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Most often Lake Associations are registered as tax-exempt by the IRS and do not file an annual tax return. However, this time of year is a good time to review the annual filings that may be required with Minnesota or the IRS. Here is a review of the most common filings that Lake Associations should be aware of as well as background information that may be interesting to you.
This article is a compilation of generally researched information and in no way should be construed as a comprehensive review of all considerations and situations that may be present for all Lake Associations. Lake Associations are advised to rely on their own legal and financial resources. The purpose of this article is to assist Lake Associations in recognizing possible State and Federal filing obligations that they may not be fully aware of.
There are three most common filings or submissions that may need to be reviewed by Minnesota Lake Associations. They are the Minnesota Business Filing with the Office of the Minnesota Secretary of State, IRS Form 990 or 990-N annual reporting requirement for 501(c)(3) and 501(c)(4) corporations, and IRS form 1099s if you have made payments to freelance workers or independent contractors.
Minnesota businesses must file renewals every year to remain active.
If you filed a Certificate of Assumed Name, Minnesota Business Corporation, Foreign Business, or Non-Profit Corporation, or a Cooperative, Limited Liability Company, Limited Liability Partnership or Limited Partnership, you must file an annual renewal once every calendar year, beginning in the calendar year following your original filing with the Secretary of State. Your entity will be “statutorily dissolved” (no longer be recognized as existing in Minnesota) if you fail to file your annual renewal. If your entity has been statutorily dissolved, you may have it retroactively reinstated (as long as the name is still available) by filing a renewal for the current year and paying a fee.
Note: There is not a fee for a Non-Profit to Reinstate if they get Statutorily Dissolved.
Most tax-exempt organizations must annually file IRS Form 990 or 990-N, an informational tax form.
IRS Form 990, 990-N is an informational tax form that most tax-exempt organizations must file annually. In a nutshell, the form gives the IRS an overview of the organization’s activities, governance and detailed financial information.
Form 990 also includes a section for the organization to outline its accomplishments in the previous year to justify maintaining its tax-exempt status. In collecting this information, the IRS wants to ensure that organizations continue to qualify for tax exemption after the status is granted.
A 1099 form is used to document wages paid to a freelance worker or independent contractor. While many business owners aren’t sure when to issue a 1099 form to an independent contractor, doing so is an important part of tax compliance.