Financial guidelines?

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Ok..have been involved in travel ball for 5 years but this year we are starting up a new organization.
Can anyone tell me if I have to get a tax id number or do anything through the IRS for the checking account that sponsors and players/parents will issue payment to?
I know about the insurance and all that, just not sure about the bookkeeping end.
Thanks

 

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Re: New organization.

It depends on a few things.

One- are you going to have more than one or two teams?

if you are setting up an entire organazation with several teams you may want to set yourself up as a 503b -non-profit organization. However if your opperating as just a few teams you really don't need or have to. In this case you could have the parents make checks payable to the coach and he or she handle the funds for that particlular team. Several teams do this in the South West Ohio League for Baseball. There are alot of single teams out there and there is no need to go through the hassle of setting up a 503.

If you want to go ahead and set up a 503 then your best bet would be to start online and download all the forms and fill out and send in to IRS. It does take some knowledge to be able to get done yourself but you save a ton of money. I spent less than 200 doing it myself as I know others have spent several thousand on an attorney to hadle it for them. Attorneys make a ton of money on this sort of filling because it doesn't cost them anything to do .

I would go online and read all you can about the 503 and then decide .

There is a new law last year that even if your receipts are under 25k you must still file a return each year, and in the past this was not the case.

If you do it yourself plan to spend a few hours researching and filling out paperwork. Again I had extensive knowledge in this area so it was very easy for me - it might not be for you.

If you have a friend that is an accountant or attorney - your set.

 

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It is just 1 team. I know the parents would not mind just writing us the checks - our team has been together for 4 years - it is sponsors I am worried about.
Can the write checks to us and still have a tax deduction, without us being taxed?
Thanks

 

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In order for a sponsor to obtain a tax deduction, you must be a 503(c) charitable organization. You have to provide them with your Tax ID and no goods or services can be provided in return for their donation. If goods or services were provided, the value of such goods/services should be deducted from the total contribution.

Hope this helps you! Good luck with your team!

Marie

 

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Make sure you look under 501(c)(3). That's the designation for most non-profit organizations, including our type. Section 503 lists the requirements for becoming a 501(c) organization.

 

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Along that same line of questioning.

1) can money be given straight to the parents to help with travel expense to and from tournament or should the organization pay for it.

2) can left over money at the end of the year be divided up between the parents and given to the parents for whatever use they see fit.

3)is there a website that explains what can and can't be done with donations, fundraising money and fees paid to a team?

thanks in advance

 

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I'm not a tax adviser but I have alot of experience with this.

I don't believe there would be anything wrong with refunding $ back to parents at the end of the year. The rules do state that you are supposed to spend down or be near or close to a zero ballance (Non Profit) , so in a sence what you spend the money on is really up to you. I do believe the rules also state that you need to spend the money on things that are appropriate for your organization i.e equipment, field improvement- Refunding $ back to parents I do believe would also fit under the IRS rules.

I would suggest that the organization pay for the travel expenses directly to keep it clean.

If you have sponsors that are going to pay you money and want a tax deduction for it then you will have to go Non Profit status.

If your sponsors don't care ablut the tax deduction then I'd just go with the parents paying you the money and doing things simple.

If you go Non Profit you will have to file tax returns or at the very least a tax verification statemnt each year. 25K is the max allowed before you will start paying taxes.

I don't know af any web site other than the IRS and then look up non profit or 503 b or 501 c. There are several non profit types and you will need to chose the one that best fits.

 

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Thanks OP

my DD organization is non profit have been for a long time. I think the coaches are new to heading a team. they have been in the organization for a while but never as head coach. They were talking that after all the fund raising they would refund the remainder of the money to the players. I would rather caring it over until next year. i do know from running a baseball team that unless you file for non profit status you have to end the year with a zero balance. I think my sons baseball organization is a 501 c7 which means they can carry money over but we are not nor profit or something like that. We had a accountant do the forms and I coached. Was not truely up on all the ins and outs

 

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If you are not a 501c you dont have sponsers!!!!!!!!!!!!!! You are selling advertisements on banners, websites, and shirts!!!! That way the company can write it off.... At least thats my thought.