File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

Form 1040 Federal Tax Form

Income Tax For SeniorsFile Form 1040x OnlineHow To Amend 2009 Tax Return1090ez FormTurbo Tax 2008Www H&r Block ComFiling 2007 Tax Return LateIrs Free E File 2012Tax Information For StudentsForm1040ez1040ezFree E File State And Federal TaxesHow To File A Amended ReturnTax Amendment Form 2010Where Can I File 2011 Taxes OnlineH&r Block Taxcut OnlineEz Tax Form 2011H And R Block Online TaxesCan You File 1040ez OnlineFile 2010 Tax Return OnlineHow To Do A Tax AmendmentFree E File Federal And State Taxes1040ez 2010 File OnlineHow To Amend TaxesTax Form For Military1040 Amended Tax FormIncome Tax Ez Form2012 Amended Tax Form2008 Amended Tax ReturnFederal Tax AmendmentHow Do I Amend My 2012 TaxesI Didn T File My 2011 TaxesE File 2010 Taxes For FreeHow To Amend TaxesNeed To File State Taxes OnlyIrs Ez Form 20111040Federal Income Tax Forms 1040ezHr Block Tax Software2012 Income Tax Form 1040

Form 1040 Federal Tax Form

Form 1040 federal tax form 6. Form 1040 federal tax form   Ingresos de Propinas Table of Contents Introduction Useful Items - You may want to see: Cómo Mantener un Registro Diario de PropinasRegistro electrónico de propinas. Form 1040 federal tax form Cómo Declarar las Propinas a su EmpleadorInforme electrónico de propinas. Form 1040 federal tax form Declaración final. Form 1040 federal tax form Cómo se Declaran las Propinas en la Declaración de Impuestos Asignación de Propinas Introduction Este capítulo es para empleados que reciben propinas. Form 1040 federal tax form Todas las propinas que usted reciba son ingresos y están sujetas al impuesto federal sobre los ingresos. Form 1040 federal tax form Tiene que incluir en el ingreso bruto todas las propinas que reciba directamente, propinas recibidas por medio de cargos a tarjetas de crédito o débito que le son entregadas por su empleador y su participación de todas las propinas recibidas de un fondo común u otro acuerdo de distribución de propinas. Form 1040 federal tax form El valor de las propinas que no son pagadas en efectivo, tales como boletos, pases u otros artículos de valor también son ingresos y están sujetos al impuesto. Form 1040 federal tax form La declaración correcta de los ingresos de propinas no es difícil. Form 1040 federal tax form Usted tiene que completar tres pasos: Mantener un registro diario de propinas. Form 1040 federal tax form Declarar sus propinas a su empleador. Form 1040 federal tax form Declarar todas sus propinas en su declaración de impuestos. Form 1040 federal tax form  Este capítulo le explicará estos tres pasos y le ayudará a determinar cómo completar su declaración de impuestos si no ha realizado los dos primeros pasos. Form 1040 federal tax form Este capítulo también le mostrará cómo tratar las propinas asignadas. Form 1040 federal tax form Para información sobre acuerdos y programas especiales relacionados con las propinas, vea la Publicación 531, en inglés. Form 1040 federal tax form Useful Items - You may want to see: Publicación 531 Reporting Tip Income (Cómo declarar los ingresos de propinas), en inglés 1244-PR Registro Diario de Propinas Recibidas por el(la) Empleado(a) e Informe al Patrono, en español 1244 Employee's Daily Record of Tips and Report to Employer (Registro Diario de Propinas Recibidas por el(la) Empleado(a) e Informe al Empleador), en inglés Formularios (e Instrucciones) 4137 Social Security and Medicare Tax on Unreported Tip Income (Impuestos del Seguro Social y Medicare sobre el ingreso de propinas no declaradas), en inglés 4070-PR Informe al Patrono de Propinas Recibidas por el(la) Empleado(a), disponible en español 4070 Employee's Report of Tips to Employer (Informe al Empleador de Propinas Recibidas por el(la) Empleado(a)), en inglés Cómo Mantener un Registro Diario de Propinas ¿Por qué mantener un registro diario de propinas?   Usted tiene que mantener un registro diario de propinas para que pueda: Declarar sus propinas correctamente a su empleador, Declarar sus propinas correctamente en su declaración de impuestos y Comprobar sus ingresos de propinas si se cuestiona su declaración. Form 1040 federal tax form Cómo mantener un registro diario de propinas. Form 1040 federal tax form   Hay dos maneras de mantener un registro diario de propinas. Form 1040 federal tax form Puede optar por: Anotar la información sobre sus propinas en un diario de propinas o Mantener copias de documentos que comprueben sus propinas, tales como cuentas de restaurantes y recibos de cargos hechos a tarjetas de crédito o de débito. Form 1040 federal tax form Usted debe mantener su registro diario de propinas junto con su documentación tributaria u otra documentación personal. Form 1040 federal tax form Tiene que guardar su documentación por el tiempo en que sea importante para la aplicación de la ley tributaria federal. Form 1040 federal tax form Para información sobre cuánto tiempo debe guardar esta documentación, vea el tema titulado Cuánto Tiempo Debe Mantener Los Documentos , en el capítulo 1. Form 1040 federal tax form    Si mantiene un registro de propinas, puede utilizar el Formulario 4070A-PR, Registro Diario de Propinas del(la) Empleado(a) (o el Formulario 4070-A, en inglés). Form 1040 federal tax form Para obtener el Formulario 4070A-PR (o el Formulario 4070-A), pídale al IRS o a su empleador la Publicación 1244-PR (o la Publicación 1244, en inglés). Form 1040 federal tax form Asimismo, la Publicación 1244-PR está disponible en el sitio web www. Form 1040 federal tax form irs. Form 1040 federal tax form gov/pub/irs-pdf/p1244pr. Form 1040 federal tax form pdf. Form 1040 federal tax form La Publicación 1244-PR (o la Publicación 1244, en inglés) contiene suficientes copias del Formulario 4070A-PR (o del Formulario 4070-A, en inglés) para un año. Form 1040 federal tax form Cada día, anote la información solicitada en el formulario. Form 1040 federal tax form   Además de la información solicitada en el Formulario 4070A-PR, también es necesario que mantenga un registro u otra documentación de la fecha y el valor de toda propina que reciba que no sea en efectivo, tales como boletos, pases u otros artículos de valor. Form 1040 federal tax form Aunque no declara estas propinas a su empleador, tiene que declararlas en su declaración de impuestos. Form 1040 federal tax form   Si no utiliza el Formulario 4070A-PR (o el Formulario 4070-A, en inglés), comience su registro escribiendo su nombre, el nombre de su empleador y el nombre del negocio o establecimiento donde trabaja si es distinto al nombre de su empleador. Form 1040 federal tax form Luego, cada día que trabaje, anote la fecha y la siguiente información: Propinas en efectivo que obtiene directamente de los clientes o de otros empleados. Form 1040 federal tax form Propinas de los clientes que pagan con tarjeta de crédito y de débito que su empleador le paga. Form 1040 federal tax form El valor de toda propina que haya recibido que no sea pagada en efectivo, tales como boletos, pases y otros artículos de valor. Form 1040 federal tax form La cantidad de propinas que usted le pagó a otros empleados a través de un fondo común u otro acuerdo de distribución de propinas y los nombres de los empleados a los cuales les pagó las propinas. Form 1040 federal tax form Registro electrónico de propinas. Form 1040 federal tax form   Usted puede utilizar un sistema electrónico provisto por su empleador para mantener un registro de propinas diarias. Form 1040 federal tax form En tal caso, tiene que recibir y guardar una copia en papel de este registro. Form 1040 federal tax form Cargos por servicios. Form 1040 federal tax form   No anote en su registro de propinas la cantidad de ningún cargo por servicios que su empleador añada a la cuenta de un cliente y que luego le pague a usted y que el empleador trate como salario de usted. Form 1040 federal tax form Los cargos de este tipo son parte de su salario, no son propinas. Form 1040 federal tax form Vea los ejemplos que se presentan a continuación. Form 1040 federal tax form Ejemplo 1. Form 1040 federal tax form El restaurante Buena Comida añade un cargo del 18% a la cuenta de grupos de 6 o más clientes. Form 1040 federal tax form Juanita forma parte de un grupo de 8 personas. Form 1040 federal tax form Además del costo de la comida y bebidas que se sirvieron a todos en el grupo de Juanita, la cuenta incluye un monto igual al 18% del costo de las mismas, el cual aparece en la línea para anotar propinas. Form 1040 federal tax form Dicho monto se incluye en el total de la cuenta. Form 1040 federal tax form Debido a que Juanita no tenía un derecho ilimitado de determinar el monto en la línea para anotar propinas, el cargo del 18% se considera un cargo por servicios. Form 1040 federal tax form No anote el cargo del 18% en su registro de propinas. Form 1040 federal tax form Los cargos por servicios que se le paguen son considerados salarios y no propinas. Form 1040 federal tax form Ejemplo 2. Form 1040 federal tax form El restaurante Buena Comida también incluye ejemplos de cálculos para las cantidades de propinas en la parte inferior de la cuenta para la comida y las bebidas servidas a los clientes. Form 1040 federal tax form En la parte inferior de la cuenta de David, debajo de la línea para la firma, se incluye una línea en blanco para anotar propinas, además de ejemplos de propinas calculadas en base al 15%, 18% y 20% de los costos de la comida y bebidas que le sirvieron. Form 1040 federal tax form Debido a que David tenía libertad para anotar cualquier cantidad en la línea para anotar propinas, o dejarla en blanco, cualquier cantidad que David anote se considera propina. Form 1040 federal tax form Cerciórese de incluir esta cantidad en su registro de propinas. Form 1040 federal tax form Cómo Declarar las Propinas a su Empleador ¿Por qué tiene que declarar sus propinas a su empleador?   