Incorporate? EIN? Income Tax Umbrella? HELP!!!! 3 easy steps to make your local association a professional business association

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1 Incorporate? EIN? Income Tax Umbrella? HELP!!!! 3 easy steps to make your local association a professional business association

2 Three Easy Steps: 1. Incorporate 2. EIN 3. Income Tax Umbrella

3 1. Incorporate What Does it Mean? To obtain an official charter or articles of incorporation from the Florida Dept. of State for an organization.

4 1. Incorporate Why? Your local Association is a separate entity. 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. In other words, if your local Association is not incorporated, the LOCAL OFFICERS are PERSONALLY RESPONSIBLE for all liabilities of your local Association.

5 1. Incorporate How Do You Apply? To become incorporated, simply file Articles of Incorporation with the Florida Department of State, Division of Corporations. A partially completed prototype Articles of Incorporation is available at the FSNA office. If your chapter decides to incorporate, just call Kathy at FSNA and she will send them to you.

6 1. Incorporate How Much does it Cost? It costs about $70 to file for incorporation.

7 1. Incorporate What are the Annual Filing Requirements? After your chapter becomes 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 penalty, the report must be processed by the FL. Dept. of State by May 1 Note-not completed by May 1.

8 1. Incorporate What are the Annual Filing Requirements? You will NOT receive a notice that your Annual Report is due. The Annual Report form is on the Fl. Dept. of State web site. Go to You will need your State document number that was sent to you with the stamped articles of incorporation.

9 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 Incorporate What are the Annual Filing Requirements? 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.

10 1. Incorporate What are the Annual Filing Requirements? Always keep a copy for your Association s records!

11 1. Incorporate What Questions are on the Annual Report? The report asks for a listing of your local officers. No financial information is requested.

12 1. Incorporate What is the Annual Fee? After you become incorporated, it costs about $65 per year to be paid with the Annual Report.

13 1. Incorporate Does Our Chapter Have to Incorporate? No, but again, if your local Association is not incorporated, the LOCAL OFFICERS are PERSONALLY LIABLE!

14 2. EIN What Does it Mean? EIN (Employer Identification Number) An EIN is a unique number that identifies your local Association to the IRS.

15 2. EIN Why? 1. You must have an EIN to apply for the FSNA Federal Income Tax Exemption Umbrella. This will be explained in step The EIN is the number you should give the bank to set up your local Association's bank account.

16 2. EIN How Do You Apply? To file for an EIN, you must complete the SS-4 form and submit it to the IRS. The form asks for address and contact information. No financial information is requested. Contact Kathy at the FSNA office for the partially completed form and instructions.

17 2. EIN How Much does it Cost? There is no cost to file the SS-4 form.

18 2. EIN Are there Annual Filing Requirements and/or Fees? There are no annual filing requirements or fees after you have received your EIN.

19 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.

20 3. FSNA Federal Income Tax Exempt Umbrella Why? If your Association is not federal income tax exempt then your Association is required to pay taxes on all income received by the Association. If the income is not reported, the local officers are potentially liable for payment of income taxes, penalties, and interest.

21 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.

22 3. FSNA Federal Income Tax Exempt Umbrella How Do You Apply? After you receive your chapter s EIN, contact Kathy at FSNA. Kathy will submit your request to the IRS and will notify you when your chapter is added.

23 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.

24 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.

25 3. FSNA Federal Income Tax Exempt Umbrella What are the Annual Filing Requirements? The 990N must be e-filed each year by the 15 th 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!

26 3. FSNA Federal Income Tax Exempt Umbrella What Questions are on the 990N E-card? Address and contact information is requested. No financial information is requested.

27 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.

28 Breaking it Down Initial Form 1. Incorporate 2. EIN 3. FSNA Umbrella Articles of Incorporation SS-4 Initial Cost About $70 $.00 $.00 Issuing Department Annual Reporting FL Dept. of State, Division of Corporations Not-For-Profit Annual Report U. S. Dept. of Treasury, IRS No Annual Reporting FSNA Submits U. S. Dept. of Treasury, IRS 990N Annual Reporting Cost About $65 No Annual Fees No Annual Fees Penalty if not filed Late fees, penalties, loss of Incorporation N/A Late fees, penalties, loss of federal income tax exemption.

29 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.

30 Additional Information What is the absolute minimum requirement that all local Associations need to operate? At the very least, every Association needs Bylaws. A Bylaws prototype is available. Contact Kathy Clark at the FSNA office.

31 Additional Information Sales Tax vs. Income Tax Sales Tax- 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.

32 Additional Information EIN vs. 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. 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. FSNA and local Associations do not meet the requirements to be sales tax exempt and therefore, will not receive a TIN.

33 Additional Information Always keep copies!! The FSNA office should be sent copies of: 1. Your chapter s Articles of Incorporation 2. Letter confirming incorporation from Florida Dept. of State, and 3. SS-4 form including the new EIN

34 Additional Information Make sure all future officers are aware of the filing requirements. 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.

35 Additional Information 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? 1. Become incorporated 2. Get a new EIN as an incorporation 3. Re-file under the FSNA Federal Income Tax Umbrella as an incorporation

36 Additional Information How can we check the status of our local Association? Kathy has all the documentation. You can check with her during the break, or call her at the FSNA office.

37 Additional Information How can I contact Kathy at the FSNA office? Call toll free: kclark@floridaschoolnutrition.org

38 Questions and Answers What are the 3 steps to make your local Association a professional business association? 1. Incorporate 2. EIN 3. FSNA Federal Income Tax Exempt Umbrella

39 Questions and Answers What is the main reason to incorporate? Incorporating protects your local officer s personal assets from any association liabilities such as creditors or lawsuits.

40 Questions and Answers What are the annual filing requirements to keep the incorporation? After your chapter becomes incorporated, the local chapter will have to file a Not-For- Profit Corporation Annual Report with the Florida Department of State, every year.

41 Questions and Answers What fees do incorporations pay to the Florida Dept. of State? To become incorporated - about $70. After becoming incorporated - about $65 per year, sent with the Not-For-Profit Annual report.

42 Questions and Answers What are the 2 reasons to apply for an EIN? 1. You must have an EIN to apply for the FSNA Federal Income Tax Exemption Umbrella. 2. The EIN is the number you should give the bank to set up your local Association s bank account.

43 Questions and Answers Yes or No. If a local Association is not under the FSNA Federal Income Tax Exemption Umbrella, does it need to pay Federal Income Taxes on its profits? Yes, furthermore, if the income is not reported, the local officers are potentially liable for payment of income taxes, penalties, and interest.

44 Questions and Answers What questions do you have? Toll Free Phone: (888)