IRS Form 1024: Gets You Started on Tax Exempt Status

What’s the Difference Between 501(a) & 501(c)(3)?

These labels are both Internal Revenue Service terms for tax-exempt organizations.  By tax exempt group we mean an organization that is formed not to make money for any person or corporation, but to give services or information, promote civil rights, or spread religion.  Tax exempt organization also must not be involved in any political campaign.  So, two basic rules: not to make money and not to get involved in a political campaign.

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But what’s the difference between 501(a) and 501(c)(3)?  Both are types of tax-exempt organizations but the difference is that one is public and one is private.  501(a) is for private membership.  501(c)(3) is open to the public.  To apply for tax-exempt position, they also use different Internal Revenue Service application forms.  501(a) uses IRS Form 1024.  501(c) (3) uses IRS Form 1023.

Use IRS Form 1024 when your organization will be comprised of a select private group.  An example would be a group of employees who form a tax exempt organization to promote awareness of benefits on the job.

How to Create a Tax Exempt Organization

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An Exempt Organization requires a hefty amount of paperwork, from beginning to end.  One of the first things you would do for your new organization would be to apply for tax exempt status.  IRS Form 1024 is used to apply for federal tax exempt status.  The IRS likes to call this form Application for Recognition of Exemption under Section 501(a).  Judging by the short length of the Form 1024 Instructions that go with the form, it’s not too difficult to fill out.

You’ll also need an Employer Identification Number (EIN) from the IRS but don’t worry that’s an even shorter and easier form to fill out.  In fact, you can apply for an EIN online and have a number the same day.  If only all IRS transaction were so hassle-free!

And third you’ll need to create your tax-exempt organization under whatever state law in which you’re going to be operating.  Go to your state’s website for those directions and forms.

You’ve Submitted IRS Form 1024: Now What?

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Now you wait, but the IRS helps you through the system.  They even have a handy dandy interactive question and answer guide to applying for Section 501(a) status.  The IRS will procedure Form 1024 forms in the order that they were received unless you have a compelling reason to hurry up the process and skip ahead of others in line. These are…

    Your new organization is set up to provide relief to disaster victims.  In this case time is of the core.

    You require the status fast as you’re trying to apply for a grant that will go away if you miss a time limit

    The IRS messed up and caused your application to get bumped back in line.  Explain carefully and they may help you out.

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Instructions on Accomplishing IRS Form 2290

The law requires business operators and owners to absolute and accomplishes an Internal Revenue Service form 2290 regularly. Regular filing is significant to prevent any legal problems. This is also very important if you operate using highway motor vehicles purposely around 55,000 pounds in weight or more. File this IRS form for several reasons: imposed limit on exceeding mileage and tax compensation for vehicle complete with suspension statement. File the form to raise the gross weight you can load on the vehicle as well. The government requires operators and owners to submit 2290 if you think you will only use the vehicle for 5,000 or below. Whichever basis you have for filing, you require following several procedures.

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To begin filing, obtain a form 2290 first. Learn the required information. Get the following: your employer identification or EIN, taxable gross weight of the vehicle and the vehicle identification number. The taxable gross weight will depend on the category or classification of the vehicle. In case you do not have EIN, go to IRS to apply for one. Application is possible through fax, mail or over the phone. It is finest to contact Internal Revenue Service and confirm application options.

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The definite vehicle will give you the vehicle identification number. Refer to the registration or title of the car. To make sure you found the VIN, check if it is around 17 characters - with mixed numbers and letters. The VIN comes with the vehicle not the trailer. When accomplishing IRS 2290 filing, you should learn the difference between the 2. The gross weight taxable from the vehicle includes the sum of:

- Specific unloaded weight of the vehicle fully prepared for service

- Specific unloaded weight of trailers or semitrailer fully prepared to implement customized service

- The total or highest load weight put on the vehicle, semitrailer or trailer

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Confirm with Internal Revenue Service, if filing for your tax form 2290 requires additional requirements. The vehicle registration will note the weight as well as the taxable gross that may involve the full amount of tax to pay for. It is significant to learn how to complete vehicle registration based on gross weight category, specific gross weight and other specialized permits. Check vehicle registration procedures for your state, as these differ for every state. Taxable weight in relation to special traveling permits is frequently not included.

IRS's Form 2555 - Tax Free Living and Retirement

Not many American taxpayers know about the Department of Treasury's Form 2555, and even less fully appreciate the tax-free living which this Form can offer.

Form 2555 has to do with Foreign Earned Income. And the reason this Form is tied to retirement is as this is one of the ways the wealthy has continued to officially avoid taxes, year after year. Is this tax avoidance mythology, ethical? Before you can answer that inquiry, you would require to fully understanding the loophole.

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There are hundreds of thousands of Americans living aboard and earning a living from a foreign government or basis. This article isn't really about them. This group files taxes just like all other taxpayers, except for one difference. They attach Form 2555 to Form 1040 and request and exclusion in the amount of $95,100 for 2012 or $97,600 for 2013. (The exclusion increases each year based on inflation)

Exclusion means, if granted by the Internal Revenue Service, this amount is "excluded" from being taxed.

No big deal if you are working a job outside the United States. No big deal when you retire and work a job in a foreign country. Excluding the income from your part-time job or full-time job in a foreign country can go a long ways in lowering your tax legal responsibility each year. But when you couple the Foreign Earned Income tax loophole with an offshore company, while living in the United States, or offshore, your tax picture can change noticeably, based on existing tax laws.

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Understanding the two-step procedure of allowing your company to generate income, offshore, keeping the profits offshore, until you are ready to be taxed on the income, and using the Foreign Earned Income Exclusion to avoid being taxed on $97,600 a year, or $195,200 if married and filing jointly, your tax portfolio benefits to a great extent.

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