Tiene que declarar sus propinas a su empleador para que: Éste pueda retenerle impuesto federal sobre el ingreso, impuestos del Seguro Social, impuestos de Medicare, Impuesto Adicional del Medicare o impuestos de la jubilación ferroviaria, Éste pueda declarar la cantidad correcta de sus ganancias a la Administración del Seguro Social o a la Junta de la Jubilación Ferroviaria (lo cual afecta sus beneficios cuando se jubile o si queda incapacitado, o los beneficios de su familia cuando usted fallezca) y Usted pueda evitar la Multa por no declarar las propinas a su empleador (tema explicado más adelante). Form 1040 federal tax form Propinas que tiene que declarar a su empleador. Form 1040 federal tax form   Declárele a su empleador solamente las propinas que reciba en efectivo, en cheques, tarjetas de débito y de crédito. Form 1040 federal tax form   Si el total de las propinas que reciba de un trabajo en un mes determinado es menos de $20, no declare las propinas de ese mes a ese empleador. Form 1040 federal tax form   Si recibe propinas conforme a un acuerdo para compartir propinas equitativamente, declare sólo las propinas que reciba y retenga. Form 1040 federal tax form No declare a su empleador ninguna parte de las propinas que reciba para luego entregárselas a otros empleados. Form 1040 federal tax form Sin embargo, tiene que declarar las propinas que reciba de otros empleados. Form 1040 federal tax form    No declare a su empleador el valor de las propinas que no reciba en efectivo, tales como boletos o pases. Form 1040 federal tax form No se pagan impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuestos de la jubilación ferroviaria sobre estas propinas. Form 1040 federal tax form Cómo se declaran las propinas. Form 1040 federal tax form    Si su empleador no le proporciona otro medio para declarar las propinas, puede usar el Formulario 4070-PR, en español (o el Formulario 4070, en inglés). Form 1040 federal tax form Escriba la información requerida en el formulario, incluya su firma y la fecha y entrégueselo a su empleador. Form 1040 federal tax form Si desea obtener copias del formulario para un año completo, comuníquese con el IRS o pídale a su empleador la Publicación 1244-PR (o la Publicación 1244, en inglés). Form 1040 federal tax form   Si no usa el Formulario 4070-PR (o el Formulario 4070, en inglés), entréguele a su empleador un informe con la información siguiente: Su nombre, dirección y número de Seguro Social. Form 1040 federal tax form El nombre de su empleador, la dirección y el nombre del establecimiento (si es diferente al nombre del empleador). Form 1040 federal tax form El mes (o las fechas de cualquier período más corto) en el cual usted recibió propinas. Form 1040 federal tax form El total de propinas que se tienen que declarar para ese período. Form 1040 federal tax form Usted tiene que firmar y fechar el informe. Form 1040 federal tax form Cerciórese de guardar una copia junto con sus documentos tributarios u otros documentos personales. Form 1040 federal tax form   Su empleador puede requerirle que declare sus propinas más de una vez al mes. Form 1040 federal tax form Sin embargo, el informe no puede abarcar un período mayor de un mes natural. Form 1040 federal tax form Informe electrónico de propinas. Form 1040 federal tax form   Su empleador puede exigir que facilite su informe de propinas por medios electrónicos. Form 1040 federal tax form Cuándo debe declarar las propinas. Form 1040 federal tax form   Entregue a su empleador el informe correspondiente a cada mes, a más tardar el día 10 del mes siguiente. Form 1040 federal tax form Si el día 10 cae en sábado, domingo o día feriado legal, entonces entréguele el informe a su empleador el próximo día siempre que no sea sábado, domingo o día feriado legal. Form 1040 federal tax form Ejemplo. Form 1040 federal tax form Tiene que declararle a su empleador la cantidad de propinas que recibió en septiembre del año 2014 a más tardar el día 10 de octubre de 2014. Form 1040 federal tax form Declaración final. Form 1040 federal tax form   Si deja de trabajar durante el mes, puede declarar las propinas recibidas cuando termine su empleo. Form 1040 federal tax form Multa por no declarar las propinas. Form 1040 federal tax form   Si no le declara a su empleador las propinas que recibió, tal como se requiere, puede estar sujeto a que se le imponga una multa equivalente al 50% de los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria que adeude sobre las propinas que no declaró. Form 1040 federal tax form (Para información sobre estos impuestos, vea Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos, más adelante). Form 1040 federal tax form La cantidad de la multa que se impone es adicional a los impuestos que adeude. Form 1040 federal tax form   Puede evitar que esta multa le sea impuesta si puede demostrar que existe causa razonable por la cual no le declaró las propinas a su empleador. Form 1040 federal tax form Para hacerlo, adjunte un documento escrito a su declaración de impuestos explicando la razón por la cual no declaró la cantidad de propinas que recibió. Form 1040 federal tax form Entrega de dinero al empleador para el pago de los impuestos. Form 1040 federal tax form   Es posible que lo que gana normalmente no sea suficiente para que su empleador le retenga todos los impuestos que adeude sobre su salario normal más las propinas que recibe. Form 1040 federal tax form Si esto ocurre, puede entregarle dinero a su empleador hasta el cierre del año natural para pagar el resto de los impuestos. Form 1040 federal tax form   Si no le entrega dinero suficiente a su empleador, el mismo aplicará su salario normal y todo dinero que usted le entregue para los impuestos, en el orden siguiente: Todos los impuestos sobre su salario normal. Form 1040 federal tax form Los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuestos de la jubilación ferroviaria sobre las propinas que declaró. Form 1040 federal tax form Los impuestos federales, estatales y locales sobre los ingresos sobre las propinas que declaró. Form 1040 federal tax form    Su empleador puede descontar de su próximo salario todo impuesto que quede pendiente. Form 1040 federal tax form Si al final del año aún no se le han retenido suficientes impuestos, usted puede estar sujeto a una multa por pago insuficiente de impuestos estimados. Form 1040 federal tax form Vea la Publicación 505, Tax Withholding and Estimated Tax (Retención de impuestos e impuesto estimado), en inglés, para más información. Form 1040 federal tax form    Impuestos no recaudados. Form 1040 federal tax form Usted tiene que informar en su declaración de impuestos todo impuesto del Seguro Social y Medicare o impuestos de la jubilación ferroviaria que no se recaudaron al final del año 2013. Form 1040 federal tax form Estos impuestos no recaudados aparecerán en su Formulario W-2 del año 2013. Form 1040 federal tax form Vea el tema titulado Cómo se declaran los impuestos no recaudados del Seguro Social, Medicare o impuesto de la jubilación ferroviaria sobre propinas declaradas a su empleador , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos, a continuación. Form 1040 federal tax form Cómo se Declaran las Propinas en la Declaración de Impuestos Cómo se declaran las propinas. Form 1040 federal tax form    Declare las propinas que recibió junto con su salario en la línea 7 del Formulario 1040, la línea 7 del Formulario 1040A o en la línea 1 del Formulario 1040EZ. Form 1040 federal tax form Qué propinas se tienen que declarar. Form 1040 federal tax form   Usted tiene que informar en su declaración de impuestos todas las propinas que recibió en 2013. Form 1040 federal tax form Incluya las que recibió en efectivo y las que no fueron en efectivo. Form 1040 federal tax form Toda propina que usted haya declarado en 2013 a su empleador está incluida en los salarios que aparecen en el recuadro 1 de su Formulario W-2. Form 1040 federal tax form Sume a la cantidad del recuadro 1 solamente las propinas que usted no le declaró a su empleador. Form 1040 federal tax form    Si recibió $20 o más en propinas en efectivo o cargadas a tarjetas de crédito o débito en un mes y no las declaró a su empleador, vea más adelante el tema titulado Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador . Form 1040 federal tax form    Si usted no llevó un registro diario de las propinas que recibió, tal como se requiere, y aparece una cantidad en el