Download 3. FSNA Federal Income Tax Exempt Umbrella

Incorporate? EIN? Federal
Income Tax Umbrella?
HELP!!!!
Understanding Your
Local Chapter’s Federal
and State Requirements
Three Parts to Understand:
1.
Incorporate
2.
EIN
3.
Income Tax
Umbrella
1. Incorporate
What Does it Mean?

To obtain an official charter or articles of
incorporation from the Florida Dept. of State
for an organization.
1. Incorporate
Why Become Incorporated?

Your local Association is its own separate entity. It
does not belong to the school district or FSNA or
SNA.

One of the most important reasons to incorporate is
that incorporating protects your local officer’s
personal assets from any association liabilities
such as creditors or lawsuits.
1. Incorporate
Why Become Incorporated?
In other words, if your local Association
is not incorporated,
the LOCAL OFFICERS are
PERSONALLY RESPONSIBLE for all
liabilities of your local Association.
1. Incorporate
How Do the Chapters Become Incorporated?

If your chapter is not already incorporated,
simply file Articles of Incorporation with the
Florida Department of State, Division of
Corporations.
The FSNA office can help with this.
1. Incorporate
How Much Does it Cost to Incorporate?

It costs about $70 to file for incorporation.
1. Incorporate
What are the Annual Filing Requirements?

If your chapter is incorporated, your chapter will have to
file a Not-For-Profit Corporation Annual Report with the
Florida Department of State, every year.

To avoid a $400 penalty, the report must be processed by
the FL. Dept. of State by May 1
Note-not completed by May 1.
1. Incorporate
What are the Annual Filing Requirements?
Reminders from the FL. Dept. Of State will be
emailed to the address they have on record.
Know who filed the prior year!
The Annual Report form is on the Fl. Dept. of
State web site. Go to www.sunbiz.org.
You will need your State document number that
was sent to you from the Fl. Dept. of State with
your chapter’s stamped articles of incorporation.
1. Incorporate
What Questions are on the Annual Report?
The report asks for the contact information of
your current local officers.
No financial information is requested.
1. Incorporate
How Do the Chapters Pay for the Annual Report?

If paying by check, print out the form. Complete
the form and mail it with the check to the address
on the form. It will take 3 weeks to process your
check. To avoid a penalty, be sure to mail it by
the first week in April.

If paying by credit card, complete the form on-line
and follow instructions for payment. Your report
will be processed in 2-3 days. To avoid a
penalty, complete on-line by April 26.
1. Incorporate
What is the Fee for Filing the Annual Report?
If your chapter is incorporated, it costs about
$65 per year to be paid with the Annual
Report.
1. Incorporate
Annual Report Review
Does Our Chapter Have to Incorporate?

No, but again, if your local Association is not
incorporated, the LOCAL OFFICERS are
personally liable.
1. Incorporate
Annual Report Review
What information do you need to file?

Which local officer is in charge of filing
by May 1?

Who filed the prior year?

Where are the filings for the prior years?

About $70 from your local chapter funds/credit
card.
1. Incorporate
Annual Report Review
What information do you need to file?


Document number from your chapter’s stamped
articles of incorporation. The Florida Dept. of
State stamped your articles when you filed to
become incorporated.
Name and contact information for your
chapter’s President, President-Elect and
Secretary/Treasurer.
1. Incorporate
Annual Report Review
Where can you find this information?

Ask the previous local chapter officers.

Or, go to www.sunbiz.org and click on the
Popular Link: Look up a Business Name.

Always keep a copy for your local chapter’s
records.
2. EIN
What Does it Mean?

EIN (Employer Identification Number) is
an unique number that identifies your
local Association to the IRS.

It has nothing to do with your tax status.
This is not the school district number or the
FSNA number or SNA number.
2. EIN
Why Does Your Local Chapter Need an EIN?

You need an EIN to file the annual 990N epostcard.

EIN is the number that you should use on
your local association's bank account
information.

If your local chapter is not already under the
FSNA Federal Income Tax Exemption
Umbrella you will need an EIN to get under
the umbrella. This will be explained in step 3.
2. EIN
How Do You Apply for an EIN?

To file for an EIN, you must complete
the SS-4 form and submit it to the IRS.

Contact at the FSNA office for the
partially completed form and
instructions.
2. EIN
How Do I know if My Local Association
Already has an EIN?

Ask your prior officers.

Come talk to us after this presentation
or contact at the FSNA office.
3. FSNA Federal Income Tax
Exempt Umbrella
What Does it Mean?

Federal tax exemption means that an organization does
not pay corporate federal income tax from activities that
are related to the purpose for which the organization was
granted exempt status.
• Income tax is federal tax that all organizations pay on
the net profit of the organization. Just as most
individuals pay income tax on their personal earnings,
so must most organizations pay taxes on the
organization’s earnings.
3. FSNA Federal Income Tax
Exempt Umbrella
Why?

If your local Association is not federal income
tax exempt then your Association is required
to pay taxes on all income received by your
Association.
If the income is not reported, the local officers
are potentially liable for payment of income
taxes, penalties, and interest.
3. FSNA Federal Income Tax
Exempt Umbrella
Why?

