Business Tax – Is a 1120 and 1065 business tax return a federal tax return?
Is a 1120 and 1065 business tax return a federal tax return?
I want to know if the name of a business is on a 1120 or 1065 is it considered a federal tax return if it has no name of a state on it? I know there are 1120 and 1065 tax return with the name of the state on it that makes it a state tax return but if it have no name of the state on it will it make it a federal tax return
Back with more news for you today. It’s amazing how much good information there is on this stuff out there if you know where to look. Three in particular that I found really valuable were…
No simple answers to health care tax credit notes fà ¼ r small …
The new federal health-reform law provides a coveted tax credit to help small businesses afford health insurance for workers, but business owners say figuring out whether they qualify and how much help they might get is complicated. …
Rep. Fattah Hosts ‘Healthcare 101′ Forum for Small Business …
“We are dispelling the myths about the new law and spotlighting its immediate benefits, starting with the immediate tax credits that small business entrepreneurs receive when they offer qualified healthcare coverage.” …
In more than ten years of practice in tax law, I am here to tell you that a majority of folks who fall behind on their taxes are not contemptuous law violators. Most of them are simply overwhelmed. …. It is interesting to see that the US are having the same problems with their government as we are in the UK – at least we have an election this week so I am hoping that the party that get in do good things for business tax. 4 Richard Conboy May 5, 2010 at 4:23 pm …
Hope you enjoy the read as much as I did and please if you have something to say, use the comments form below to let everyone know your thoughts.
Have a great day!
Introduction
A non-profit organization (NPO) is defined as an organization that does not distribute surplus income to shareholders but rather uses its funds to pursue a specific public purpose. Also called “not-for-profit organizations,” NPO’s can file for certain tax-exempt statuses so long as they meet government requirements.
Features of non-profit organizations
The main focus of any non-profit organization or corporation is not to collect profits but rather to fulfill their stated goal. Instead of distributing profits to members, any additional income that the organization makes (called “surplus”) is recycled back into the organization for furtherance of their goals. This financial scheme serves to ensure that there are companies who exist to promote efforts aimed at benefiting humanity as a whole.
Usually the non-profit’s goal is stated in the organization’s mission statement. It is important for the mission statement to clearly and precisely define the organization’s purpose, since their non-profit status hinges on their purpose.
Tax Exempt Status
In order to obtain tax-exempt status, the organization’s purpose must fit in one of the following categories of public purpose:
- Charitable
- Educational
- Literary
- Religious
- Scientific
It is important to note that the purpose must be tangible and provable. This holds true even for the religious and scientific categories; many organizations do not qualify as non-profit organizations because their purpose is unfeasible. For example, an organization claiming to be pursuing the “scientific purpose of studying flying cats” might not qualify; whereas, a literature society that exists to discuss flying cats in popular literature might qualify under the literary category.
Tax exemption means that the organization does not have to pay federal or state taxes on activities that are related to the organization’s purpose. This means that the organization must demonstrate that it is actively working toward its goal through proper documentation. Again, this serves as an incentive for more organizations to make contributions towards development and humanitarian efforts. The non-profit organization still has to pay taxes on activities that are unrelated to their stated purpose, for example, the sale of unrelated products or services.
Filing for Non-Profit status
The vast majority of non-profits being filed today do so as a “Charitable Organization” under section 501(c)(3) of the Internal Revenue Code put forth by the Internal Revenue Service. This is done by filling out IRS Form 1023. There is an $850 filing fee if the organization makes over $10,000, and a $400 fee if it makes less than $10,000.
Some organizations such as churches automatically qualify as non-profits, even without filing. Also, fees have been subject to change, so double check with the IRS to verify filing fee amounts.
Charitable Organizations are different from “public charities” and “private foundations”. The IRS defines a public charity as a charity that derives the majority of its income from the public or from governmental support. A private foundation is defined as an organization that receives its funding from private sources such as investments. Additionally, private foundations do not make disperse their funds directly in charity but rather issue grants to other organizations. Both public charities and private foundations file under section 509 of the Revenue Code rather than under 501.
Conclusion
If you wish to determine your organization’s eligibility for non-profit, tax-exempt status, be sure to double check that the corporation’s purpose fits in one of the described purpose categories. Also, you would want to determine precisely which activities are related to your organization’s purpose. If you need to know more details, inquire with the IRS or obtain a LegalMatch lawyer who can help you prepare documents.
Ken LaMance is the Corporate Counsel for LegalMatch.com in South San Francisco, California. LegalMatch is fast, free, and confidential. LegalMatch is America’s original attorney/client matching service and is not a referral service. When a consumer presents their issue to LegalMatch, our system matches the consumer’s case to LegalMatch lawyers in their city or county based on the specifics of the consumer’s case, lawyer’s location, and area of legal practice. LegalMatch also offers a number of useful resources like an online law library (http://www.legalmatch.com/law-library/), tips, law blog, and forums on nearly every topic.
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