Friday, October 10, 2003

Q. I want to start a non-profit organization. What do I do? A. For income tax purposes, your first step is to get the IRS application to be recognized as tax exempt (package 1023 or package 1024). The IRS' forms number is 1-800-829-3676. If you are going to be incorporated, or if you are going to solicit contributions from the public, check with the Georgia Secretary of State's Office. They handle the registering of corporations doing business in Georgia (404-656-2817) and the Charitable Solicitations Act (404-656-4910). After you have received your determination letter from the IRS, and your certificate of incorporation from the Secretary of State's Office, you file form 3605 with the Georgia Department of Revenue, to apply for a state income tax determination letter. If you have employees, you need to register for withholding the same as any other employer. If you have questions on any other type of tax, you need to check with the division that administers that tax. Q. I have received a determination letter from the IRS. What do I do for Georgia? A. File Georgia form 3605 (application for state income tax determination letter) with the required organizational documents listed on the form. Q. Will form 3605 get me an exemption from sales tax also? A. No. Check with the Sales & Use Tax Division to see if you qualify for any exemption from sales tax. Form 3605 relates only to state income tax. Q. We are a tax exempt organization. What do we file with the Georgia Department of Revenue? A. It depends on what you are filing with the IRS. (See above for info on form 3605.) Q. We are filing form 990, 990EZ or 990PF with the IRS. What do we file with Georgia? A. You are required to file a copy of the federal return. We do not have a form equivalent to the IRS informational returns 990, 990EZ or 990PF. 3:25:53 PM

ALL OF US HAVE SOME "DE MINIMIS" FRINGE BENEFITS ------ Can You Identify Them? Any employer-provided property or service having a value so small that accounting for it would be unreasonable or administratively impracticable, may be excluded from income as a "de minimis" fringe benefit.  The frequency with which the benefit is provided is a factor to be considered when determining that the value is small.  Examples of "de minimis" benefits for employees include:                   ---An occasional ticket to the theater or a sporting         event                 ---Occasional meal money or cab fare when         employees are required to work overtime,         provided the payments are not calculated         on the basis of the number of hours worked                 ---Occasional typing of personal letters or personal         use of office copying machines                 ---Occasional parties and picnics for employees,         coffee and doughnuts                 ---The value of meals provided at a reduced price         when provided at an employer-operated         eating facility whose revenues at least         equal its operating costs.                   However, SEASON tickets to sporting or theatrical events, free use of a company car to commute to and from work, or the use of an employer-owned or leased boat, hunting lodge, etc., for a weekend may not be considered "de minimis" benefits.  Therefore, withholding for Federal income tax, Social Security and Medicare taxes, and the employer-paid FUTA tax, would apply to the fair market value. 1:42:06 PM

UNCLAIMED  WAGES --- Who Keeps Them?   After working for you about six months, Tom quit and moved to another part of the country without leaving a forwarding address.  Some time later, you notice that several of the last paychecks you gave him have never been cashed.  What should you do?    Alternatively, suppose Tom's last paycheck was mailed to him at his last-known address, but today the U.S. Postal Service returns the check in an envelope stamped "Addressee Unknown."  What should you do?   Sometimes an employee agrees to work instead of taking vacation.  In effect, such employees are choosing additional pay in lieu of time off for vacation.  For withholding purposes, such vacation pay is treated the same as the pay out of unused vacation upon termination or retirement, discussed above.  Thus, the employee is paid two times for the vacation period in question, and the vacation pay portion is taxed as supplemental wages.    Regardless of the method used to withhold income tax on supplemental wages, such payments are subject to Social Security and Medicare taxes, and FUTA tax.  But, note that advance vacation payments, such as for Terri in the example above, do not qualify for use of the Federal supplemental wage withholding method.  Also, state income tax withholding practices vary in regard to supplemental wages, and should be examined for the particular state.   1:33:17 PM