Thanks so much for the information. I think the one regarding the Estate Tax is the one she is possibly making reference to. It fits with some of the comments that the individual made. I am not seeing where the "gift" designation applies to organizations and I agree that I don't think it does. Thanks again for the information everyone, it really helps!
I don't think anything like that was discussed here, but what she may be referencing is the IRS rules on gift giving. It affects individual gift giving, and I don't think it would apply to organizations.
Particulaly in estate planning with older parents, you've probably heard one idea is they should begin to distribute their assets early to avoid estate taxes and that an individual can give up X amount as a gift without either side being taxed? That amount used to be $10,000 forever. For 2002, it became $11,000 (annual exclusion for gift tax) which became more highlighted as people started filing this Spring for 2002.
I imagine that's where the $11,000 number came from. But as I said, I don't think it applies to anything we talk about here.
Sounds like apples and oranges to me. If you give an individual teacher $600 or more, you need to give that teacher a 1099--your status in terms of receiving your tax exemption is irrelevant. I have no idea what the $11,000 limit is that she is talking about--that doesn't seem to tie to any IRS limit on anything that might be related to this.
Is this person saying that if you do not get 501(c)(3) status, then you can donate $11K? But if you do get 501(c)(3), then you cannot?
Like Tim, I've never heard that $11K number before. I'm not sure under what circumstances you would have to file a 1099 for donations to a teacher, but if they were 1099 eligible the limit is $600.
That $11,000 figure (and related analysis) is news to me. I don't think it's true and I don't recall ever having read anything like it here. We (PTO Today) strongly recommend going for the 501(c)(3).
I have recently assumed the co-chairmanship of our school's PTO. I have been involved with a variety of non-profit organizations (primarily in the Treasurer's position) and am familiar with the accounting procedures characteristic of non-profits.
We have filed and been given incorporation and are working on filing for tax exempt status. My question deals with a member who has expressed concern over filing for this status as she read somewhere - allegedly on this site - that we could donate up to $11,000 to the individual teachers in our school and it would not be taxed and a form 1099 (Miscellaneous Income) would not need to be filed.
I am unclear as to whether or not her information is accurate and I would like the opportunity to view the information for myself if someone could clue me in as to it's location (I've searched and am just not seeing it). I would also appreciate any help dealing with issues of this nature. This particular member is adamant that she is correct and unwilling to entertain other viewpoints, so I would at least like to level the playing field a bit here.
