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July 21, 2009
Nonprofit organizations are an important part of our community, providing help to the needy, education for a lifetime, funds for good causes and inspiration for many. Their services are needed even more now because of these hard financial times.
If you manage a non-profit, or assist in one, here is some tax information that can help you find out what is expected of your organization from the Indiana Department of Revenue.
First, the Internal Revenue Service (IRS) must recognize the organization as a nonprofit. Nonprofits can be corporations, and any community chest, fund, or foundations that exist for the following reasons:
Once the organization is officially a nonprofit, it is run much like any for-profit business.
Tax Deduction. Chances are someone has asked that you donate money or items to his or her nonprofit organization. If the organization is eligible to receive tax-deductible contributions, you may be able to take your donation off your federal individual or business tax return. (Note that Indiana does not have a similar state tax deduction for charitable contributions.
Tax exempt. Even though a nonprofit organization may not owe any income tax on money it takes in, it still may owe tax on money that’s not directly related to its business. Indiana’s Form IT-20NP guides them through this process.
Sales tax. Special terms apply to nonprofit organizations that may have to deal with sales tax.
Visit our New and Small Business Education Center for more information about nonprofit organizations. Here you can learn more about and how to register nonprofit organizations, how to register for exemptions from taxes on utilities, sales and income tax, plus read frequently asked questions. To visit the New and Small Business Education Center, go to www.smallbiz.in.gov/
For more information about business taxes, you can speak with a bilingual representative at the Indiana Department of Revenue, please call (317) 232-2240 (press 2 for Spanish) from 8 a.m. to 4:30 p.m., Monday through Friday. Or you can submit questions via e-mail to firstname.lastname@example.org You may also visit our new Web site www.impuestos.in.gov/
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