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Re:[teacherartexchange] 501-3C Tax Question

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From: marcia (marciadotcom_at_TeacherArtExchange)
Date: Thu Sep 07 2006 - 06:14:45 PDT


Woody,
   I just started being our treasurer for the
Wisconsin Art. Ed. Assoc., which is a 501-3C. I'm
still learning all the rules and procedures, but it is
my understanding that a non-profit is able to have a
working budget for operating expenses. We are able to
have income for our organization through conference
fees, membership fees, art company advertising in our
newsletter, etc. What you need to have is a written
budget plan (approved by your board) that lays out how
much money you expect to take in, and how you plan to
spend that money. You should be spending about as
much as you take in. Now, if you happen to take in
more during an event or not spend all your budget,
that is okay. We have savings as well as money in a
foundation. It is okay to have savings in case you
need it in the future. Pretty much 501-3c
organizations just can't take in money for personal
profit.

 Check out this website for more detailed info:
http://www.irs.gov/charities/nonprofits/index.html
There are publications you can order (for free) that
explain more.

If you are active in your state art association, you
might want to talk to your treasurer to see if they
know more. Also, the IRS offers workshops for people
in charge of exempt organizations (our pres and past
treasurer were able to go to one recently). When
doing taxes, it is worth spending the money to hire a
tax accountant (because it can get complicated). The
accountant will also be able to advise you further and
answer more questions. If you have a very specific
question you can search on the IRS website or call
them (I got through to them fairly quickly).

Hope this helps. Good luck! Marcia Beckett (Lavery),
in WI

> Is anyone out there involved with a 501-3C ? What do
those groups
> do. Aren't non-profits allowed to do things to raise
money to use
> for operating expense ? I'm just looking for help
here. I will put
> the question to other watercolor groups around the
country to
> see haw they handle the issue. And, yes I'll solicit
legal advice ?
> Next year, I'll be the president of this group and I
don't wish
> to be flying blind.

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