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Lev
Lev, Tax Advisor
Category: Tax
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Experience:  Taxes, Immigration, Labor Relations
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I am approaching the 1st time fore which I will be applying

Resolved Question:

I am approaching the 1st time fore which I will be applying for grants. This grant will be to fund an exercise class for those with physical disabilities. My questions are (1) If I find grantors that are willing to grant monies to an individual project how will that be accounted for on my Federal tax return. (2) I apply for a grant with a sponsoring nonprofit organization would those monies monies flow through my return as well? Finally, if I receive a grant under either of these scenerios is there a form that must be filed with the Social Security Administration Office?

I am not being paid for my any of my service. In fact, I am funding this 1st year's expenses myself.

Thank you for your assistance.

Best Regards,

Laura
Submitted: 8 months ago.
Category: Tax
Expert:  Arthur Rubin replied 8 months ago.

Arthur Rubin :

I'm sorry, this is not in my field of expertise.

Expert:  Lev replied 8 months ago.
Hi Laura and welcome to our site!
I will address all your questions.

(1) If I find grantors that are willing to grant monies to an individual project how will that be accounted for on my Federal tax return.
In general - if the grand represents a loan which must be paid back - that amount is not reported because the loan is never included into the gross income.
If the grant would not be repaid back - that amount is included into the gross income of the recipient. Generally - that amount will be treated as your business income. As there likely will be qualified expenses - such expenses should be deducted - and only net income will be subject of income taxes.

(2) I apply for a grant with a sponsoring nonprofit organization would those monies monies flow through my return as well?
If the grant is provided to you - that will be your income regardless of the source. However - if you create your own nonprofit organization - and the grant will be given to that organization - it will be reported on that organization return - not yours.
What is important for reporting in your examples - who receives funds - not who pays.

Finally, if I receive a grant under either of these scenarios is there a form that must be filed with the Social Security Administration Office?
There is nothing specifically you need to report to the Social Security Administration.
However - when you will file your tax return - your grant amount will be reported as your gross business income. After all qualified expenses are deducted - if your net income will be above $400 - that amount will be subject of self-employment taxes. So the IRS will report your self-employment taxes to the SSA.

Let me know if you need any help with reporting.
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 22617
Experience: Taxes, Immigration, Labor Relations
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