Filing taxes for a start-up Co-op (C-corp, but not a 501(c)(3)

[GoCo-op]

Hello!

I have already used TurboTax to file my personal taxes AND got my refunds back (thanks for that! 🙂

However, I serve on the board of a start-up, non-profit grocery cooperative (NOT a 501(c)(3), but a C-corp), and I was wondering if it would be possible to use TurboTax for our organization? Last year we had it professionaly done, because we had a temporary employee funded by a grant. However, that's not the case this year, so we will only have ownership shares, expenses/bills, and a handful of t-shirt sales to record. Since I have a copy of last year's info available, I was wondering if it's possible to file online via TurboTax if I choose a plan that has accountant consultation?

Thanks for any info!

Regards,

Christa Schubert 

[GoCo-op]

OOPS!

I mean to say, we are an S-corp (we pay taxes) but are run by a volunteer board and will be a non-profit grocery co-op. We are not a giant corporation. 🙂 Pardon the mix-up.

[BillM223]

First, are you really a non-profit that is recognized by the IRS? The IRS sends you a letter with the non-profit determination if you apply for such a status.

If you are a non-profit, you would generally file a 990 or 990-EZ, not a 1120 return. TurboTax does not support this return.

If, however, you have not received a non-profit determination from the IRS, then you would file an 1120 return.

TurboTax can do it, but not with the Online software. Instead, you would buy TurboTax for Business (see here).

[BillM223]

P.S., there are other kinds of corporations that can be non-profit besides a 501(c)(3). If you have a pro bono lawyer available, you should ask them to look into the type of incorporation and whether an IRS determination letter would be appropriate.

[Rick19744 · Accepted solution]

I would not recommend that you attempt to file the cooperative tax return.  While the facts are limited, and don't coincide with what is normally seen here, a cooperative is typically taxed under Subchapter T of the tax code and files a form 1120-C US Income Tax Return for Cooperative Associations.

This return is kind of a niche area and involves allocations to patrons and then issuing patronage dividends.

I would make sure you have good consultation on exactly the type of tax return you should be filing if in fact you are a true cooperative.

[Carl]

Another thing to point out that can be "REALLY" important here. If you are a non-profit, then you can't use any version of TTX to file the tax return.

If you are not a non-profit, then officers (such as you) are required to take an RMD from the S-Corp every year and pay taxes on it. If this is your case, then that means you'll be amending your personal 1040 tax return once the corporate return is completed, filed, and all officers have been issued a K-1 which they are required to include in their personal 1040 tax return.

I understand you wanting to do this yourself to save money. But it "appears" you don't have the necessary knowlege to do so. Therefore in addition to recommending you get professional help this year, I also recommend you get professional help with what i call "the heart of a teacher" that is willing to educate you on this stuff, instead of one with the heart of a banker who "keeps you in the dark" as a way of keeping your business every year.