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Unrelated Business Income Compliance Checklist purpose of the following questionnaires is to request your assistance in fulfilling the University\'s annual tax reporting requirements. Your assistance
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How to fill out unrelated business income taxes

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How to fill out unrelated business income taxes

01
Determine if your organization has unrelated business income. Unrelated business income generally includes income from a trade or business that is regularly carried on and is not substantially related to the exempt purpose of your organization.
02
Complete Form 990-T, Exempt Organization Business Income Tax Return. Provide all the necessary information about your organization and its unrelated business income.
03
Calculate the taxable income from unrelated business activities. This can be done using Schedule A of Form 990-T.
04
Determine the appropriate tax rate. The tax rate for unrelated business income is the corporate tax rate, which is currently 21% for most organizations.
05
Pay the tax due. If your organization owes unrelated business income tax, make sure to submit the payment along with the completed Form 990-T by the deadline.
06
Keep proper records. It is important to maintain accurate records of your organization's unrelated business income and related expenses in case of an audit or review by the IRS.

Who needs unrelated business income taxes?

01
Nonprofit organizations that engage in a trade or business activity that is unrelated to their exempt purpose may need to file unrelated business income taxes.
02
Examples of organizations that may need to file unrelated business income taxes include museums that have gift shops, universities that generate income from commercial research activities, and hospitals that operate parking facilities for the general public.

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Unrelated business income taxes are taxes imposed on income from an activity that is not related to a nonprofit organization's tax-exempt purpose.
Nonprofit organizations that generate unrelated business income exceeding $1,000 are required to file unrelated business income taxes.
To fill out unrelated business income taxes, the organization must complete Form 990-T and report income, expenses, and deductions related to unrelated business activities.
The purpose of unrelated business income taxes is to prevent unfair competition between tax-exempt organizations and for-profit businesses.
Information such as income and expenses related to unrelated business activities, deductions, and any exemptions claimed must be reported on unrelated business income taxes.
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