We collect money for membership fees for another organization. What are our tax implications on a Schedule C for this money?

[martin184241210]

We simply write a check for the total amount collected every quarter and send it to this organization. This money travels through our bank account. How does this get reported on a Schedule C at the end of a year? Since the other organization is reporting it on their taxes, do we have to also pay any taxes on this money?

[MichaelMc · Accepted solution]

As long as you keep very clear records and the disbursements always equal the receipts, there are no tax implications. I would avoid going anywhere near the business' income and expenses accounts. When funds are received, book them as a liability, as they are owed to the other organization. When disbursed, reduce this liability account.

I would suggest looking for a better solution to this in the long run. Perhaps having the organization set up a bank account in its name, that you could make deposits to, but only they could write checks to draw out the funds.