Incorporate? EIN? Federal Income Tax Umbrella? HELP!!!!

1. Incorporate? EIN? Federal Income Tax Umbrella? HELP!!!! Understanding Your Local Chapter’s Federal and State Requirements

2. Three Parts to Understand:

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 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.

5. 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.

6. 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.

7. 1. Incorporate How Much Does it Cost to Incorporate? • It costs about $70 to file for incorporation.

8. 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.

9. 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.

10. 1. Incorporate What Questions are on the AnnualReport? The report asks for the contact information of your current local officers. No financial information is requested.

11. 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, besure 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.

12. 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.

13. 1. Incorporate Annual Report Review • No, but again, if your local Association is not incorporated, the LOCAL OFFICERS are personally liable. Does Our Chapter Have to Incorporate?

14. 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.

15. 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.

16. 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.

17. 2. EIN What Does it Mean? • EIN (Employer Identification Number) is an unique number that identifies yourlocal Associationto 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.

18. 2. EIN Why Does Your Local Chapter Need an EIN? • You need an EIN to file the annual 990N e-postcard. • 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.

19. 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.

20. 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.

21. 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.

22. 3. FSNA Federal Income Tax Exempt Umbrella • 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. Why? If the income is not reported, the local officers are potentially liable for payment of income taxes, penalties, and interest.

23. 3. FSNA Federal Income Tax Exempt Umbrella • 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. Why? • Many organizations require proof of tax exempt • status in order to have fundraising events.

24. 3. FSNA Federal Income Tax Exempt Umbrella • You must have an EIN to apply for the FSNA Umbrella. Please contact the FSNA office if you would like to start these procedures. How Do You Apply?

25. 3. FSNA Federal Income Tax Exempt Umbrella • There is no cost to get under the FSNA Federal Income Tax Exempt Umbrella. How Much does it Cost?

26. 3. FSNA Federal Income Tax Exempt Umbrella • 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. What Are the Annual Filing Requirements? 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.

27. 3. FSNA Federal Income Tax Exempt Umbrella • 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. What are the Annual Filing Requirements? Be safe! E-file in August! Always keep a copy for your Association’s records!

28. 3. FSNA Federal Income Tax Exempt Umbrella • The report asks for the contact information of your current local officers. • No financial information is requested. What Questions are on the 990N E-card?

29. 3. FSNA Federal Income Tax Exempt Umbrella • No, there are no fees to e-file the 990N. Is There an Annual Fee to e-file the 990N?

30. Breaking it Down

31. 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.

32. 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- Federaltax that all organizations pay on the net profitof 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.

33. 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.

34. 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.

35. 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.

36. 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.

37. 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? • 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.

38. Questions and Answers • What questions do you have? Toll Free Phone: (888)878-1832 Email: jblair@floridaschoolnutrition.org