Guest Phaeton84 Posted March 11, 2009 Share Posted March 11, 2009 I'm trying to establish a class bank account for our B-course class. I was wondering if anyone knows about the tax rules regarding such an account. I've already got an EIN number but am worried about tax-exempt status. I realize we can request exemption under 501c (19) status as a veteran's organization, but as the filing fee is 300 BUCKS!! I wanted to see if anyone else has tackled this before. Thanks in advance! Link to comment Share on other sites More sharing options...
war007afa Posted March 11, 2009 Share Posted March 11, 2009 You plan on keeping it long enough to gain substantial interest? Finance Guy would be the one to answer this best, I guess, but at first glance, I would think that the tax penalties would be overshadowed exponentially by the $300 tax exemption fee. Even at a great interest rate, you'd have to deposit a substantial amount of bank to start to worry about the tax ramifications of having an account. Link to comment Share on other sites More sharing options...
sputnik Posted March 11, 2009 Share Posted March 11, 2009 We set up a zero interest checking account. Link to comment Share on other sites More sharing options...
Guest Phaeton84 Posted March 11, 2009 Share Posted March 11, 2009 Well I wasn't thinking so much about interest but in the IRS's eyes doesn't ANY income have to be reported? In that case all the dues we pay (say 1200 bucks over 8 months) would be considered income (since they aren't "donations" if we aren't a tax-exempt org) right? I'm sure if it fell under an individuals taxable income it wouldn't affect much but I can't even pretend to say I know tax code for an organization. Link to comment Share on other sites More sharing options...
war007afa Posted March 12, 2009 Share Posted March 12, 2009 You already paid taxes on that money when you got it. If it doesn't draw any interest, it doesn't count as income Link to comment Share on other sites More sharing options...
Guest gray_fox Posted March 12, 2009 Share Posted March 12, 2009 We just keep the money in a fire proof box. It saves a lot of time and pain of using the bank. Link to comment Share on other sites More sharing options...
sputnik Posted March 12, 2009 Share Posted March 12, 2009 We just keep the money in a fire proof box. Pretty sure it's the same thing as setting up a non interest paying checking account. You don't file taxes on your personal checking account because there's no income. I think you're thinking too much. At any rate, all I did was walk into base credit union and say I wanted to set up a class fund, what do I do? Concept was not new to them, they told me what to do and why. Taxes never occurred to me, but it did to them. Try that, I promise you you're not the first class to do it, bank/credit union will have the answer. Link to comment Share on other sites More sharing options...
Boxhead Posted March 12, 2009 Share Posted March 12, 2009 (say 1200 bucks over 8 months) Jesus, I am glad I am not in that class. For that amount, your graduation party batter have hookers and blow. I don't know why I always hated that aspect of UPT. I guess I am just too crusty. Link to comment Share on other sites More sharing options...
Jughead Posted March 12, 2009 Share Posted March 12, 2009 For that amount, your graduation party batter have hookers and blow. Didn't yours...? Link to comment Share on other sites More sharing options...
Boxhead Posted March 12, 2009 Share Posted March 12, 2009 Didn't yours...? No...wait...maybe that's why I'm salty about the topic! Link to comment Share on other sites More sharing options...
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