recuadro 8 del Formulario W-2, vea más adelante la sección titulada Asignación de Propinas . Form 1040 federal tax form   Si usted llevó un registro diario y declaró a su empleador todas las propinas que recibió, tal como se requiere conforme a las reglas explicadas anteriormente, añada a la cantidad que aparece en el recuadro 1 de su Formulario W-2 las siguientes propinas: Las propinas que recibió tanto en efectivo como cargadas a tarjetas de crédito o débito que fueron menos de $20 en un mes cualquiera. Form 1040 federal tax form El valor de las propinas que no recibió en efectivo, tales como boletos, pases u otros artículos de valor. Form 1040 federal tax form Ejemplo. Form 1040 federal tax form Mariano Almendares comenzó a trabajar en el Restaurante Océano Azul (su único empleador en el año 2013) el día 30 de junio y recibió $10,000 en salarios durante el año. Form 1040 federal tax form Mariano llevó un registro diario de las propinas que recibió durante el año, el cual muestra que en junio recibió $18 en propinas y en el resto del año recibió $7,000 en propinas. Form 1040 federal tax form Al Sr. Form 1040 federal tax form Almendares no se le requirió declararle a su empleador las propinas que recibió en junio, pero sí le declaró todas las propinas que recibió durante el resto del año, tal como se requiere. Form 1040 federal tax form El Formulario W-2 que el Sr. Form 1040 federal tax form Almendares recibió del Restaurante Océano Azul muestra $17,000 ($10,000 de salario más $7,000 de propinas declaradas) en el recuadro 1. Form 1040 federal tax form El Sr. Form 1040 federal tax form Almendares añade a esa cantidad los $18 de propinas que no le declaró al empleador y declara $17,018 como salario en su declaración de impuestos. Form 1040 federal tax form Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador. Form 1040 federal tax form    Si en un mes recibió $20 o más en propinas en efectivo o cargadas a tarjetas de crédito o débito en algún empleo y no declaró todas esas propinas a su empleador, tiene que declarar como impuesto adicional los impuestos del Seguro Social, Medicare e Impuesto Adicional del Medicare sobre las propinas que no declaró a su empleador. Form 1040 federal tax form Para declarar estos impuestos, tiene que presentar una declaración aunque de otro modo no tuviera que presentarla. Form 1040 federal tax form Para hacerlo, tiene que usar el Formulario 1040. Form 1040 federal tax form (No puede presentar el Formulario 1040EZ ni el Formulario 1040A). Form 1040 federal tax form    Use el Formulario 4137, Social Security and Medicare Tax on Unreported Tip Income (Impuestos del Seguro Social y de Medicare sobre el ingreso de propinas no declaradas), en inglés, para calcular los impuestos al Seguro Social y al Medicare. Form 1040 federal tax form Anote el impuesto en su declaración como se indica y adjunte el Formulario 4137 debidamente completado a la misma. Form 1040 federal tax form Use el Formulario 8959, en inglés, para calcular el Impuesto Adicional del Medicare. Form 1040 federal tax form    Si usted está sujeto a la Railroad Retirement Tax Act (Ley Tributaria para la Jubilación Ferroviaria), no puede utilizar el Formulario 4137 para pagar el impuesto para la jubilación ferroviaria sobre propinas no declaradas. Form 1040 federal tax form Para obtener crédito para la jubilación ferroviaria, tiene que declarar sus propinas a su empleador. Form 1040 federal tax form Cómo se declaran los impuestos no recaudados del Seguro Social, Medicare o impuesto de la jubilación ferroviaria sobre propinas declaradas a su empleador. Form 1040 federal tax form   Usted podría tener impuestos sin recaudar si su salario normal no es suficiente para que su empleador retenga todos los impuestos adeudados y si no le dio a su empleador dinero suficiente para pagar el resto de los impuestos. Form 1040 federal tax form Para más información, vea Entrega de dinero al empleador para el pago de los impuestos , bajo Cómo Declarar las Propinas a su Empleador, anteriormente. Form 1040 federal tax form   Si su empleador no pudo recaudar todos los impuestos al Seguro Social y al Medicare o impuesto de la jubilación ferroviaria que usted adeuda sobre propinas declaradas para 2013, los impuestos por recaudar se mostrarán en el recuadro 12 del Formulario W-2 (códigos A y B). Form 1040 federal tax form Tiene que declarar estas cantidades como impuesto adicional en su declaración. Form 1040 federal tax form A diferencia de la parte no recaudada del impuesto regular al Medicare (1. Form 1040 federal tax form 45%), el Impuesto Adicional del Medicare no recaudado no se declara en el recuadro 12 del Formulario W-2 con el código B. Form 1040 federal tax form    Para declarar estos impuestos no recaudados, tiene que presentar una declaración aunque no tuviera que presentarla de otro modo. Form 1040 federal tax form Tiene que declarar estos impuestos en la línea 60 del Formulario 1040. Form 1040 federal tax form Vea las instrucciones para la línea 60 del Formulario 1040, disponibles en inglés. Form 1040 federal tax form (No puede presentar el Formulario 1040EZ ni el Formulario 1040A). Form 1040 federal tax form Asignación de Propinas Si su empleador le asignó propinas, las mismas aparecen por separado en el recuadro 8 de su Formulario W-2. Form 1040 federal tax form Estas propinas no están incluidas en el recuadro 1 con sus salarios y propinas declaradas. Form 1040 federal tax form Si el recuadro 8 está en blanco, lo que se explica en esta sección no es aplicable en su caso. Form 1040 federal tax form ¿Qué son propinas asignadas?   Éstas son propinas que su empleador le asignó, además de las que usted le declaró para el año. Form 1040 federal tax form Su empleador habrá hecho esto únicamente si: Usted trabajó en un establecimiento (restaurante, bar o negocio similar) que tiene que asignar las propinas a los empleados y La cantidad de propinas que declaró a su empleador fue menos de su parte del 8% de las ventas de comidas y bebidas del establecimiento donde usted trabajó. Form 1040 federal tax form De las propinas asignadas, no se retienen impuestos sobre los ingresos, Seguro Social, Medicare, Impuesto Adicional del Medicare ni impuestos de la jubilación ferroviaria. Form 1040 federal tax form ¿Cómo se calcula su asignación de propinas?   Las propinas que se le asignan a usted son su parte de una cantidad calculada restando las propinas declaradas de todos los empleados del 8% (u otra tasa más baja aprobada) de las ventas de comida y bebida (que no sean ventas de comida para llevar por los clientes o ventas con un cargo por servicio del 10% o más). Form 1040 federal tax form Su parte de esa cantidad fue calculada utilizando un método provisto por un acuerdo laboral entre empleador y empleado o por un método provisto por los reglamentos del IRS basado en las ventas hechas o las horas trabajadas por los empleados. Form 1040 federal tax form Para más información sobre el método de asignación exacto utilizado, consulte a su empleador. Form 1040 federal tax form ¿Tiene que incluir en la declaración sus propinas asignadas?   Tiene que incluir en la declaración de impuestos todas las propinas que recibió en 2013, incluyendo las propinas pagadas en efectivo como las no pagadas en efectivo. Form 1040 federal tax form Todas las propinas que usted haya declarado en 2013 a su empleador están incluidas en los salarios que aparecen en el recuadro 1 de su Formulario W-2. Form 1040 federal tax form Sume a la cantidad del recuadro 1 solamente las propinas que usted no le declaró a su empleador. Form 1040 federal tax form Esto tiene que incluir toda propina asignada mostrada en el recuadro 8 de su(s) Formulario(s) W-2, a menos que tenga registros confiables que muestren que recibió menos propinas en el año que las cifras asignadas. Form 1040 federal tax form   Vea los temas titulados Qué propinas se tienen que declarar , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos y Cómo Mantener un Registro Diario de Propinas , anteriormente. Form 1040 federal tax form Cómo declarar las propinas asignadas. Form 1040 federal tax form   Declare la cantidad en el recuadro 1 y las propinas asignadas en el recuadro 8 de su(s) Formulario(s) W-2 como salario en la línea 7 del Formulario 1040, en la línea 8 del Formulario 1040NR o en la línea 3 del Formulario 1040NR-EZ. Form 1040 federal tax form (No puede presentar el Formulario 1040A ni el Formulario 1040EZ cuando se tienen propinas asignadas). Form 1040 federal tax form    Debido a que los impuestos del Seguro Social, Medicare o Impuesto Adicional del Medicare no fueron retenidos de las propinas asignadas, tiene que declararlos como impuestos adicionales en su declaración. Form 1040 federal tax form Complete el Formulario 4137 e incluya las propinas asignadas en la línea 1 del formulario. Form 1040 federal tax form Vea Cómo declarar los impuestos del Seguro Social, Medicare, Impuesto Adicional del Medicare o impuesto de la jubilación ferroviaria sobre las propinas no declaradas a su empleador , bajo Cómo se Declaran las Propinas en la Declaración de Impuestos. Form 1040 federal tax form Prev  Up  Next   Home   More Online Publications
Español

