HOAleader.com - Tip of the Week - May 15, 2015
Published: Fri, 05/15/15
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It’s Time to Start Working on Your HOA’s 2015 Taxes. Seriously.
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In this week’s tip, we give you a big jump on filing your HOA’s tax returns next
year. And if you take our advice now, we promise you’ll probably be much less
stressed later.
We’re offering this advice because unfortunately, an HOAleader.com
reader just learned the HOA’s accountant has done the returns wrong for
seven years—and it was a CPA supposedly familiar with HOAs.
Bummer.
We can’t undo this reader’s seven-year glitch. But we do have some ideas to
help our reader fix this fiasco. And we have some tax tips that may help you get
ready for next year’s tax filings. Here are two things to keep in mind:
1. Know when to file your returns. It may not be on April 15 annually. Most
associations are corporations, albeit not for profit. But corporations
must file tax returns, usually on a different schedule than individuals. If
your HOA follows a calendar-year accounting method, it needs to file its
return by March 15. If your HOA uses a different accounting method, it needs
to file returns by the 15th day after the third month of its taxable year.
Example: If your calendar year ends July 31, your tax return is due Dec. 15.
2. Know you have more than one option. You can file corporate tax returns for
your association, just like any other corporation. Or you can file an 1120-H
form under Section 528 of the Internal Revenue Code, which is written
explicitly for HOAs. Your HOA must meet several criteria to file under this
provision, and as our reader found, it’s possible for accountants who
aren’t familiar with HOAs to not understand when it applies and doesn’t.
“You may be able to find a CPA who provides your HOA some kind of tax
advantage,” explains Andrew Schlegel, CCAM®, executive vice president of
community management for Orange County and Los Angeles at FirstService
Residential-California in Aliso Viejo. “At many HOAs, there’s a mistaken
belief that because they’re nonpropfit entities, they don’t pay taxes.
They do pay taxes on what’s called nonmember income. A good CPA would
evaluate your HOA’s options and guide you to the one that provides you the
lowest tax burden.”
How can you find a wise CPA? Get tips in our new article:
http://www.hoaleader.com/members/1177.cfm
Best regards,
Matt Humphrey
President
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Recent articles posted at HOAleader.com:
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Get Ready for Next Year's HOA Tax Filing
Yes, tax time is over for some HOAs. But not all, depending on whether they
operate on a calendar year or some other system. Here we offer a few tax tips
and lend a hand to a reader who's just found out his HOA's accountant mucked up
his association's tax filing.
Click here to read full article:
http://www.hoaleader.com/members/Get-Ready-for-Next-Years-HOA-Tax-Filing.cfm
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Another Emerging HOA Issue: Tiny Homes
A homeowner association expert recently revealed to us a new issue arising
at some of the community associations she represents: Tiny homes.
They're often on a trailer so they can easily be moved, so homeowners are
moving them onto their property. And that's creating challenges for HOAs in
all kinds of areas, including when it comes to architectural rules. Here we
explain and offer advice.
Click here to read full article:
http://www.hoaleader.com/members/AnotherEmergingHOAIssueTinyHomes.cfm
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Time to Get Your HOA's Drone Rules Off the Ground
In this week's tip, we'll fly a few thoughts about drones past you.
They're not just for the military anymore, and you need to get ahead of this
fast-growing trend before your HOA's airspace needs its own traffic
controllers.
Click here to read full article:
http://www.hoaleader.com/members/Time-Get-Your-HOAs-Drone-Rules-Off-Ground.cfm
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Drones at Your HOA: What You Need to Know
Drones aren't just for the military anymore, and HOAs need to get ahead of
this fast-growing trend. Here we discuss whether HOAs can expect owners or
businesses to begin flying drones within the HOA and whether HOAs can
restrict their use.
Click here to read full article:
http://www.hoaleader.com/members/Drones-at-Your-HOA-What-You-Need-Know.cfm
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What California HOAs Need to Know About New Drought Restrictions
The huge--and dry--state of California's governor just imposed water
restrictions to deal with the dangerous conditions. How must HOAs proceed?
Click here to read full article:
http://www.hoaleader.com/members/What-California-HOAs-Need-Know-About-New-Drought-Restrictions.cfm
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