Filing tax returns for your homeowners association may feel overwhelming, but the process is actually fairly simple. Knowing what’s required, when it needs to be filed, and the proper forms is a great place to start.
Are We Required to File Returns?
The IRS typically classifies HOAs as corporations, even if you’re registered as a non-profit organization in your association’s home state. Because of this, you’ll need to file the appropriate tax return at the federal level. You can file form 1024 to apply for non-profit status, though this can be an expensive and difficult process, and you will still need to file a return as a non-profit with the federal government.
To understand what’s required for your association, you should talk to a tax accountant or your HOA management company.
What Forms Do We Need to File?
There are two different forms you can fill out as an HOA, 1120 or 1120-H. Form 1120 is a longer form with a more complicated process and can be time consuming and frustrating; however, it has a lower tax rate on the first $50,000 of income. Filing form 1120-H is a much simpler process, but also has a higher tax rate and stricter income requirements.
Learn more about the differences between 1120 and 1120-H here.
When Should the Forms Be Filed?
Your due date will depend on when your fiscal year ends. A typical calendar fiscal year means you’re required to file by April 15th. If your fiscal year ends June 30th, you should file by the 15th three months after.
If you’re unable to file your return by the required due date, you can file form 7004 to apply for an extension.
Still have questions about filing your tax return for your homeowners association? Contact us and we’d be happy to help with the process.