Bureau of Alcohol, Tobacco, Firearms, and Explosives

The Bureau of Alcohol, Tobacco, Firearms, and Explosives enforces federal criminal laws regulating the firearms and explosives industries.

Contact the Agency or Department

Website: Bureau of Alcohol, Tobacco, Firearms, and Explosives

E-mail:

Address: 99 New York Avenue, NE, Room 5S 144
Washington, DC 20226

Phone Number: (202) 648-7777

Toll-free: (800) 800-3855

Text Message: Text ATF + your message to 274637

Forms: Bureau of Alcohol, Tobacco, Firearms, and Explosives Forms

The Form 1040 Federal Tax Form

Form 1040 federal tax form 4. Form 1040 federal tax form   Other Section 501(c) Organizations Table of Contents Introduction 501(c)(4) - Civic Leagues and Social Welfare OrganizationsSpecific Organizations 501(c)(5) - Labor, Agricultural and Horticultural OrganizationsLabor Organizations Agricultural and Horticultural Organizations 501(c)(6) - Business Leagues, etc. Form 1040 federal tax form Line of business. Form 1040 federal tax form Examples. Form 1040 federal tax form Improvement of business conditions. Form 1040 federal tax form Exception for local legislation. Form 1040 federal tax form De minimis exception. Form 1040 federal tax form Grass roots lobbying. Form 1040 federal tax form 501(c)(7) - Social and Recreation ClubsLimited membership. Form 1040 federal tax form Support. Form 1040 federal tax form Facilities open to public. Form 1040 federal tax form Gross receipts from nonmembership sources. Form 1040 federal tax form Gross receipts. Form 1040 federal tax form Nontraditional activities. Form 1040 federal tax form 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal SocietiesFraternal Beneficiary Societies (501(c)(8)) Domestic Fraternal Societies (501(c)(10)) 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' AssociationsLocal Employees' Associations (501(c)(4)) Voluntary Employees' Beneficiary Associations (501(c)(9)) Supplemental Unemployment Benefit Trusts (501(c)(17)) 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like OrganizationsMembership. Form 1040 federal tax form Losses and expenses. Form 1040 federal tax form Distributions of proceeds. Form 1040 federal tax form The 85% Requirement Local Life Insurance Associations Mutual or Cooperative Associations 501(c)(13) - Cemetery CompaniesBuying cemetery property. Form 1040 federal tax form Perpetual care organization. Form 1040 federal tax form Care of individual plots. Form 1040 federal tax form 501(c)(14) - Credit Unions and Other Mutual Financial OrganizationsState-Chartered Credit Unions Other Mutual Financial Organizations 501(c)(19) - Veterans' Organizations 501(c)(20) - Group Legal Services Plan Organizations 501(c)(21) - Black Lung Benefit TrustsExcise taxes. Form 1040 federal tax form 501(c)(2) - Title-Holding Corporations for Single Parent CorporationsExpenses. Form 1040 federal tax form Waiver of payment of income. Form 1040 federal tax form 501(c)(25) - Title-Holding Corporations or Trusts for Multiple Parent CorporationsUnrelated Business Income 501(c)(26) - State-Sponsored High-Risk Health Coverage Organizations 501(c)(27) - Qualified State-Sponsored Workers' Compensation Organizations 501(c)(29) - CO-OP Health Insurance Issuers New Guidance for IRC 501(c)(29) Qualified Nonprofit Health Insurance Issuers General Requirements for Exemption under 501(c)(29) and Annual Filing Requirement Additional Guidance for Prospective 501(c)(29) Organizations Introduction This chapter contains specific information for certain organizations described in section 501(c), other than those organizations that are described in section 501(c)(3). Form 1040 federal tax form Section 501(c)(3) organizations are covered in chapter 3 of this publication. Form 1040 federal tax form The Table of Contents at the beginning of this publication, as well as the Organization Reference Chart, may help you locate at a glance the type of organization discussed in this chapter. Form 1040 federal tax form 501(c)(4) - Civic Leagues and Social Welfare Organizations If your organization is not organized for profit and will be operated primarily to promote social welfare to benefit the community, you should file Form 1024 to apply for recognition of exemption from federal income tax under section 501(c)(4). Form 1040 federal tax form The discussion that follows describes the information you must provide when applying. Form 1040 federal tax form For application procedures, see chapter 1. Form 1040 federal tax form To qualify for exemption under section 501(c)(4), the organization's net earnings must be devoted primarily to charitable, educational, or recreational purposes. Form 1040 federal tax form In addition, no part of the organization's net earnings can inure to the benefit of any private shareholder or individual. Form 1040 federal tax form If the organization provides an excess benefit to certain persons, an excise tax may be imposed. Form 1040 federal tax form See Excise tax on excess benefit transactions , under Excess Benefit Transactions in chapter 5 for more information about this tax. Form 1040 federal tax form Examples. Form 1040 federal tax form   Types of organizations that are considered to be social welfare organizations are civic associations and volunteer fire companies. Form 1040 federal tax form Nonprofit operation. Form 1040 federal tax form   You must submit evidence that your organization is organized and will be operated on a nonprofit basis. Form 1040 federal tax form However, such evidence, including the fact that your organization is organized under a state law relating to nonprofit corporations, will not in itself establish a social welfare purpose. Form 1040 federal tax form Social welfare. Form 1040 federal tax form   To establish that your organization is organized primarily to promote social welfare, you should submit evidence with your application showing that your organization will operate primarily to further (in some way) the common good and general welfare of the people of the community (such as by bringing about civic betterment and social improvements). Form 1040 federal tax form   An organization that restricts the use of its facilities to employees of selected corporations and their guests is primarily benefiting a private group rather than the community. Form 1040 federal tax form It therefore does not qualify as a section 501(c)(4) organization. Form 1040 federal tax form Similarly, an organization formed to represent member-tenants of an apartment complex does not qualify, since its activities benefit the member-tenants and not all tenants in the community. Form 1040 federal tax form However, an organization formed to promote the legal rights of all tenants in a particular community may qualify under section 501(c)(4) as a social welfare organization. Form 1040 federal tax form Political activity. Form 1040 federal tax form   Promoting social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office. Form 1040 federal tax form However, if you submit proof that your organization is organized primarily to promote social welfare, it can obtain exemption even if it participates legally in some political activity on behalf of or in opposition to candidates for public office. Form 1040 federal tax form See the discussion in chapter 2 under Political Organization Income Tax Return . Form 1040 federal tax form Social or recreational activity. Form 1040 federal tax form   If social activities will be the primary purpose of your organization, you should not file an application for exemption as a social welfare organization but should file for exemption as a social club described in section 501(c)(7). Form 1040 federal tax form Retirement benefit program. Form 1040 federal tax form   An organization established by its members that has as its primary activity providing supplemental retirement benefits to its members or death benefits to their beneficiaries does not qualify as an exempt social welfare organization. Form 1040 federal tax form It may qualify under another paragraph of section 501(c) depending on all the facts. Form 1040 federal tax form   However, a nonprofit association that is established, maintained, and funded by a local government to provide the only retirement benefits to a class of employees may qualify as a social welfare organization under section 501(c)(4). Form 1040 federal tax form Tax treatment of donations. Form 1040 federal tax form   Donations to volunteer fire companies are deductible on the donor's federal income tax return, but only if made for exclusively public purposes. Form 1040 federal tax form Contributions to civic leagues or other section 501(c)(4) organizations generally are not deductible as charitable contributions for federal income tax purposes. Form 1040 federal tax form They may be deductible as trade or business expenses, if ordinary and necessary in the conduct of the taxpayer's business. Form 1040 federal tax form However, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. Form 1040 federal tax form for more information. Form 1040 federal tax form For more information on social welfare organizations, see Life Cycle of a Social Welfare Organization at IRS. Form 1040 federal tax form gov. Form 1040 federal tax form Specific Organizations The following information should be contained in the application form and accompanying statements of certain types of civic leagues or social welfare organizations. Form 1040 federal tax form Volunteer fire companies. Form 1040 federal tax form   If your organization wishes to obtain exemption as a volunteer fire company or similar organization, you should submit evidence that its members are actively engaged in fire fighting and similar disaster assistance, whether it actually owns the fire fighting equipment, and whether it provides any assistance for its members, such as death and medical benefits in case of injury to them. Form 1040 federal tax form   If your organization does not have an independent social purpose, such as providing recreational facilities for members, it may be exempt under section 501(c)(3). Form 1040 federal tax form In this event, your organization should file Form 1023. Form 1040 federal tax form Homeowners' associations. Form 1040 federal tax form   A membership organization formed by a real estate developer to own and maintain common green areas, streets, and sidewalks and to enforce covenants to preserve the appearance of the development should show that it is operated for the benefit of all the residents of the community. Form 1040 federal tax form The term community generally refers to a geographical unit recognizable as a governmental subdivision, unit, or district thereof. Form 1040 federal tax form Whether a particular association meets the requirement of benefiting a community depends on the facts and circumstances of each case. Form 1040 federal tax form Even if an area represented by an association is not a community, the association can still qualify for exemption if its activities benefit a community. Form 1040 federal tax form   The association should submit evidence that areas such as roadways and park land that it owns and maintains are open to the general public and not just its own members. Form 1040 federal tax form It also must show that it does not engage in exterior maintenance of private homes. Form 1040 federal tax form   A homeowners' association that is not exempt under section 501(c)(4) and that is a condominium management association, a residential real estate management association, or a timeshare association generally can elect under the provisions of section 528 to receive certain tax benefits that, in effect, permit it to exclude its exempt function income from its gross income. Form 1040 federal tax form Other organizations. Form 1040 federal tax form   Other nonprofit organizations that qualify as social welfare organizations include: An organization operating an airport that is on land owned by a local government, which supervises the airport's operation, and that serves the general public in an area with no other airport, A community association that works to improve public services, housing, and residential parking; publishes a free community newspaper; sponsors a community sports league, holiday programs, and meetings; and contracts with a private security service to patrol the community, A community association devoted to preserving the community's traditions, architecture, and appearance by representing it before the local legislature and administrative agencies in zoning, traffic, and parking matters, An organization that tries to encourage industrial development and relieve unemployment in an area by making loans to businesses so they will relocate to the area, and An organization that holds an annual festival of regional customs and traditions. Form 1040 federal tax form 501(c)(5) - Labor, Agricultural and Horticultural Organizations If you are a member of an organization that wants to obtain recognition of exemption from federal income tax as a labor, agricultural, or horticultural organization, you should submit an application on Form 1024. Form 1040 federal tax form You must indicate in your application for exemption and accompanying statements that no part of the organization's net earnings will inure to the benefit of any member. Form 1040 federal tax form In addition, you should follow the procedure for obtaining recognition of exempt status described in chapter 1. Form 1040 federal tax form Submit any additional information that may be required, as described in this section. Form 1040 federal tax form Tax treatment of donations. Form 1040 federal tax form   Contributions to labor, agricultural, and horticultural organizations are not deductible as charitable contributions on the donor's federal income tax return. Form 1040 federal tax form However, such payments may be deductible as business expenses if they are ordinary and necessary in the conduct of the taxpayer's trade or business. Form 1040 federal tax form For more information about certain limits affecting the deductibility of these business expenses, see Deduction not allowed for dues used for political or legislative activities , under 501(c)(6) - Business Leagues, etc. Form 1040 federal tax form Labor Organizations A labor organization is an association of workers who have combined to protect and promote the interests of the members by bargaining collectively with their employers to secure better working conditions. Form 1040 federal tax form To show that your organization has the purpose of a labor organization, you should include in the articles of organization or accompanying statements (submitted with your exemption application) information establishing that the organization is organized to better the conditions of workers, improve the grade of their products, and develop a higher degree of efficiency in their respective occupations. Form 1040 federal tax form In addition, no net earnings of the organization can inure to the benefit of any member. Form 1040 federal tax form Composition of membership. Form 1040 federal tax form   While a labor organization