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Chapter Finances | |||
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What do I need to file with National and how often? According to NADCA bylaws, each Chapter must submit, within 90 days after the close of their fiscal year, a copy of their annual report to the state in which they are recognized as a legal entity and a detailed report of the Chapter’s financial condition. How do I report my "financial condition"? The best way to report your financial condition is to submit a copy of your audited financial statements. If you do not receive an audit, a copy of your 12/31 statements would be fine. Are there any tax forms to fill out? Yes. For U.S. Chapters with annual gross receipts normally more than $25,000 per year, they need to file a Form 990 (or 990 EZ) with the IRS. If the organization's gross receipts during the year are less than $100,000 and its total assets at the end of the year are less than $250,000, it may file Form 990-EZ instead of Form 990. Even if the organization meets this test, it can still file Form 990. Chapters with unrelated business income (advertising revenue, sale of mailing lists, sponsorship money, etc.) need to file a Form 990T with the IRS. The most current forms including the IRS publications that describe the various 990s, visit the IRS website at www.irs.gov. Also, check with your state or provincial department of revenue to find out if you need to file a return with your state or province. (Most require something!) Do I file a 990T regardless of total revenues? A company only has to file a 990T if their income from an unrelated trade or business is $1,000 or more. Who do I need to send these forms to? Both the 990 and the 990T need to be filed with the Internal Revenue Service office for your particular state. You can call the IRS directly to get the address or you can look in your tax booklet that comes with the tax form and it will state where to file the returns. Will sending a copy to NADCA satisfy the IRS requirement? No, you must file with the IRS. Do I need to file anything with the state? Many states require a business to file a state tax return if their assets and/or revenues are over a certain amount. Each state has it’s own requirements and they vary from state to state. Many states require a business that is incorporated with the state to submit an annual report which is a form provided to you by the Secretary of State and usually includes a nominal filing fee. Do I need to have insurance for my chapter? If so, what type and where can I get it? Although not mandatory, it is good business practice to have general liability insurance for your chapter that includes all chapter events. Another type of insurance that is worth considering is Directors and Officers Liability Insurance to cover your Chapter Officers and Board members. Insurance can be purchased from many different insurance companies. Understand the laws in the state where your Chapter's corporation status is held! Do I need to be independently audited? If so, how often? Your bylaws should state whether your Board of Directors require your chapter to have an independent audit done on your financial records. If not required, it would be a good idea to have an outside audit firm look at your records once a year preferably after the close of your fiscal year. Who should sign our checks? Although there is no requirement for check signers, it is suggested that each Chapter have two check signers for their bank account. A good combination is the Chairman and the Treasurer. It is also good practice to have double signatures a requirement for check cashing with your bank. What are the dos and don’ts of setting up a bank account? When setting up a business checking account it is important that you use your chapter ‘FEIN’ number. This is your federal ID number. Do not use a chapter member’s social security number. If you do not have a FEIN number you must apply for one with your state. What do I need to do if our chapter provides scholarship money? I can’t find anything on what the Chapter must do but for the individual it is not included as income for income tax purposes.
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