What is your mileage rate for travel expenses?
The rate approved by the Executive Committee for travel expenses is 75% of the current IRS business rate, therefore, the approved rate for EC and District travel is $.41/mile.
Does 501c3 status exempt clubs from paying SALES taxes?
No. 501c3 status DOES NOT EXEMPT CLUBS FROM PAYING SALES TAXES. It is an exemption from paying income taxes and allows donors to write their donation to your Pilot Club off on their taxes.
How do we report a tax-deductible donation?
1) Guard your EIN number. Do not give it out to anyone who does not need it.
2) It should be included on receipts for tax-deductible donations, so donors have it when they file their taxes. It is easier to give receipts as donations are made rather than do an end-of-year mailing. This is an excerpt from the IRS web site:
For Donors: WHAT IS TAX DEDUCTIBLE?
If your contribution entitles you to merchandise, goods, or services, including admission to a charity ball, banquet, theatrical performance, or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received.
For a contribution of cash, check, or other monetary gift (regardless of amount), you must maintain as a record of the contribution a bank record or a written communication from the qualified organization containing the name of the organization, the date of the contribution, and the amount of the contribution. In addition to deducting your cash contributions, you generally can deduct the fair market value of any other property you donate to qualified organizations. See Publication 561, Determining the Value of Donated Property. For any contribution of $250 or more (including contributions of cash or property), you must obtain and keep in your records a contemporaneous written acknowledgment from the qualified organization indicating the amount of the cash and a description of any property contributed. The acknowledgment must say whether the organization provided any goods or services in exchange for the gift and, if so, must provide a description and a good faith estimate of the value of those goods or services. One document from the qualified organization may satisfy both the written communication requirement for monetary gifts and the contemporaneous written acknowledgment requirement for all contributions of $250 or more. (from http://www.irs.gov/taxtopics/tc506.html)
3) Clubs should do a “reality check” with their accountant, auditor, or a qualified CPA.
4) Start a spreadsheet of all donations, including both the full amount, the donor, and the amount the donor was credited for. For example, if a donor buys a flat of plants at $9, and the flat cost the club $3, the $9 check (or cash) should be recorded, minus the cost of goods sold, equals a $6 donation.
Do Clubs have to provide documentation for EVERY donation or transaction?
Not necessarily. CLUBS DO NOT HAVE TO USE THIS. It is an option for them, and a service to attract donors. However, if their biggest fundraiser is selling tea and breakfast sandwiches at the Relay for Life or local fall festival, this will not change the way they do business. They should not feel obligated to write tax-deductible receipts for every dollar glass of lemonade.
Are Dues tax-deductible?
501c3 status does not make dues tax deductible. Dues are paid for services rendered, i.e., club operating expenses.