generally is composed of employees or representatives of the employees (in the form of collective bargaining agents) and similar employee groups, evidence that an organization's membership consists mainly of workers does not in itself indicate an exempt purpose. Form 1040 federal tax form You must show in your application that your organization has the purposes described in the preceding paragraph. Form 1040 federal tax form These purposes can be accomplished by a single labor organization acting alone or by several organizations acting together through a separate organization. Form 1040 federal tax form Benefits to members. Form 1040 federal tax form   The payment by a labor organization of death, sick, accident, and similar benefits to its individual members with funds contributed by its members, if made under a plan to better the conditions of the members, does not preclude exemption as a labor organization. Form 1040 federal tax form However, an organization does not qualify for exemption as a labor organization if it has no authority to represent members in job-related matters, even if it provides weekly income to its members in the event of a lawful strike by the members' union, in return for an annual payment by the member. Form 1040 federal tax form   For more information on labor organizations, see Life Cycle of a Labor Organization at IRS. Form 1040 federal tax form gov. Form 1040 federal tax form Agricultural and Horticultural Organizations Agricultural and horticultural organizations are connected with raising livestock, forestry, cultivating land, raising and harvesting crops or aquatic resources, cultivating useful or ornamental plants, and similar pursuits. Form 1040 federal tax form For the purpose of these provisions, aquatic resources include only animal or vegetable life, but not mineral resources. Form 1040 federal tax form The term harvesting, in this case, includes fishing and related pursuits. Form 1040 federal tax form Agricultural organizations can be quasi-public in character and are often designed to encourage the development of better agricultural and horticultural products through a system of awards, using income from entry fees, gate receipts, and donations to meet the necessary expenses of upkeep and operation. Form 1040 federal tax form When the activities are directed toward the improvement of marketing or other business conditions in one or more lines of business, rather than the improvement of production techniques or the betterment of the conditions of persons engaged in agriculture, the organization must qualify for exemption as a business league, board of trade, or other organization, as discussed next in the section on 501(c)(6) organizations. Form 1040 federal tax form The primary purpose of exempt agricultural and horticultural organizations must be to better the conditions of those engaged in agriculture or horticulture, develop more efficiency in agriculture or horticulture, or improve the products. Form 1040 federal tax form The following list contains some examples of activities that show an agricultural or horticultural purpose. Form 1040 federal tax form Promoting various cooperative agricultural, horticultural, and civic activities among rural residents by a state, farm, or home bureau. Form 1040 federal tax form Exhibiting livestock, farm products, and other characteristic features of agriculture and horticulture. Form 1040 federal tax form Testing soil for members and nonmembers of the farm bureau on a cost basis, the results of the tests and other recommendations being furnished to the community members to educate them in soil treatment. Form 1040 federal tax form Guarding the purity of a specific breed of livestock. Form 1040 federal tax form Encouraging improvements in the production of fish on privately owned fish farms. Form 1040 federal tax form Negotiating with processors for the price to be paid to members for their crops. Form 1040 federal tax form For more information on agricultural or horticultural organizations, see Life Cycle of an Agricultural or Horticultural Organization at IRS. Form 1040 federal tax form gov. Form 1040 federal tax form 501(c)(6) - Business Leagues, etc. Form 1040 federal tax form If your association wants to apply for recognition of exemption from federal income tax as a nonprofit business league, chamber of commerce, real estate board, or board of trade, it should file Form 1024. Form 1040 federal tax form For a discussion of the procedure to follow, see chapter 1. Form 1040 federal tax form Your organization must indicate in its application form and attached statements that no part of its net earnings will inure to the benefit of any private shareholder or individual and that it is not organized for profit or organized to engage in an activity ordinarily carried on for profit (even if the business is operated on a cooperative basis or produces only sufficient income to be self-sustaining). Form 1040 federal tax form In addition, your organization must be primarily engaged in activities or functions that are the basis for its exemption. Form 1040 federal tax form It must be primarily supported by membership dues and other income from activities substantially related to its exempt purpose. Form 1040 federal tax form A business league, in general, is an association of persons having some common business interest, the purpose of which is to promote that common interest and not to engage in a regular business of a kind ordinarily carried on for profit. Form 1040 federal tax form Trade associations and professional associations are considered business leagues. Form 1040 federal tax form Chamber of commerce. Form 1040 federal tax form   A chamber of commerce usually is composed of the merchants and traders of a city. Form 1040 federal tax form Board of trade. Form 1040 federal tax form   A board of trade often consists of persons engaged in similar lines of business. Form 1040 federal tax form For example, a nonprofit organization formed to regulate the sale of a specified agricultural commodity to assure equal treatment of producers, warehouse workers, and buyers is a board of trade. Form 1040 federal tax form   Chambers of commerce and boards of trade usually promote the common economic interests of all the commercial enterprises in a given trade community. Form 1040 federal tax form Real estate board. Form 1040 federal tax form   A real estate board consists of members interested in improving the business conditions in the real estate field. Form 1040 federal tax form It is not organized for profit and no part of the net earnings inures to the benefit of any private shareholder or individual. Form 1040 federal tax form Professional football leagues. Form 1040 federal tax form   The Internal Revenue Code specifically defines professional football leagues as exempt organizations under section 501(c)(6). Form 1040 federal tax form They are exempt whether or not they administer a pension fund for football players. Form 1040 federal tax form General purpose. Form 1040 federal tax form   You must indicate in the material submitted with your application that your organization will be devoted to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons. Form 1040 federal tax form It must be shown that the conditions of a particular trade or the interests of the community will be advanced. Form 1040 federal tax form Merely indicating the name of the organization or the object of the local statute under which it is created is not enough to demonstrate the required general purpose. Form 1040 federal tax form Line of business. Form 1040 federal tax form   This term generally refers either to an entire industry or to all components of an industry within a geographic area. Form 1040 federal tax form It does not include a group composed of businesses that market a particular brand within an industry. Form 1040 federal tax form Common business interest. Form 1040 federal tax form   A common business interest of all members of the organization must be established by the application documents. Form 1040 federal tax form Examples. Form 1040 federal tax form   Activities that would tend to illustrate a common business interest are: Promotion of higher business standards and better business methods and encouragement of uniformity and cooperation by a retail merchants association, Education of the public in the use of credit, Establishment of uniform casualty rates and compilation of statistical information by an insurance rating bureau operated by casualty insurance companies, Establishment and maintenance of the integrity of a local commercial market, Operation of a trade publication primarily intended to benefit an entire industry, and Encouragement of the use of goods and services of an entire industry (such as a lawyer referral service whose main purpose is to introduce individuals to the use of the legal profession in the hope that they will enter into lawyer-client relationships on a paying basis as a result). Form 1040 federal tax form Improvement of business conditions. Form 1040 federal tax form   Generally, this must be shown to be the purpose of the organization. Form 1040 federal tax form This is not established by evidence of particular services that provide a convenience or economy to individual members in their businesses, such as advertising that carries the name of members, interest-free loans, assigning exclusive franchise areas, operation of a real estate multiple listing system, or operation of a credit reporting agency. Form 1040 federal tax form Stock or commodity exchange. Form 1040 federal tax form   A stock or commodity exchange is not a business league, chamber of commerce, real estate board, or board of trade and is not exempt under section 501(c)(6). Form 1040 federal tax form Legislative activity. Form 1040 federal tax form   An organization that is exempt under section 501(c)(6) can work for the enactment of laws to advance the common business interests of the organization's members. Form 1040 federal tax form Deduction not allowed for dues used for political or legislative activities. Form 1040 federal tax form   A taxpayer cannot deduct the part of dues or other payments to a business league, trade association, labor union, or similar organization that is reported to the taxpayer by the organization as having been used for any of the following activities. Form 1040 federal tax form Influencing legislation. Form 1040 federal tax form Participating or intervening in a political campaign for, or against, any candidate for public office. Form 1040 federal tax form Trying to influence the general public, or part of the general public, with respect to elections, legislative matters, or referendums (also known as grass roots lobbying). Form 1040 federal tax form Communicating directly with certain executive branch officials to try to influence their official actions or positions. Form 1040 federal tax form See Dues Used for Lobbying or Political Activities under Required Disclosures in chapter 2 for more information. Form 1040 federal tax form Exception for local legislation. Form 1040 federal tax form   Members can deduct dues (or assessments) to an organization that are for expenses of: Appearing before, submitting statements to, or sending communications to members of a local council or similar governing body with respect to legislation or proposed legislation of direct interest to the member, or Communicating information between the member and the organization with respect to local legislation or proposed legislation of direct interest to the organization or the member. Form 1040 federal tax form Legislation or proposed legislation is of direct interest to a taxpayer if it will, or can reasonably be expected to, affect the taxpayer's trade or business. Form 1040 federal tax form De minimis exception. Form 1040 federal tax form   In-house expenditures of $2,000 or less for the year for activities (1) – (4) listed earlier will not prevent a deduction for dues if the dues meet all other tests to be deductible as a business expense. Form 1040 federal tax form Grass roots lobbying. Form 1040 federal tax form   A tax-exempt trade association, labor union, or similar organization is considered to be engaging in grass roots lobbying if it contacts prospective members or calls upon its own members to contact their employees and customers for the purpose of urging such persons to communicate with their elected state or Congressional representatives to support the promotion, defeat, or repeal of legislation that is of direct interest to the organization. Form 1040 federal tax form Any dues or assessments directly related to such activities are not deductible by the taxpayer, since the individuals being contacted, who are not members of the organization, are a segment of the general public. Form 1040 federal tax form Tax treatment of donations. Form 1040 federal tax form   Contributions to organizations described in this section are not deductible as charitable contributions on the donor's federal income tax return. Form 1040 federal tax form They may be deductible as trade or business expenses if ordinary and necessary in the conduct of the taxpayer's business. Form 1040 federal tax form   For more information on business leagues, see Life Cycle of a Business League (Trade Association) on IRS. Form 1040 federal tax form gov. Form 1040 federal tax form 501(c)(7) - Social and Recreation Clubs If your club is organized for pleasure, recreation, and other similar nonprofitable purposes and substantially all of its activities are for these purposes, it should file Form 1024 to apply for recognition of exemption from federal income tax. Form 1040 federal tax form In applying for recognition of exemption, you should submit the information described in this section. Form 1040 federal tax form Also see chapter 1 for the procedures to follow. Form 1040 federal tax form Typical organizations that should file for recognition of exemption as social clubs include: College alumni associations that are not described in chapter 3 under Alumni association , College fraternities or sororities operating chapter houses for students, Country clubs, Amateur hunting, fishing, tennis, swimming, and other sport clubs, Dinner clubs that provide a meeting place, library, and dining room for members, Hobby clubs, Garden clubs, and Variety clubs. Form 1040 federal tax form Discrimination prohibited. Form 1040 federal tax form   Your organization will not be recognized as tax exempt if its charter, bylaws, or other governing instrument, or any written policy statement provides for discrimination against any person on the basis of race, color, or religion. Form 1040 federal tax form   However, a club that in good faith limits its membership to the members of a particular religion to further the teachings or principles of that religion and not to exclude individuals of a particular race or color will not be considered as discriminating on the basis of religion. Form 1040 federal tax form Also, the restriction on religious discrimination does not apply to a club that is an auxiliary