts on hand at the beginning of the fiscal year
are not included. Florida PTA and National PTA portions of
membership dues collected should also be excluded, as these
amounts do not belong to the local unit.
Gross Receipts Test
Your 2007-2008 Gross Receipts $
Your 2006-2007 Gross Receipts $
Your 2005-2006 Gross Receipts $
-----------
Your Total Gross Receipts
$
Your Total Gross Receipts divided
by 3 = Average Gross Receipts
Is the average greater than $100,000?
Then file Form 990.
Is the average greater than $25,000?
Then file Form 990EZ
and Schedule A.
Otherwise, file Form 990N (e-Postcard).
All PTA units (local, council, and region) not required to file
a Form 990 or Form 990EZ will be required to file Form 990N
(e-Postcard). Form 990N, the e-Postcard, must be filed
electronically.
GROSS receipts exceeding
$100,000 clearly place a PTA in an inappropriate financial
position for an organization such as ours. The CPA who serves
the Florida PTA recommends that a PTA with income reaching that
level should obtain services of a professional accountant.
If your PTA has not
filed in the past but has now gone over the $25,000 averaging
for 3 years, it is your responsibility to get the forms and
file. The forms 990EZ and Schedule A can be obtained at any Tax
Office or on-line at http://www.irs.gov
WHAT IS THE ACCOUNTING PERIOD?
The term accounting period refers to the
PTA's fiscal year (as set by the Federal Govt.)
July 1st - June 30th.
WHEN MUST THE RETURN BE FILED?
PTA must file no later
than November 15th for a fiscal year ending the previous June
30th. It is highly recommended that the outgoing Treasurer
prepare and send in the taxes for their year before they leave
office. The taxes can be mailed anytime before Nov. 15th. Be
sure to make copies of the taxes and mail the original certified
(if you wish) to the IRS.
WHAT ABOUT THE LETTERS THE IRS KEEPS SENDING?
Whenever the IRS writes to your PTA, answer them. NEVER ignore
an inquiry. Keep copies of all correspondence.
WHO CAN I CALL FOR HELP?
It is always a good idea to contact the Florida PTA office with
questions, rather than calling the IRS. If any correspondence is
received from the IRS, please contact our PCCPTA Treasurer. Our
Treasurer can help your PTA obtain assistance.
This information, provided by Florida PTA, gives you some basic
facts regarding income taxes. But the best source for details on
filling out tax forms can be found in the IRS publications for
the respective forms and the section on filling out the form in
National PTA's MONEY MATTERS.
Information courtesy of
Florida PTA Dollars & Sense