Your tax exempt status is awarded when you
get under the FSNA federal income tax exempt
umbrella. Your tax status becomes federal
income tax exempt under section 501 (c)6.
• Many organizations require proof of tax exempt
status in order to have fundraising events.
3. FSNA Federal Income Tax
Exempt Umbrella
How Do You Apply?

You must have an EIN to apply
for the FSNA Umbrella. Please
contact the FSNA office if you
would like to start these
procedures.
3. FSNA Federal Income Tax
Exempt Umbrella
How Much does it Cost?

There is no cost to get under the FSNA
Federal Income Tax Exempt Umbrella.
3. FSNA Federal Income Tax
Exempt Umbrella
What Are the Annual Filing Requirements?

All federal income tax exempt local
Associations whose gross receipts (the $
received by your Association) are less than
$50,000 are now required to e-file a 990N.
To clarify, if your local Association has
gross receipts greater than $50,000, you
would be required to file a 990 which is
much more complicated.
3. FSNA Federal Income Tax
Exempt Umbrella
What are the Annual Filing Requirements?

The 990N must be e-filed each year by the 15th
day of the fifth month after the close of the local
chapter’s tax period.
In other words, your Association’s tax period
should end on July 31, so the e-filing is due by
December 15.
Be safe! E-file in August!
Always keep a copy for your Association’s records!
3. FSNA Federal Income Tax
Exempt Umbrella
What Questions are on the 990N E-card?


The report asks for the contact information of
your current local officers.
No financial information is requested.
3. FSNA Federal Income Tax
Exempt Umbrella
Is There an Annual Fee to e-file the 990N?

No, there are no fees to e-file the 990N.
Breaking it Down
1. Incorporate
2. EIN
3. FSNA Umbrella
Initial Form
Articles of
Incorporation
SS-4
FSNA Submits
Initial Cost
About $70
$.00
$.00
Issuing Department
FL Dept. of State,
Division of
Corporations
U. S. Dept. of
Treasury, IRS
U. S. Dept. of Treasury,
IRS
Annual Reporting
Not-For-Profit
Annual Report
No Annual
Reporting
990N
Annual Reporting Cost
About $65
No Annual Fees
No Annual Fees
Penalty if not filed on
time.
$400 Late fee,
penalties, loss of
Incorporation
N/A
Late fees, penalties,
loss of federal income
tax exemption.
Additional Information

Does the local Association HAVE to
incorporate in order to be under the FSNA
Federal Income Tax Exemption Umbrella?
No, but your Association does need an EIN to
be under the FSNA Federal Income Tax
Umbrella.
Additional Information

Sales Tax vs. Income Tax
Sales Tax- State tax paid on purchases made by the Association.
Local Associations do not meet the requirements to be sales
tax exempt. They should pay sales tax on all purchases made by
the Association.
Income Tax- Federal tax that all organizations pay on the net
profit of the organization. Just as most individuals pay income tax
on their personal earnings, so must most organizations pay taxes
on the organization’s earnings. Your Association should be
under the FSNA Income Tax Umbrella in order to be income
tax exempt.
Additional Information

TIN vs. EIN
TIN- (Tax Identification Number) A TIN is a tax exempt number that
is assigned by the Florida Department of State. The TIN
identifies organizations as exempt for state sales tax. Again,
FSNA and local Associations do not meet the requirements to
be sales tax exempt and therefore, will not receive a TIN.
EIN- (Employer Identification Number) a unique number that
identifies your local Association to the IRS. EIN has nothing to do
with tax status. Tax status as a 501(c)6 is awarded when your
chapter is under the FSNA Federal Income Tax Umbrella.
Additional Information
As a Professional Association, What Should the
Local Chapter Have on File?
Bylaws – it is mandatory for every local
association to have bylaws!
Definition: the written rules of conduct of
any organization. They provide rules on the
elections of a board and officers, filling
officer vacancies, and types and duties of
officers. Bylaws are a contract among
members, and must be formally adopted
and/or amended.

Additional Information
As a Professional Association, What Should the
Local Chapter Have on File?

If your chapter is incorporated - stamped
Articles of Incorporation and Annual
Report filings with your chapter’s
Document Number.

If you are under the FSNA Federal Income
Tax Umbrella - 990N filings.
Additional Information



Make sure all future officers are aware of
your local chapter’s filing requirements. Is
your chapter incorporated and need to file
the Annual Report? Does your chapter have
an EIN and need to file the 990N?
Make sure future officers know where the
paperwork is filed.
Make sure address and contact information
is updated and officers know where to get
the Association’s mail.
Additional Information

1.
2.
3.
If your local Association is not incorporated, but already
has an EIN, and is under the FSNA Federal Income Tax
Exempt Umbrella, what steps do you need to take if
your chapter decides to incorporate?
Become incorporated
Get a new EIN as an incorporation
Re-file under the FSNA Federal Income Tax
Call the FSNA office. Staff can
assist with all the filings.
Questions and Answers

What questions do you have?
Toll Free Phone: (888)878-1832
Email: [email protected]