Tax Return HELP!!!

Started by MistiE • 14 replies • 1084 views

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MistiE (New Hampshire)
Posts: 6

Posted:

Please please help!

Our old Treasurer just moved and we realized tax returns (Form 1120-H) were never filed. Nothing I can do for past years but I can still submit now for 2016 as our fiscal year ends 3/31. We have 20 single family homes in our HOA with a shared beach on a lake.

My questions are straightforward, I just need an example to go by from someone who has completed one before.

The ONLY income we have other than actual dues is our bank account interest which is minute 30 and a late fee we tacked on to an owner who was several Quarters past due. Is that late fee considered exempt function?

Definitely over 90% of our expenditures meet the test which is about $10,000. It's mainly insurance, beach taxes, plowing, landscaping, etc. We do have a few other expenses I'm not sure about...a monthly fee from the bank for paper statements, po box renewal, postage stamps, and a fee to rent a hall for our annual meeting. Total amount of these expenses is $200. Should these be included in line C?

So....is this how I fill out the form?
Line B - all dues income without the interest.
Line C - total expenses minus the expenses listed above (paper statements, stamps, rental hall, po box renewal) or included? So $10,200 or $10,000?
Line D - If the misc expenses aren't included, do I write $200 or am I writing the total? So $200, or $10,200? (It's worded confusing).
Line E - I leave blank since the bank interest isn't exempt?

So would I write the interest on line 2?

What other lines do I have to complete?

Thanks so much!!!

RichardP13 (California)
Posts: 3,868

Posted:

Why not just get a tax preparer to do the taxes? It would cost a couple of hundred of dollars. They could also file the proper forms with the state, IF that is required. I am a registered tax preparer and I couldn't give advice on the forum.

MistiE (New Hampshire)
Posts: 6

Posted:

All expenses have to be pre approved by the members and they did not approve accounting fees as the form should be "simple and straightforward". just thought some other hoa's could provide help based on their experiences.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Misti,

1120-H is easy to fill out.
Typically its (expecting you do not have employees):

Line B = Total income minus interest/dividends earned

Line C = Total expenses minus (money transferred into reserves + any gifts to charity (example: we give $100 to our local volunteer fire dept for a santa run) + any tips to service providers, etc.)

Line D = Total expenses minus money transferred into reserves

Line E = 0 (typically, unless invested in tax exempt bonds, etc.)

The rest of the form, I believe, is self explanatory.

If you wish an example, email me [email protected]
I'll provide you with our sanitized (no HOA name or taxid number) 1150A and final budget summary.

You are on your own for any NY tax filing.

TimB4 (Tennessee)
Posts: 21,059

Posted:

err, you are on your own for NH tax filing.

MistiE (New Hampshire)
Posts: 6

Posted:

THANK YOU!

I was completely misreading Lines C & D. This helps explain most everything.

We transferred money into a reserve savings fund to use for future road repairs and I didn't originally account for that in line C.

My only two questions are:

Should I be putting the administrative expenses in line C or D? So the PO Box renewal, stamps, etc?

If we received late fees, is that exempt function or no? I'm assuming no. And if it's not, I'm thinking it doesn't make sense to charge late fees since we'd have to pay taxes on that since it's over $100. Right? Maybe I should bring that up to the Board.

Hypothetically, given the data below (these figures are made up), would my form look like what I attached?

Revenue
Dues - $25,000
Late Fees - $100
Interest - $30
Total Revenue - $25,130

Expenses
Insurance - $2,000
Landscaping- $1,000
Plowing - $8,000
Taxes - $1,000
Admin - $500
Total Expenses - $12,500

Transferred $10,000 into reserve fund as well.

MistiE (New Hampshire)
Posts: 6

Posted:

It doesn't want to include my attachment but basically the Form 1120 would have this filled out:
Line B - 2500
Line C - 2000
Line D - 500

Line 2: Taxable Interest - 30
Line 7: Other income - 100
Line 8: Total - 130

Line 17: Same since deductions - 130
Line 18: Specific $100 deduction - 100
Line 19: Table income - 30
Line 20: 30% - 9

Line 22: Same - 9

Line 24: Amount Owed - 9

Unless of course we can claim that 100 late fee in exempt function income?

RichardP13 (California)
Posts: 3,868

Posted:

If probably filled out, you should not have any monies owed.

RichardP13 (California)
Posts: 3,868

Posted:

properly filled out.

DouglasK1 (Florida)
Posts: 2,046

Posted:

Quote:

Posted By MistiE on 05/06/2017 2:19 PM
If we received late fees, is that exempt function or no? I'm assuming no. And if it's not, I'm thinking it doesn't make sense to charge late fees since we'd have to pay taxes on that since it's over $100. Right? Maybe I should bring that up to the Board.

My understanding is that late fees are not exempt. Even if they are taxable, it's at 30% (after the first $100) so the association keeps 70%. It would be good to bring to the boards attention so they are aware of the numbers and can decide if they want to make a change.

Escaped former treasurer and director of a self managed association.

JeffT2 (Iowa)
Posts: 880

Posted:

Why can't you file returns for previous years?

You may have expenses to offset late fees, such as paying a manager/bookkeeper, etc.

MistiE (New Hampshire)
Posts: 6

Posted:

I can file for previous years? Would I use the same form and encompass all the years? Or do I file separate forms for each year? (I guess I assumed since I missed the cut off on previous years, there was nothing I could do).

MistiE (New Hampshire)
Posts: 6

Posted:

Quote:

Posted By MistiE on 05/06/2017 6:18 PM
I can file for previous years? Would I use the same form and encompass all the years? Or do I file separate forms for each year? (I guess I assumed since I missed the cut off on previous years, there was nothing I could do).

I just researched and answered my own question!

DouglasK1 (Florida)
Posts: 2,046

Posted:

Here's an IRS page about filing for past years.
https://www.irs.gov/businesses/small-businesses-self-employed/filing-past-due-tax-returns

This one says for small business, but should still apply. You would file separate returns for each year, using the correct for for that year.

Go to:
https://www.irs.gov/forms-pubs

Pick the Prior Year tab, the year, and search for 1120-H

Escaped former treasurer and director of a self managed association.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Quote:

Posted By MistiE on 05/06/2017 2:19 PM

Should I be putting the administrative expenses in line C or D? So the PO Box renewal, stamps, etc?

Admin expenses are included in both Lines C & D

Those are expenses that go toward managing the Association.

Quote:

Posted By MistiE on 05/06/2017 2:19 PM

If we received late fees, is that exempt function or no? I'm assuming no.

our Accountant considered late fees (similar to disclosure packages and fines) as assessments - hence they are exempt function income.

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