of a fraternal beneficiary society (discussed later) if that society is described in section 501(c)(8) and exempt from tax under section 501(a) and limits its membership to the members of a particular religion. Form 1040 federal tax form Private benefit prohibited. Form 1040 federal tax form   No part of the organization's net earnings can inure to the benefit of any person having a personal and private interest in the activities of the organization. Form 1040 federal tax form For purposes of this requirement, it is not necessary that net earnings be actually distributed. Form 1040 federal tax form Even undistributed earnings can benefit members. Form 1040 federal tax form Examples of this include a decrease in membership dues or an increase in the services the club provides to its members without a corresponding increase in dues or other fees paid for club support. Form 1040 federal tax form However, fixed-fee payments to members who bring new members into the club are not an inurement of the club's net earnings, if the payments are reasonable compensation for performance of a necessary administrative service. Form 1040 federal tax form Purposes. Form 1040 federal tax form   To show that your organization possesses the characteristics of a club within the meaning of the exemption law, you should submit evidence with your application that personal contact, commingling, and fellowship exist among members. Form 1040 federal tax form You must show that members are bound together by a common objective of pleasure, recreation, and other nonprofitable purposes. Form 1040 federal tax form   Fellowship need not be present between each member and every other member of a club if it is a material part in the life of the organization. Form 1040 federal tax form A statewide or nationwide organization that is made up of individual members, but is divided into local groups, satisfies this requirement if fellowship is a material part of the life of each local group. Form 1040 federal tax form   The term other nonprofitable purposes means other purposes similar to pleasure and recreation. Form 1040 federal tax form For example, a club that, in addition to its social activities, has a plan for the payment of sick and death benefits is not operating exclusively for pleasure, recreation, and other nonprofitable purposes. Form 1040 federal tax form Limited membership. Form 1040 federal tax form   The membership in a social club must be limited. Form 1040 federal tax form To show that your organization has a purpose that would characterize it as a club, you should submit evidence with your application that there are limits on admission to membership consistent with the character of the club. Form 1040 federal tax form   A social club that issues corporate membership is dealing with the general public in the form of the corporation's employees. Form 1040 federal tax form Corporate members of a club are not the kind of members contemplated by the law. Form 1040 federal tax form Gross receipts from these members would be a factor in determining whether the club qualifies as a social club. Form 1040 federal tax form See Gross receipts from nonmembership sources , later. Form 1040 federal tax form Bona fide individual memberships paid for by a corporation would not have an effect on the gross receipts source. Form 1040 federal tax form   The fact that a social club may have an associate (nonvoting) class of membership will not be, in and of itself, a cause for nonrecognition of exemption. Form 1040 federal tax form However, if one membership class pays substantially lower dues and fees than another membership class, although both classes enjoy the same rights and privileges in using the club facilities, there may be an inurement of income to the benefited class, resulting in a denial of the club's exemption. Form 1040 federal tax form Support. Form 1040 federal tax form   In general, your club should be supported solely by membership fees, dues, and assessments. Form 1040 federal tax form However, if otherwise entitled to exemption, your club will not be disqualified because it raises revenue from members through the use of club facilities or in connection with club activities. Form 1040 federal tax form Business activities. Form 1040 federal tax form   If your club will engage in business, such as selling real estate, timber, or other products or services, it generally will be denied exemption. Form 1040 federal tax form However, evidence submitted with your application form that your organization will provide meals, refreshments, or services related to its exempt purposes only to its own members or their dependents or guests will not cause denial of exemption. Form 1040 federal tax form Facilities open to public. Form 1040 federal tax form   Evidence that your club's facilities will be open to the general public (persons other than members or their dependents or guests) may cause denial of exemption. Form 1040 federal tax form This does not mean, however, that any dealing with outsiders will automatically deprive a club of exemption. Form 1040 federal tax form Gross receipts from nonmembership sources. Form 1040 federal tax form   A section 501(c)(7) organization can receive up to 35% of its gross receipts, including investment income, from sources outside of its membership without losing its tax-exempt status. Form 1040 federal tax form Income from nontraditional business activity with members is not exempt function income, and thus is included as income from sources outside of the membership. Form 1040 federal tax form Of the 35% gross receipts listed above, up to 15% of the gross receipts can be derived from the use of the club's facilities or services by the general public. Form 1040 federal tax form If an organization has outside income that is more than these limits, all the facts and circumstances will be taken into account in determining whether the organization qualifies for exempt status. Form 1040 federal tax form Gross receipts. Form 1040 federal tax form   Gross receipts, for this purpose, are receipts from the normal and usual (traditionally conducted) activities of the club. Form 1040 federal tax form These receipts include charges, admissions, membership fees, dues, assessments, investment income, and normal recurring capital gains on investments. Form 1040 federal tax form Receipts do not include initiation fees and capital contributions. Form 1040 federal tax form Unusual amounts of income, such as from the sale of a clubhouse or similar facility, are not included in gross receipts or in figuring the percentage limits. Form 1040 federal tax form Nontraditional activities. Form 1040 federal tax form   Activities conducted by a social club need to further its exempt purposes. Form 1040 federal tax form Traditional business activities are those that further a social club's exempt purposes. Form 1040 federal tax form Nontraditional business activities do not further the exempt purposes of a social club even if conducted solely on a membership basis. Form 1040 federal tax form Nontraditional business activities are prohibited (subject to an insubstantial, trivial, and nonrecurrent test) for businesses conducted with both members and nonmembers. Form 1040 federal tax form Examples of nontraditional business activities include sale of package liquor, take-out food, and long-term room rental. Form 1040 federal tax form Fraternity foundations. Form 1040 federal tax form   If your organization is a foundation formed for the exclusive purpose of acquiring and leasing a chapter house to a local fraternity chapter or sorority chapter maintained at an educational institution and does not engage in any social or recreational activities, it may be a title holding corporation (discussed later under section 501(c)(2) organizations and under section 501(c)(25) organizations) rather than a social club. Form 1040 federal tax form Tax treatment of donations. Form 1040 federal tax form   Donations to exempt social and recreation clubs are not deductible as charitable contributions on the donor's federal income tax return. Form 1040 federal tax form 501(c)(8) and 501(c)(10) - Fraternal Beneficiary Societies and Domestic Fraternal Societies This section describes the information to be provided upon application for recognition of exemption by two types of fraternal societies: beneficiary and domestic. Form 1040 federal tax form The major distinction is that fraternal beneficiary societies provide for the payment of life, sick, accident, or other benefits to their members or their dependents, while domestic fraternal societies do not provide these benefits but rather devote their earnings to fraternal, religious, charitable, etc. Form 1040 federal tax form , purposes. Form 1040 federal tax form The procedures to follow in applying for recognition of exemption are described in chapter 1. Form 1040 federal tax form If your organization is controlled by a central organization, you should check with your controlling organization to determine whether your unit has been included in a group exemption letter or can be added. Form 1040 federal tax form If so, your organization need not apply for individual recognition of exemption. Form 1040 federal tax form For more information, see Group Exemption Letter in chapter 1 of this publication. Form 1040 federal tax form Tax treatment of donations. Form 1040 federal tax form   Donations by an individual to a domestic fraternal beneficiary society or a domestic fraternal society operating under the lodge system are deductible as charitable contributions only if used exclusively for religious, charitable, scientific, literary, or educational purposes or for the prevention of cruelty to children or animals. Form 1040 federal tax form Fraternal Beneficiary Societies (501(c)(8)) A fraternal beneficiary society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. Form 1040 federal tax form The application and accompanying statements should establish that the organization: Is a fraternal organization, Operates under the lodge system or for the exclusive benefit of the members of a fraternal organization itself operating under the lodge system, and Provides for the payment of life, sick, accident, or other benefits to the members of the society, order, or association or their dependents. Form 1040 federal tax form Lodge system. Form 1040 federal tax form   Operating under the lodge system means carrying on activities under a form of organization that comprises local branches, chartered by a parent organization and largely self-governing, called lodges, chapters, or the like. Form 1040 federal tax form Payment of benefits. Form 1040 federal tax form   It is not essential that every member be covered by the society's program of sick, accident, or death benefits. Form 1040 federal tax form An organization can qualify for exemption if most of its members are eligible for benefits, and the benefits are paid from contributions or dues paid by those members. Form 1040 federal tax form   The benefits must be limited to members and their dependents. Form 1040 federal tax form If members will have the ability to confer benefits to other than themselves and their dependents, exemption will not be recognized. Form 1040 federal tax form Whole-life insurance. Form 1040 federal tax form   Whole-life insurance constitutes a life benefit under section 501(c)(8) even though the policy may contain investment features such as a cash surrender value or a policy loan. Form 1040 federal tax form Reinsurance pool. Form 1040 federal tax form   Payments by a fraternal beneficiary society into a state-sponsored reinsurance pool that protects participating insurers against excessive losses on major medical health and accident insurance will not preclude exemption as a fraternal beneficiary society. Form 1040 federal tax form Domestic Fraternal Societies (501(c)(10)) A domestic fraternal society, order, or association must file an application for recognition of exemption from federal income tax on Form 1024. Form 1040 federal tax form The application and accompanying statements should establish that the organization: Is a domestic fraternal organization organized in the U. Form 1040 federal tax form S. Form 1040 federal tax form , Operates under the lodge system, Devotes its net earnings exclusively to religious, charitable, scientific, literary, educational, and fraternal purposes, and Does not provide for the payment of life, sick, accident, or other benefits to its members. Form 1040 federal tax form The organization can arrange with insurance companies to provide optional insurance to its members without jeopardizing its exempt status. Form 1040 federal tax form 501(c)(4), 501(c)(9), and 501(c)(17) - Employees' Associations This section describes the information to be provided upon application for recognition of exemption by the following types of employees' associations: A voluntary employees' beneficiary association (including federal employees' associations) organized to pay life, sick, accident, and similar benefits to members or their dependents, or designated beneficiaries, if no part of the net earnings of the association inures to the benefit of any private shareholder or individual, and A supplemental unemployment benefit trust whose primary purpose is providing for payment of supplemental unemployment benefits. Form 1040 federal tax form Both the application form to file and the information to provide are discussed later under the section that describes your employee association. Form 1040 federal tax form Chapter 1 describes the procedures to follow in applying for exemption. Form 1040 federal tax form Tax treatment of donations. Form 1040 federal tax form   Donations to these organizations are not deductible as charitable contributions on the donor's federal income tax return. Form 1040 federal tax form Local Employees' Associations (501(c)(4)) A local association of employees whose membership is limited to employees of a designated person or persons in a particular municipality, and whose income will be devoted exclusively to charitable, educational, or recreational purposes. Form 1040 federal tax form A local employees' association must apply for recognition of exemption by filing Form 1024. Form 1040 federal tax form The organization must submit evidence that: It is of a purely local character, Its membership is limited to employees of a designated person or persons in a particular locality, and Its net earnings will be devoted exclusively to charitable, educational, or recreational purposes. Form 1040 federal tax form A local association of employees that has established a system of paying retirement or death benefits, or both, to its members will not qualify for exemption since the payment of these benefits is not considered as being for charitable, educational, or recreational purposes. Form 1040 federal tax form Similarly, a local association of employees that is operated primarily as a cooperative buying service for its members in order to obtain discount prices on merchandise, services, and activities does not qualify for