MichelleH4 (North Carolina)
Posts: 2
Posts: 2
Posted:
I have two questions. Does a HOA file state taxes?If so what form is used to file for HOA.
Thanks
Thanks
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NC State income tax form
Started by MichelleH4 • 10 replies • 7369 views
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GloriaM (North Carolina)
Posts: 829
Posts: 829
Posted:
You would file CD-405(51) for NC State Taxes. In NC it would depend upon how your Articles of Incoporation are filed. Are you an HOA, SOA, POA or just an Association Inc.
MichelleH4 (North Carolina)
Posts: 2
Posts: 2
Posted:
We are HOA.Thanks
GloriaM (North Carolina)
Posts: 829
Posts: 829
Posted:
Micelle:
You would only file an 1120, if your Articles are filed as an HOA, Inc. If you were LLC, or Association, Inc. then you would have to file with the State. I hope that helps.
You would only file an 1120, if your Articles are filed as an HOA, Inc. If you were LLC, or Association, Inc. then you would have to file with the State. I hope that helps.
JoyN (North Carolina)
Posts: 10
Posts: 10
Posted:
Our association pays NC State taxes and Federal taxes. I thought we were a non-profit association. Why do we have to pay taxes?
MicheleD (Kentucky)
Posts: 4,491
Posts: 4,491
Posted:
We are non-profit as well.
We don't "file taxes" per se, but we DO file forms that report our financial earnings and expenses.
It's simply a reporting function. No payment required unless certain conditions are not met (for example, if you fail to file for a specific year, when you DO file, your after-expense earnings would be taxable because by failing to report (file), you loose the exempt status for that year in which you failed to report.)
Hope that helps.
We don't "file taxes" per se, but we DO file forms that report our financial earnings and expenses.
It's simply a reporting function. No payment required unless certain conditions are not met (for example, if you fail to file for a specific year, when you DO file, your after-expense earnings would be taxable because by failing to report (file), you loose the exempt status for that year in which you failed to report.)
Hope that helps.
MicheleD (Kentucky)
Posts: 4,491
Posts: 4,491
Posted:
One more thing, I was addressing the FEDERAL tax filing, not the state. I can't speak to NC tax code, but in KY it mirrors the federal requirements/rules.
RogerB (Colorado)
Posts: 5,067
Posts: 5,067
Posted:
HOAs are incorporated as a not-for-profit corporation. They are not a non-profit organization and they are not exempt from taxes. HOAs should all file state and federal taxes.
MicheleD (Kentucky)
Posts: 4,491
Posts: 4,491
Posted:
um, according to our CPA, we have not had to file "taxes" except in two years where the treasurer did not file. We pay no taxes as long as we file the forms properly. I have 10 years of $0.00 taxes due. Are you saying that our CPA is incorrect and that somehow there are taxes outstanding?
There are circumstances whereby the income would be taxed, such as if we our expenses were not operating expenses, but since they are......
There are circumstances whereby the income would be taxed, such as if we our expenses were not operating expenses, but since they are......
RogerB (Colorado)
Posts: 5,067
Posts: 5,067
Posted:
Quote:
Posted By MicheleD on 08/19/2007 10:00 PM
um, according to our CPA, we have not had to file "taxes" except in two years where the treasurer did not file. We pay no taxes as long as we file the forms properly. I have 10 years of $0.00 taxes due. Are you saying that our CPA is incorrect and that somehow there are taxes outstanding?
There are circumstances whereby the income would be taxed, such as if we our expenses were not operating expenses, but since they are......
um, according to our CPA, we have not had to file "taxes" except in two years where the treasurer did not file. We pay no taxes as long as we file the forms properly. I have 10 years of $0.00 taxes due. Are you saying that our CPA is incorrect and that somehow there are taxes outstanding?
There are circumstances whereby the income would be taxed, such as if we our expenses were not operating expenses, but since they are......
No Michele, I am saying you are a not-for-profit corporation and are not exempt from filing taxes. Using IRS form 1120-H you do not owe anything if outside income, such as interest on reserve funds, less deduction of previous year tax paid, is less than $100. That is because there is a $100 standard deduction. For example, when the HOA qualifies and uses 1120-H, suppose interest earned is $1500 and tax paid last year was $300 then the tax owed this year equals: $1500 (earned interest) - $300 (tax paid previous year) - $100 (standard deduction) = $1100 x 30% = $330.
It doesn't take a CPA to use 1120-H
DaneC (California)
Posts: 210
Posts: 210
Posted:
Actually the terms non-profit and not-for-profit are misleading. In the world of the IRS, your assessments are called "function income", and provided they exceed 60% of your gross income, you can "elect" to file 1120H, and thus avoid the payment of taxes on your function income.
Here's a link to that one page tax return, and the 5 pages of general information and instructions.
http://www.irs.gov/pub/irs-pdf/f1120h.pdf
As far as State taxes are concerned, you could probably get that information by calling you relative state tax board. In some states, e.g. California, exemption of function income is not automatic, it must be applied for.
Here's a link to that one page tax return, and the 5 pages of general information and instructions.
http://www.irs.gov/pub/irs-pdf/f1120h.pdf
As far as State taxes are concerned, you could probably get that information by calling you relative state tax board. In some states, e.g. California, exemption of function income is not automatic, it must be applied for.
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