Pam:

As outgoing Treasurer and incoming President, I learned alot last year regarding the 501c3. We ended up hiring an accountant. We were told that gross was what we raised not left after expenses. Hope this helps and would love to pick your brain on your fundraisers.

Tks
Lori

Gross = every dollar collected.

Apparently, money is gross.

So in your example, the $23,000 would be the gross amount.

By the way, filing the 990/990EZ is a little confusing the first time, but once you start organzing your finances according the the IRS categories, it's not too bad. Many of us manage it ourselves. More importantly, it's an informational return - more like a report than a calculation of tax owed. Under most circumstances a PTO won't pay any income tax.

And by the way, there are new rules going into effect in 2008 where all 501(c)(3) organizations will file something each year. For the lower income amounts, apparently there will be a "postcard" return.

Here's the definiation, straight from page 4 of the instructions for Form 990, "Gross receipts are the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses."

It's the big number, all the income that goes into your bank account, no matter how you end up spending it or what the expenses were. It adds up in a hurry.

I know the IRS is redesigning the 990 form for use in 2009 and maybe they're going to rename it, but in the interest of accuracy, currently the annual "tax" return that a 501c3 files is called Form "990" and Form "990EZ" (which one you file depends on your income level)

I am one of the new co-presidents to our elementary pto. We do not have a 501c nor do we have a employee id number (ss4) I talked with the girl at the internal revenue to find out if we had either & we didn't (since the previous officers had no idea) anyhow they said if we make 5,000 gross a year or less then we are no required to have a 501c but if we gorss over 5000 ayear then we need to file for a 1023 application (with a one time user fee) then after we get our 501c if we are 25,000 or less over a 3 yr average we are no required to file anything other then a 99N (starting 2008) which is basically just a verification online...sounds like no big deal,
BUT if we gross over 25,000 in a 3 year average we will need to file a 999EZ electronically, which I think sounds basically like your regular joe files for taxes, so we might need an accountant to do this (since I am obviously a fish out of water where this is concerned) anyhow MY QUESTION now that I explained all of that is this???

What does gross actually mean to a PTO? Because we do two fundraisers a year on average that pull in 20,000 and then we do a May Day that pulls in 3000 average, and we might for sure have another 2000 made throughout the year, BUT we use it for giving the teachers a $100 allowance to buy school supplies for their class (which is 30+ teachers x100) plus we pay $16 per child for field trips (which we have 550 students) (I can't do that math in my head sorry) and then we basically have expenses, and all of our yearly school events, so we basically were left with this year $3000.00...so do we count that as earned income at 3000 or do we have to count it as 23,000 and not what we end up paying out?

If anyone can answer this for me...that would be great...I appreciate it!

Pam PTO