exemption. Form 1040 federal tax form Voluntary Employees' Beneficiary Associations (501(c)(9)) An application for recognition of exemption as a voluntary employees' beneficiary association must be filed on Form 1024. Form 1040 federal tax form The material submitted with the application must show that your organization: Is a voluntary association of employees, Will provide for payment of life, sick, accident, or other benefits to members or their dependents or designated beneficiaries and substantially all of its operations are for this purpose, and Will not allow any of its net earnings to inure to the benefit of any private individual or shareholder except in the form of scheduled benefit payments. Form 1040 federal tax form To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. Form 1040 federal tax form Note. Form 1040 federal tax form Under section 4976, the reversion of funds from a section 501(c)(9) organization to the employer who created the beneficiary association may subject the employer to a 100% penalty excise tax on the amount of the reversion. Form 1040 federal tax form Notice requirement. Form 1040 federal tax form   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. Form 1040 federal tax form The organization gives notice by filing Form 1024. Form 1040 federal tax form If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before notice is given. Form 1040 federal tax form An extension of time for filing the notice can be granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . Form 1040 federal tax form Membership. Form 1040 federal tax form   Membership of a section 501(c)(9) organization must consist of individuals who are employees and have an employment-related common bond. Form 1040 federal tax form This common bond can be a common employer (or affiliated employers), coverage under one or more collective bargaining agreements, membership in a labor union, or membership in one or more locals of a national or international labor union. Form 1040 federal tax form   The membership of an association can include some individuals who are not employees, provided they have an employment-related bond with the employee-members. Form 1040 federal tax form For example, the owner of a business whose employees are members of the association can be a member. Form 1040 federal tax form An association will be considered composed of employees if 90% of its total membership on one day of each quarter of its tax year consists of employees. Form 1040 federal tax form Employees. Form 1040 federal tax form   Employees include individuals who became entitled to membership because they are or were employees. Form 1040 federal tax form For example, an individual will qualify as an employee even though the individual is on a leave of absence or has been terminated due to retirement, disability, or layoff. Form 1040 federal tax form   Generally, membership is voluntary if an affirmative act is required on the part of an employee to become a member. Form 1040 federal tax form Conversely, membership is involuntary if the designation as a member is due to employee status. Form 1040 federal tax form However, an association will be considered voluntary if employees are required to be members of the organization as a condition of their employment and they do not incur a detriment (such as a payroll deduction) as a result of their membership. Form 1040 federal tax form An employer has not imposed involuntary membership on the employee if membership is required as the result of a collective bargaining agreement or as an incident of membership in a labor organization. Form 1040 federal tax form Payment of benefits. Form 1040 federal tax form   The information submitted with your application must show that your organization will pay life, sick, accident, supplemental unemployment, or other similar benefits. Form 1040 federal tax form The benefits can be provided directly by your association or indirectly by your association through the payments of premiums to an insurance company (or fees to a medical clinic). Form 1040 federal tax form Benefits can be in the form of medical, clinical, or hospital services, transportation furnished for medical care, or money payments. Form 1040 federal tax form Nondiscrimination requirements. Form 1040 federal tax form   An organization that is part of a plan will not be exempt unless the plan meets certain nondiscrimination requirements. Form 1040 federal tax form However, if the organization is part of a plan that is a collective bargaining agreement that was the subject of good faith bargaining between employee organizations and employers, the plan need not meet these requirements for the organization to qualify as tax exempt. Form 1040 federal tax form   A plan meets the nondiscrimination requirements only if both of the following statements are true. Form 1040 federal tax form Each class of benefits under the plan is provided under a classification of employees that is set forth in the plan and does not discriminate in favor of employees who are highly compensated individuals. Form 1040 federal tax form The benefits provided under each class of benefits do not discriminate in favor of highly compensated individuals. Form 1040 federal tax form A life insurance, disability, severance pay, or supplemental unemployment compensation benefit does not discriminate in favor of highly compensated individuals merely because the benefits available bear a uniform relationship to the total compensation, or the basic or regular rate of compensation, of employees covered by the plan. Form 1040 federal tax form   For purposes of determining whether a plan meets the nondiscrimination requirements, the employer can elect to exclude all disability or severance payments payable to individuals who are in pay status as of January 1, 1985. Form 1040 federal tax form This will not apply to any increase in such payment by any plan amendment adopted after June 22, 1984. Form 1040 federal tax form   If a plan provides a benefit for which there is a nondiscrimination provision provided under Chapter 1 of the Internal Revenue Code as a condition of that benefit being excluded from gross income, these nondiscrimination requirements do not apply. Form 1040 federal tax form The benefit will be considered nondiscriminatory only if it meets the nondiscrimination provision of the applicable Code section. Form 1040 federal tax form For example, benefits provided under a medical reimbursement plan would meet the nondiscrimination requirements for an association, if the benefits meet the nondiscrimination requirements of section 105(h)(3) and 105(h)(4). Form 1040 federal tax form Excluded employees. Form 1040 federal tax form   Certain employees who are not covered by a plan can be excluded from consideration in applying these requirements. Form 1040 federal tax form These include employees: Who have not completed 3 years of service, Who have not attained age 21, Who are seasonal or less than half-time employees, Who are not in the plan and who are included in a unit of employees covered by a collective bargaining agreement if the class of benefits involved was the subject of good faith bargaining, or Who are nonresident aliens and who receive no earned income from the employer that has United States source income. Form 1040 federal tax form Highly compensated individual. Form 1040 federal tax form   A highly compensated individual is one who: Owned 5 percent or more of the employer at any time during the current year or the preceding year, Received more than $115,000 in compensation from the employer for the preceding year (the amount is annualized for inflation. Form 1040 federal tax form Go to IRS. Form 1040 federal tax form gov, and search “Pension Plan Limitation” for the year), and Was among the top 20% of employees by compensation for the preceding year. Form 1040 federal tax form However, the employer can choose not to have (3) apply. Form 1040 federal tax form Aggregation rules. Form 1040 federal tax form   The employer can choose to treat two or more plans as one plan for purposes of meeting the nondiscrimination requirements. Form 1040 federal tax form Employees of controlled groups of corporations, trades, or businesses under common control, or members of an affiliated service group, are treated as employees of a single employer. Form 1040 federal tax form Leased employees are treated as employees of the recipient. Form 1040 federal tax form One employee. Form 1040 federal tax form   A trust created to provide benefits to one employee will not qualify as a voluntary employees' beneficiary association under section 501(c)(9). Form 1040 federal tax form Supplemental Unemployment Benefit Trusts (501(c)(17)) A trust or trusts forming part of a written plan (established and maintained by an employer, his or her employees, or both) providing solely for the payment of supplemental unemployment compensation benefits must file the application for recognition of exemption on Form 1024. Form 1040 federal tax form The trust must be a valid, existing trust under local law and must be evidenced by an executed document. Form 1040 federal tax form A conformed copy of the plan of which the trust is a part should be attached to the application. Form 1040 federal tax form To be complete, an application must include a copy of the document (such as the trust instrument) by which the organization was created; a full description of the benefits available to participants and the terms and conditions of eligibility for benefits (usually contained in a plan document); and, if providing benefits pursuant to a collective bargaining agreement, a copy of that agreement. Form 1040 federal tax form Note. Form 1040 federal tax form Under section 4976, the reversion of funds from a section 501(c)(17) organization to the employer who created the supplemental unemployment benefit trust may subject the employer to a 100% penalty excise tax on the amount of the reversion. Form 1040 federal tax form Notice requirement. Form 1040 federal tax form   An organization will not be considered tax exempt under this section unless the organization gives notice to the IRS that it is applying for recognition of exempt status. Form 1040 federal tax form The organization gives notice by filing Form 1024. Form 1040 federal tax form If the notice is not given by 15 months after the end of the month in which the organization was created, the organization will not be exempt for any period before such notice is given. Form 1040 federal tax form An extension of time for filing the notice is granted under the same procedures as those described for section 501(c)(3) organizations in chapter 3 under Application for Recognition of Exemption . Form 1040 federal tax form Types of payments. Form 1040 federal tax form   You must show that the supplemental unemployment compensation benefits will be benefits paid to an employee because of the employee's involuntary separation from employment (whether or not the separation is temporary) resulting directly from a reduction-in-force, discontinuance of a plant or operation, or other similar conditions. Form 1040 federal tax form In addition, sickness and accident benefits (but not vacation, retirement, or death benefits) may be included in the plan if these are subordinate to the unemployment compensation benefits. Form 1040 federal tax form Diversion of funds. Form 1040 federal tax form   It must be impossible under the plan (at any time before the satisfaction of all liabilities with respect to employees under the plan) to use or to divert any of the corpus or income of the trust to any purpose other than the payment of supplemental unemployment compensation benefits (or sickness or accident benefits to the extent just explained). Form 1040 federal tax form Discrimination in benefits. Form 1040 federal tax form   Neither the terms of the plan nor the actual payment of benefits can be discriminatory in favor of the company's officers, stockholders, supervisors, or highly paid employees. Form 1040 federal tax form However, a plan is not discriminatory merely because benefits bear a uniform relationship to compensation or the rate of compensation. Form 1040 federal tax form Prohibited transactions and exemption. Form 1040 federal tax form   If your organization is a supplemental unemployment benefit trust and has received a denial of exemption because it engaged in a prohibited transaction, as defined by section 503(b), it can file a claim for exemption in any tax year following the tax year in which the notice of denial was issued. Form 1040 federal tax form It must file the claim on Form 1024. Form 1040 federal tax form The organization must include a written declaration that it will not knowingly again engage in a prohibited transaction. Form 1040 federal tax form An authorized principal officer of your organization must make this declaration under the penalties of perjury. Form 1040 federal tax form   If your organization has satisfied all requirements as a supplemental unemployment benefit trust described in section 501(c)(17), it will be notified in writing that it has been recognized as exempt. Form 1040 federal tax form However, the organization will be exempt only for those tax years after the tax year in which the claim for exemption (Form 1024) is filed. Form 1040 federal tax form Tax year in this case means the established annual accounting period of the organization or, if the organization has not established an annual accounting period, the calendar year. Form 1040 federal tax form For more information about the requirements for reestablishing an exemption previously denied, contact the IRS. Form 1040 federal tax form 501(c)(12) - Local Benevolent Life Insurance Associations, Mutual Irrigation and Telephone Companies, and Like Organizations Each of the following organizations apply for recognition of exemption from federal income tax by filing Form 1024. Form 1040 federal tax form Benevolent life insurance associations of a purely local character and like organizations. Form 1040 federal tax form Mutual ditch or irrigation companies and like organizations. Form 1040 federal tax form Mutual or cooperative telephone companies and like organizations. Form 1040 federal tax form A like organization is an organization that performs a service comparable to that performed by any one of the above organizations. Form 1040 federal tax form The information to be provided upon application by each of these organizations is described in this section. Form 1040 federal tax form For information as to the procedures to follow in applying for exemption, see chapter 1. Form 1040 federal tax form General requirements. Form 1040 federal tax form   These organizations must use their income solely to cover losses and expenses, with any excess being returned to members or retained to cover future losses and expenses. Form 1040 federal tax form They must collect at least 85% of their income from members for the sole purpose of meeting losses and expenses. Form 1040 federal tax form Mutual character. Form 1040 federal tax form   These organizations, other