Fraternity Taxes: Don't Make These 990-N Mistakes

My Journey as a Fraternity Treasurer

As an alumnus who once walked in your shoes, juggling the responsibilities of college life and managing fraternity finances, I understand the importance of keeping things in order. One aspect we can't afford to overlook is handling taxes - it may not be the most exciting topic, but trust me, it's crucial. So, let's dive in together as I share some insights from my experience and help current chapter presidents and treasurers avoid common 990-N mistakes.

Understanding the 990-N (e-Postcard)

Before we get into the nitty-gritty, let's make sure we're on the same page with Form 990-N. Think of it as the tax report card for small tax-exempt organizations like our fraternities. If your fraternity's annual gross receipts stay below $50,000, then 990-N is your go-to form.

The 990-N, also known as the e-Postcard, is a relatively straightforward form designed for smaller tax-exempt organizations. It provides the IRS with basic information about your fraternity's finances, activities, and governance. While it may seem simple, it's essential to approach it diligently to avoid potential issues in the future.

Mistake #1: Missing the Deadline

Ah, deadlines - the bane of every college student's existence. Trust me; they're just as critical in the tax world. Missing the 990-N filing deadline can lead to headaches and unnecessary troubles for your fraternity. The IRS means business when it comes to this stuff.
The deadline for filing the 990-N is the 15th day of the 5th month after the close of your fraternity's tax year. For most fraternities, whose fiscal year ends on December 31st, the deadline is May 15th. Missing this deadline can result in penalties and the loss of tax-exempt status, which is something we definitely want to avoid.

To stay on top of the deadline, I suggest setting up a reminder system well in advance. Mark it on your calendar, create alerts on your phone, and keep your fraternity members informed. Remember, it's better to file early than to scramble at the last minute.

Mistake #2: Inaccurate Information Reporting

Picture this: you've gathered all the financial data, feeling confident about your reporting skills, and submit the 990-N. But wait - you notice you made a mistake in your income and expense reporting. Oops! Accuracy matters, folks.

Providing accurate information on the 990-N is crucial for maintaining the integrity of your fraternity's financial records. The IRS relies on this information to assess your fraternity's tax-exempt status and to ensure that you're fulfilling your tax obligations.

To avoid inaccuracies, take the time to review your fraternity's financial records carefully. Double-check all the numbers, including income from donations, fundraisers, and membership dues. Ensure that expenses are correctly categorized, and be thorough in your documentation.

In my experience, it's beneficial to have multiple sets of eyes review the information before submitting the 990-N. As fraternity leaders, we often have a lot on our plate, and having a second pair of eyes can help catch any mistakes that might have been overlooked.

Mistake #3: Failure to Maintain Adequate Records

As fraternity leaders, we have a lot on our plates. It's easy to overlook the importance of keeping detailed records. But believe me, the IRS wants to see that you've got your finances in order. Trustworthy record-keeping is the way to go.

Proper record-keeping not only helps you accurately complete the 990-N but also protects your fraternity in the event of an IRS audit. Without organized and comprehensive records, you may struggle to substantiate your fraternity's financial activities, potentially leading to compliance issues.

So, what can you do to maintain adequate records? First and foremost, designate a specific person or team responsible for financial record-keeping. Establish a system for documenting all financial transactions, including income and expenses. Utilize accounting software or spreadsheets to keep track of these records systematically.

Investing in a reliable fraternity management software solution, such as Greek Capital Management, can be a game-changer. Such software not only helps with record-keeping but also streamlines various fraternity operations, making your life as treasurer much easier.

Mistake #4: Ignoring Changes in Tax Laws

Tax laws can be as confusing as trying to solve a Rubik's Cube in the dark. But staying informed is crucial to keep our fraternity on the right side of the tax man. Ignoring tax law changes could lead to unintended consequences - and nobody wants that.

Tax laws are subject to frequent updates, and it's essential to stay informed about any changes that could impact your fraternity's tax obligations. Keeping up with tax law changes can be overwhelming, but it's a responsibility we can't afford to ignore.

Consider appointing someone in your fraternity to be the "tax expert." This person's role would be to keep track of tax law changes and educate the rest of the fraternity's leadership team. Staying proactive can help your fraternity adapt to any changes promptly and avoid potential penalties.

Moreover, partnering with a professional tax advisor, like Greek Capital Management, can be invaluable. They are well-versed in fraternity tax compliance and stay updated on any changes in tax laws that may affect your fraternity. Their guidance can save you time, effort, and potential headaches down the road.

Empowering Fraternities with Greek Capital Management

Phew! We've covered quite a bit today, and I hope you've found it helpful. As I reflect on my time as a fraternity treasurer, I wish I had known about Greek Capital Management back then. They offer a stress-free solution to tackle your 990-N filing.

Imagine a team of experts who live and breathe fraternity tax compliance. That's what Greek Capital Management brings to the table. Their expertise can save you from common tax pitfalls.

A Stress-Free 990-N Filing Process

Let's face it - tax season is stressful. Greek Capital Management streamlines the 990-N filing process, making it smooth and painless. No more last-minute scrambles or panic attacks.

Affordability and Value-Added Benefits

You might think that professional tax services are out of reach, but Greek Capital Management offers cost-effective solutions tailored to fraternities. Plus, the value they add to your fraternity's financial health is well worth it.

Testimonials from Satisfied Fraternities

Don't just take my word for it; Greek Capital Management has received praise from numerous fraternities who've used their services. They've helped fraternities across the country navigate tax complexities and ensure smooth 990-N filings.

Handling fraternity taxes may seem daunting, but with the right knowledge and resources, we can all become tax-savvy leaders. Utilize the tips we've discussed here, and consider exploring the benefits of Greek Capital Management's services. Together, we can ensure our fraternities thrive and maintain financial success while upholding our tax responsibilities. Let's take charge and make our fraternal journeys even more memorable!

Phone image

Get a 30 minute demo of GCM and start taking the stress out of running your chapter.

We'll listen to your chapter's challenges and show you how our software can streamline operations. We'll share with you what we've learned from 10,000+ conversations with chapter presidents and treasurers, just like yourself.