How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Robin D. Your Own Question

Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7743
Experience:  15years with H & R Block. Divisional leader, Instructor
14155347
Type Your Tax Question Here...
Robin D. is online now
A new question is answered every 9 seconds

Several members of an adult community have formed a hobby club.

Resolved Question:

Several members of an adult community have formed a hobby club. At present, there are about 15 members who will pay annual dues of about $100.

We wish to open a bank account in the club's name. What is required to open such a bank account in Pennsylvania?

Are there federal filing requirements to be met. We do not expect any significant revenue other than the dues stated above.

Please advise.
Submitted: 1 year ago.
Category: Tax
Expert:  Robin D. replied 1 year ago.

Robin D. :

Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.

Robin D. :

Your club will need an EIN to open a bank account.

Robin D. :

You will obtain this from the IRS.

Robin D. :

You may want to register your club as a nonprofit with the IRS. Most likely a 501c7

Robin D. :

A social club must be organized for pleasure, recreation, and other similar purposes. A club will not be recognized as tax exempt if its charter, by laws, or other governing instrument, or any written policy statement provides for discrimination against any person based on race, color, or religion. A club may, however, in good faith limit its membership to members of a particular religion in order to further the teachings or principles of that religion and not to exclude individuals of a particular race or color.

Robin D. :

But you will need the EIN to start any process.

Robin D. :

It helps when requesting a Pennsylvania sales tax exemption.

Robin D. :

For organizations that plan to be incorporated in PA, this is a key step. In Pennsylvania, you need to file your Articles of Incorporation with the Department of State's office. For more information or copies of the basic forms contact:



The Department of State
Corporation Bureau
308 North Office Building
Harrisburg, PANNN-NN-NNNN
(717)(NNN) NNN-NNNN/p>

 

Robin D. :

My goal is to give you excellent service. If you are satisfied, please rate me. If you have follow-up questions on this same topic, use the reply box below. To start a new conversation with me on a new topic request me again.

Robin D. :

If you wish I can change to regular Q&A and leave CHAT

Customer:

You did not address my quesytion relating to federal filing requirements.

Robin D. :

I was waiting to see if you had any further questions. questions

Customer:

You did not address my question relating to federla filing requirements.

Robin D. :

Are you going to register as a nonprofit?

Robin D. :

That question is relevant to any answer I can give you.

Customer:

We do not understand the registration requirement. If we must register, we shall do so. We need a bank account and undersatnd that a tax ID number is XXXXX to do so. Having been issued a tax ID number, is there a filing requirement o be satisfied?

Robin D. :

No, if you register you would file your N 990 form each year (if your gross receipts are under $50,000).

Customer:

I asked if there is an annual filing requirement to be satisfied because a tax ID number has been issued. You answered "No" but went on to say that a Form 990N must be filed annually. Your answer contradicts itself. Please be clear.

Robin D. :

If you register as a nonprofit under the 501c7 status, you would have to file the 990. If you just get the EIN to open the bank account, no, you do not have to file a tax return.

Robin D. :

As long as the only money you take in is from the dues of the members then that is not income.

Customer:

If funds are received as donations and those funds are used to further the service aspects of the club's objectives, are such funds regarded as income which give rise to the requirement of annual filing?

Robin D. :

Yes then your club would need to file if it is not registered because those are not member dues. This is where your club would want to go ahead and request to be nonprofit as a social club. The money then would not be taxable. You would have to file the 990 form of course because you would not want to lose your status as a nonprofit, but you would not have to pay tax on the extra donations as long as the money is not used for purposes other than the club purposes and not for the benefit of any one person in the club.

Robin D. :

You would not want to receive too much from other sources though. A section 501(c)(7) organization may receive up to 35 percent of its gross receipts, including investment income, from sources outside of its membership without losing its tax-exempt status. No more than 15 percent of the amount may be derived from use of the club’s facilities or services by the general public or from other activities not furthering social or recreational purposes for members. If an organization has nonmember income exceeding these limits, all the facts and circumstances will be considered in determining whether the club continues to be exempt.

Robin D. :

You always want to make sure that most of the funding comes from dues.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7743
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
Robin D.
Robin D.
Tax Professional
7743 Satisfied Customers
15years with H & R Block. Divisional leader, Instructor