Butterfly -- 509a1 is a subset of 501c3. When the IRS approves your form 1023 application for 501c3 status, they will assign you to a 509a category. The category you fall under depends on how you will raise your funds, and the IRS will examine your annual form 990 to make sure you conform to the category to which you've been assigned. This is fairly straightforward for PTOs, but I can't say for other charities.
Bottom line, there's no separate fee or application for 509a status, you get it with your 501c3 determination letter.
I am the president/Founder/Secretary and everything for my registered non-profit called HELPING HANDS HELPING. We are a place like "Goodwill" except we give everything for free for those in need, relying solely on public donations to operate. Can I file the 509 (a)(1)/170(b)(1)(A)(vi) to open up- I am registered fully with the Federal Government except for this. Does it still cost a lot of money to file the 509 (a)(1) ? And also is the fee for either the 501c3 or 509a1 the same and is it a one time thing or a annual fee?
I have been investigating the possibility of our PTO becoming 501(c)3. This is the first year I have been regularly involved and could not believe we were not already. Apparently, the initial cost was enough of a sticker shock for past officers to decide not to apply. Is it possible to partner with the other elementary schools' PTOs in our corporation (4 total) to share the cost? I assume, if it is possible, we would somehow have to all work together on year end finances/ taxes. Just looking for ways to get this discussion back on the table. When I bring it up now the response I get is, "we looked at that. It's too expensive."
I have been investigating the possibility of our PTO becoming 501(c)3. This is the first year I have been regularly involved and could not believe we were not already. Apparently, the initial cost was enough of a sticker shock for past officers to decide not to apply. Is it possible to partner with the other elementary schools' PTOs in our corporation (4 total) to share the cost? I assume, if it is possible, we would somehow have to all work together on year end finances/ taxes. Just looking for ways to get this discussion back on the table. When I bring it up now the response I get is, "we looked at that. It's too expensive."
It should be, but that statement is still a bit misleading. You don't pay taxes on an event by event basis; you look at all the activity for the organization for the year. You can make money on one event and lose money on another, or make money on one event and have a lot of administrative expenses. It's the bottom line at the end of the year that's going to determine how much/whether you owe in taxes.
If that fundraiser/event brings in more money that it costs to put on, then you have earned a profit. And, since you are a non-profit, you owe taxes on that profit.
Should that last sentence be:
And, unless you are a non-profit, you owe taxes on that profit.
?