than benevolent life insurance associations, must be organized and operated on a mutual or cooperative basis. Form 1040 federal tax form They are associations of persons or organizations, or both, banded together to provide themselves a mutually desirable service approximately at cost and on a mutual basis. Form 1040 federal tax form To maintain the mutual characteristic of democratic ownership and control, they must be so organized and operated that their members have the right to choose the management, to receive services at cost, to receive a return of any excess of payments over losses and expenses, and to share in any assets upon dissolution. Form 1040 federal tax form   The rights and interests of members in the annual savings of the organization must be determined in proportion to their business with the organization. Form 1040 federal tax form Upon dissolution, gains from the sale of appreciated assets must be distributed to all persons who were members during the period the assets were owned by the organization in proportion to the amount of business done during that period. Form 1040 federal tax form The bylaws must not provide for forfeiture of a member's rights and interest upon withdrawal or termination. Form 1040 federal tax form Membership. Form 1040 federal tax form   Membership of a mutual organization consists of those who join the organization to obtain its services, and have a voice in its management. Form 1040 federal tax form In a stock company, the stockholders are members. Form 1040 federal tax form However, a mutual life insurance organization cannot have policyholders other than its members. Form 1040 federal tax form Losses and expenses. Form 1040 federal tax form   In furnishing services substantially at cost, an organization must use its income solely for paying losses and expenses. Form 1040 federal tax form Any excess income not retained in reasonable reserves for future losses and expenses belongs to members in proportion to their patronage or business done with the organization. Form 1040 federal tax form If such patronage refunds are retained in reasonable amounts for purposes of expanding and improving facilities, retiring capital indebtedness, acquiring other assets, and unexpected expenses, the organization must maintain records sufficient to reflect the equity of each member in the assets acquired with the funds. Form 1040 federal tax form Distributions of proceeds. Form 1040 federal tax form   The cooperative may distribute the unexpended balance of collections or assessments remaining on hand at the end of the year to members or patrons prorated on the basis of their patronage or business done with the cooperative. Form 1040 federal tax form Such distribution represents a refund in the costs of services rendered to the member. Form 1040 federal tax form The 85% Requirement All of the organizations listed above must submit evidence with their application that they receive 85% or more of their gross income from their members for the sole purpose of meeting losses and expenses. Form 1040 federal tax form Nevertheless, certain items of income are excluded from the computation of the 85% requirement if the organization is a mutual or cooperative telephone or electric company. Form 1040 federal tax form Mutual or cooperative telephone company. Form 1040 federal tax form   A mutual or cooperative telephone company will exclude from the computation of the 85% requirement any income received or accrued from: A nonmember telephone company for the performance of communication services involving the completion of long distance calls to, from, or between members of the mutual or cooperative telephone company, Qualified pole rentals, The sale of display listings in a directory furnished to its members, or The prepayment of a loan created in 1987, 1988, or 1989, under section 306A, 306B, or 311 of the Rural Electrification Act of 1936. Form 1040 federal tax form Mutual or cooperative electric company. Form 1040 federal tax form   A mutual or cooperative electric company will exclude from the computation of the 85% requirement any income received or accrued from: Qualified pole rentals, Any provision or sale of electric energy transmission services or ancillary service if the services are provided on a nondiscriminatory open access basis under an open access transmission tariff approved or accepted by the Federal Energy Regulatory Commission (FERC) or under an independent transmission provider agreement approved or accepted by FERC (other than income received or accrued directly or indirectly from a member), The provision or sale of electric energy distribution services or ancillary services if the services are provided on a nondiscriminatory open-access basis to distribute electric energy not owned by the mutual or electric cooperative company: To end-users who are served by distribution facilities not owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), or Generated by a generation facility not owned or leased by the company or any of its members and which is directly connected to distribution facilities owned by the company or any of its members (other than income received or accrued directly or indirectly from a member), Any nuclear decommissioning transaction, or Any asset exchange or conversion transaction. Form 1040 federal tax form   An electric cooperative's sale of excess fuel at cost in the year of purchase is not income for purposes of determining compliance with the 85% requirement. Form 1040 federal tax form Qualified pole rental. Form 1040 federal tax form   The term qualified pole rental means any rental of a pole (or other structure used to support wires) if the pole (or other structure) is used: By the telephone or electric company to support one or more wires that are used by the company in providing telephone or electric services to its members, and Pursuant to the rental to support one or more wires (in addition to wires described in (1)) for use in connection with the transmission by wire of electricity or of telephone or other communications. Form 1040 federal tax form   The term rental, for this purpose, includes any sale of the right to use the pole (or other structure). Form 1040 federal tax form The 85% requirement is applied on the basis of an annual accounting period. Form 1040 federal tax form Failure of an organization to meet the requirement in a particular year precludes exemption for that year, but has no effect upon exemption for years in which the 85% requirement is met. Form 1040 federal tax form Gain from the sale or conversion of the organization's property is not considered an amount received from members in determining whether the organization's income consists of amounts collected from members. Form 1040 federal tax form Because the 85% income test is based on gross income, capital losses cannot be used to reduce capital gains for purposes of this test. Form 1040 federal tax form Example. Form 1040 federal tax form   The books of an organization reflect the following for the calendar year. Form 1040 federal tax form Collections from members $2,400 Short-term capital gains 600 Short-term capital losses 400 Other income None Gross income ($2,400 + $600 =$3000) 100% Collected from members ($2,400) 80%   Since amounts collected from members do not constitute at least 85% of gross income, the organization is not entitled to exemption from federal income tax for the year. Form 1040 federal tax form   Voluntary contributions in the nature of gifts are not taken into account for purposes of the 85% computation. Form 1040 federal tax form   Other tax-exempt income besides gifts is considered as income received from other than members in applying the 85% test. Form 1040 federal tax form   If the 85% test is not met, your organization, if classifiable under this section, will not qualify for exemption as any other type of organization described in this publication. Form 1040 federal tax form Tax treatment of donations. Form 1040 federal tax form   Donations to an organization described in this section are not deductible as charitable contributions on the donor's federal income tax return. Form 1040 federal tax form Local Life Insurance Associations A benevolent life insurance association or an organization seeking recognition of exemption on grounds of similarity to a benevolent life insurance association must submit evidence upon applying for recognition of exemption that it will be of a purely local character, that its excess funds will be refunded to members or retained in reasonable reserves to meet future losses and expenses, and that it meets the 85% income requirement. Form 1040 federal tax form If an organization issues policies for stipulated cash premiums, or if it requires advance deposits to cover the cost of the insurance and maintains investments from which more than 15% of its income is derived, it will not be entitled to exemption. Form 1040 federal tax form To establish that your organization is of a purely local character, it should show that its activities will be confined to a particular community, place, or district irrespective of political subdivisions. Form 1040 federal tax form If the activities of an organization are limited only by the borders of a state, it cannot be purely local in character. Form 1040 federal tax form A benevolent life insurance association that does not terminate membership when a member moves from the local area in which the association operates will qualify for exemption if it meets the other requirements. Form 1040 federal tax form A copy of each type of policy issued by your organization should be included with the application for recognition of exemption. Form 1040 federal tax form Organizations similar to local benevolent life insurance companies. Form 1040 federal tax form   These organizations include those that in addition to paying death benefits also provide for the payment of sick, accident, or health benefits. Form 1040 federal tax form However, an organization that pays only sick, accident, or health benefits, but not life insurance benefits, is not an organization similar to a benevolent life insurance association and should not apply for recognition of exemption as described in this section. Form 1040 federal tax form Burial and funeral benefit insurance organization. Form 1040 federal tax form   This type of organization can apply for recognition of exemption as an organization similar to a benevolent life insurance company if it establishes that the benefits are paid in cash and if it is not engaged directly in the manufacture of funeral supplies or the performance of funeral services. Form 1040 federal tax form An organization that provides its benefits in the form of supplies and service is not a life insurance company. Form 1040 federal tax form Such an organization can seek recognition of exemption from federal income tax, however, as a mutual insurance company other than life. Form 1040 federal tax form Mutual or Cooperative Associations Mutual ditch or irrigation companies, mutual or cooperative telephone companies, and like organizations need not establish that they are of a purely local character. Form 1040 federal tax form They can serve noncontiguous areas. Form 1040 federal tax form Like organization. Form 1040 federal tax form   A like organization is a cooperative or mutual organization that performs a service similar to mutual ditch, irrigation, telephone, or electric companies. Form 1040 federal tax form Examples include the following: cooperatives that provide protection of river banks to prevent erosion, water and sewer services, cable television, satellite, television, cellular phone services, two-way radio service, or natural gas services. Form 1040 federal tax form 501(c)(13) - Cemetery Companies If your organization wishes to obtain recognition of exemption from federal income tax as a cemetery company or a corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, it must file an application on Form 1024. Form 1040 federal tax form For the procedure to follow to file an application, see Application, Approval, and Appeal Procedures in chapter 1. Form 1040 federal tax form A nonprofit mutual cemetery company that seeks recognition of exemption should submit evidence with its application that it is owned and operated exclusively for the benefit of its lot owners who hold lots for bona fide burial purposes and not for purposes of resale. Form 1040 federal tax form A mutual cemetery company that also engages in charitable activities, such as the burial of paupers, will be regarded as operating within this standard. Form 1040 federal tax form The fact that a mutual cemetery company limits its membership to a particular class of individuals, such as members of a family, will not affect its status as mutual so long as all the other requirements of section 501(c)(13) are met. Form 1040 federal tax form If your organization is a nonprofit corporation chartered solely for the purpose of the disposal of human bodies by burial or cremation, you should show that it is not permitted by its charter to engage in any business not necessarily incident to that purpose. Form 1040 federal tax form Operating a mortuary is not permitted. Form 1040 federal tax form However, selling monuments, markers, vaults, and flowers solely for use in the cemetery is permitted if the profits from these sales are used to maintain the cemetery as a whole. Form 1040 federal tax form How income can be used. Form 1040 federal tax form   You should show that your organization's earnings are or will be used only in one or more of the following ways. Form 1040 federal tax form To pay the ordinary and necessary expenses of operating, maintaining, and improving the cemetery or crematorium. Form 1040 federal tax form To buy cemetery property. Form 1040 federal tax form To create a fund that will provide a source of income for the perpetual care of the cemetery or a reasonable reserve for any ordinary or necessary purpose. Form 1040 federal tax form No part of the net earnings of your organization can inure to the benefit of any private shareholder or individual. Form 1040 federal tax form Ordinary and necessary expenses in connection with the operation, management, maintenance, and improvement of the cemetery are permitted, as are reasonable fees for the services of a manager. Form 1040 federal tax form Buying cemetery property. Form 1040 federal tax form   Payments can be made to amortize debt incurred to buy land, but cannot be in the nature of profit distributions. Form 1040 federal tax form You must show the method used to finance the purchase of the cemetery property and that the purchase price of the land at the time of its sale to the cemetery was not unreasonable. Form 1040 federal tax form   Except for holders of preferred stock (discussed later), no person can have any interest in the net earnings of a tax-exempt cemetery company or crematorium. Form 1040 federal tax form Therefore, if property is transferred to the organization in exchange for an interest in the organization's net earnings, the organization will not