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Dave CPA
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Our small club has a business checking account, and an EIN

Resolved Question:

Our small club has a business checking account, and an EIN number. The only income we get is from dues collected which we use to purchase tshirts for members or needed items for trips we take (we are a hiking/outdoors club) Do we need to file taxes?
Submitted: 11 months ago.
Category: Tax
Expert:  Dave CPA replied 11 months ago.
Hello,

Welcome to Just Answer,

This would be tax exempt as it sounds like you are describing a 501(C)7 club.

IRC 501(c)(7) exempts from federal income tax, clubs "organized for pleasure, recreation, and other nonprofitable purposes, substantially all of the activities of which are for such purposes and no part of the net earnings of which inures to the benefit of any private shareholder.

The link below has more information on this topic from the IRS for your reference. Please let me know if you have any other questions on this topic before you rate my answer. A positive rating is what I strive for. Regards Dave

http://www.irs.gov/irm/part7/irm_07-025-007.html
Customer: replied 11 months ago.

Hello,


Thank you for your answer, it is very helpful. Our club doesn't make more than $1,000 a year, and we usually spend most of that going on a camping trip and paying park fees when we go hiking. Could you direct me to any forms I will need to fill out?


Thank you

Expert:  Dave CPA replied 11 months ago.

Hello,

I'm glad I as able to be of service. A 990ez would be the form. Link below.

Although they are exempt from income taxation, social clubs are generally required to file annual returns of their income and expenses with the Internal Revenue Service.

Please let me know if you need anything else before you rate my answer. Regards Dave

http://www.irs.gov/Charities-&-Non-Profits/Form-990-Series-Which-Forms-Do-Exempt-Organizations-File%3F-(Filing-Phase-In)
Customer: replied 11 months ago.

Okay, great! Just to clarify, even though we don't make very much each year, we should still report our income and expenses to the IRS with the 990-EZ form?


Thank you!

Expert:  Dave CPA replied 11 months ago.
Organizations with less than $50,000 of receipts are required. I sent you the forms per your request for reference. If the club grows they might be of interest. Below is the instructions on 990 and you can see point 10 under exempt from filing on page 4 would dictate you don't have to file.

Have a great day and let me know if you need anything else before you rate my answer. Regards Dave

http://www.irs.gov/pub/irs-pdf/i990ez.pdf
Customer: replied 11 months ago.

Thank you so much for your help! Hope you have a fantastic day.


Best regards,


Renee

Expert:  Dave CPA replied 11 months ago.
You too. Please remember to rate my answer as that is how I receive credit for helping you. Regards Dave
Dave CPA, Accountant
Category: Tax
Satisfied Customers: 840
Experience: Vast knowledge within the accounting/tax industry
Dave CPA and 4 other Tax Specialists are ready to help you

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