Does your organization have political organization taxable income? If so, you may need to file Form 1120-POL, Income Tax Return for Certain Political Organizations. If you do need to file Form 1120-POL, ExpressTaxExempt has got you covered!
Here’s some helpful information to know about Form 1120-POL:
Purpose of the Form
Political organizations and certain exempt organizations file IRS Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations, to report their political organization taxable income and income tax liability section 527.
Who Must File Form 1120-POL?
Form 1120-POL is an annual income tax return that is filed by a political organization, regardless of whether or not it is a tax-exempt organization. If the organization has political organization taxable income exceeding $100 for the taxable year, they should file an annual 1120-POL.
What is a political organization?
A political organization is a party, committee, association, fund (including a separate segregated fund described in section 527(f)(3) set up by a section 501(c) organization), or other organization, organized and operated primarily for the purpose of accepting contributions or making expenditures, or both, to influence the selection, nomination, election, or appointment of any individual to any public office or office in a political organization, or election of Presidential or Vice Presidential electors.
A political organization is subject to tax on its political organization taxable income. A political organization may not deduct the salaries, rents, and other expenses it incurs for its political campaign activity on Form 1120-POL, but only those expenses that are directly related to earning taxable income.
Political organization taxable income is the excess of (a) gross income for the tax year (excluding exempt function income) over (b) deductions directly connected with the earning of gross income (excluding exempt function income). An organization’s taxable income is figured with the following adjustments:
A specific deduction of $100 is allowed
The net operating loss deductions aren’t allowed
The dividends-received deduction and other special deductions for corporations aren’t allowed
Exempt Function Income
Exempt function income is the total of all amounts received from the following sources (to the extent that they are separately segregated only for use for an exempt function).
Contributions of money and property
Membership dues, fees, or assessments paid by a member of a political party
Proceeds from a political fundraising or entertainment event, or from the sale of political campaign materials, if those amounts aren’t received in the active conduct of a trade or business
Proceeds from the conduct of a bingo game, as described in section 513(f)(2)
Form 1120-POL Schedules and Attachments
When filing Form 1120-POL, there may be additional information you’ll need to report. Schedule D, for Reporting Capital Gains and Losses, is often included in filing Form 1120 POL. Additionally, your organization may need to produce attachments such as forms 4562, 4136, and 2439 to report additional IRS required information.
What is the Form 1120-POL Filing Deadline?
Form 1120-POL must be filed on or before the 15th day of the 4th month after the organization’s tax year ends. If an organization operates on a calendar tax year, the organization will have an April 15th deadline to file Form 1120-POL.
Can I file an extension for Form 1120-POL?
Yes. Form 7004 is used to request an automatic tax extension of up to 6 months. If you believe your organization will not be able to file Form 1120 POL by your deadline, you can file Form 7004 to request an extension.
If you do not file your return on time, you may be subject to penalties from the IRS.
As an IRS-authorized e-filing provider, organizations can ensure their Form 1120-POL is e-filed securely and accurately with ExpressTaxExempt. ExpressTaxExempt has all of the helpful features you need to make your e-filing process simple and straightforward. If you need to file Form 1120-POL, get started today with ExpressTaxExempt!