Class Bank Account

[Guest Phaeton84]

I'm trying to establish a class bank account for our B-course class. I was wondering if anyone knows about the tax rules regarding such an account.

I've already got an EIN number but am worried about tax-exempt status. I realize we can request exemption under 501c (19) status as a veteran's organization, but as the filing fee is 300 BUCKS!! I wanted to see if anyone else has tackled this before.

Thanks in advance!

[war007afa]

You plan on keeping it long enough to gain substantial interest? Finance Guy would be the one to answer this best, I guess, but at first glance, I would think that the tax penalties would be overshadowed exponentially by the $300 tax exemption fee. Even at a great interest rate, you'd have to deposit a substantial amount of bank to start to worry about the tax ramifications of having an account.

[sputnik]

We set up a zero interest checking account.

[Guest Phaeton84]

Well I wasn't thinking so much about interest but in the IRS's eyes doesn't ANY income have to be reported? In that case all the dues we pay (say 1200 bucks over 8 months) would be considered income (since they aren't "donations" if we aren't a tax-exempt org) right? I'm sure if it fell under an individuals taxable income it wouldn't affect much but I can't even pretend to say I know tax code for an organization.

[war007afa]

You already paid taxes on that money when you got it. If it doesn't draw any interest, it doesn't count as income

[Guest gray_fox]

We just keep the money in a fire proof box. It saves a lot of time and pain of using the bank.

[sputnik]

We just keep the money in a fire proof box.

Pretty sure it's the same thing as setting up a non interest paying checking account. You don't file taxes on your personal checking account because there's no income. I think you're thinking too much.

At any rate, all I did was walk into base credit union and say I wanted to set up a class fund, what do I do? Concept was not new to them, they told me what to do and why. Taxes never occurred to me, but it did to them. Try that, I promise you you're not the first class to do it, bank/credit union will have the answer.

[Boxhead]

(say 1200 bucks over 8 months)

Jesus, I am glad I am not in that class. For that amount, your graduation party batter have hookers and blow.

I don't know why I always hated that aspect of UPT. I guess I am just too crusty.

[Jughead]

For that amount, your graduation party batter have hookers and blow.

Didn't yours...?

[Boxhead]

Didn't yours...?

No...wait...maybe that's why I'm salty about the topic!