Booster club tax preparation is an important part of properly maintaining your booster club. Preparing taxes for booster clubs can be a little tricky as there are more forms and information than a standard personal tax return. This is a big reason why it is important to hire a professional IRS tax preparation service to do the reports on behalf of the organization, to ensure that it is being done correctly.
Does your booster club have to file taxes?
Every year your booster club must file a report on its taxes, even if it has tax-exempt status. While a tax-exempt booster club may not have to pay federal taxes, it is still required to fill out an informational return to the IRS annually. This form is referred to as Form 990 and it allows the IRS and the general public to evaluate the nonprofit’s progress. Booster club tax preparation for this form is important to make sure that it is done accurately.
About IRS Form 990
IRS form 990 reports booster club taxes but also includes information about the booster clubs mission, programs, and the booster club finances. There are different versions of Form 990 and when preparing taxes for booster clubs you may find that you need to file one or the other depending on your finances for the year.
The type of Form 990 to be filled out by your booster club tax preparation depends on the gross receipts of the organization. Most tax-exempt organizations file a 990, with exception to churches and state institutions. As a 501(c)(3) organization, you will file a 990.
Different versions of Form 990 include:
- Form 990
- For larger nonprofits with gross receipts of more than $200,000 or total assets of $500,000 or more.
- 990-EZ
- For larger nonprofits with gross receipts of less than $200,000 and assets under $500,000.
- 990-N
- For smaller nonprofits with gross receipts of less than $50,000. Filed electronically and as simple as filling out a postcard.
- 990-PF
- For private foundations, this informational return includes the exempt private foundations and the taxable private foundations, and organizations.
When are your booster club annual taxes due?
Your booster clubs annual return is due by the 15th day of the 5th month after the organization’s taxable year. If your group is following a standard January-December calendar year, then that means that your booster clubs Form 990 would be due on May 15th of each year. This gives you about 30 days longer to file for your organization than you do with your own individual taxes.
It’s important to not miss this deadline as the IRS has strict rules in place. If your booster club fails to file Form 990 3 years in a row, the tax-exempt status will be revoked. Without this status, your group can be subject to paying income taxes and paying user fees and filing additional documents with the IRS. Another important thing to note is that there are no appeal processes for automatic tax-exempt status revocations, so it’s difficult to get that status back once lost.
Booster club tax preparation
Filling out the tax return for a small nonprofit shouldn’t be terribly difficult as it is an easy and straightforward process that anyone in a management position could accomplish. For larger organizations, it would definitely be in the best interest of the booster club to have the booster club tax preparation done by an accountant familiar with tax-exempt organizations.
Whether your group chooses to do its own filing or not, the nonprofit tax preparation process should be the same.
You want to make sure that you have all of your financial records for the year.
The treasurer should have a nice record of documents and some of the information shared during the meetings can be found in the minutes of the meetings as well.
Because your group has such a long time to get Form 990 filed and submitted, you have plenty of time to find any missing documents and get all of the financial information to add up. Finding missing money or inaccuracies in the reporting documents can be a headache if you wait too long, but by getting an early jump on the booster club tax preparation you can avoid some stress and have the time needed to make sure everything matches up.
Income reporting for booster club tax preparation purposes
With booster clubs having multiple streams of income coming in from various donations and fundraisers it’s important to make sure that you keep everything both well documented as well as organized. Because your booster club will have it’s own EIN (Employer Identification Number), separate from the school’s EIN, the booster clubs funds should be held separately from the school’s funds to help with accurate accounting.
Your booster club should also keep its funds well organized by either using separate bank accounts or a very well documented system of paperwork outlining exactly where the money is coming from, what it’s designated for and where it is going.
Helpful paperwork to have on hand with booster club tax preparation are:
- Cash Receipts
- Cash disbursements
- Checking account statements
- Balance sheets
- Income Statements
- Copies of receipts for any donations or sales as a result of an in-kind donation
- Any Relevant Documents
With proper IRS club guidelines in place, you can be ready and prepared for tax time well in advance. Just make sure that you have a budget in place, maintain good records, and elect a treasurer that can help to keep the booster club finances organized.
Reporting the non-monetary donations
If your booster club chose to accept in-kind donations or the donation of services, then there should have been a written agreement in place between both parties as a result. Use these documents as a reference when filling out your annual tax return.
The person who donated the items or services received a paper from you stating the value and item information, they will use this on their taxes to get a charitable deduction, and your taxes will show that you received the gift which not only helps to show where your income is coming from but also helps to support their tax claims.
By keeping documents organized throughout the year and keeping an accurate record, your booster club tax preparation can be significantly easier. This takes a lot of time and guesswork when it’s time to file, making it easy for a booster club member or an accountant to file on your club’s behalf.
