General Business Information
How a business works, and how it is taxed, in plain language.
Every business, no matter its size or structure, follows the same basic formula: money comes in, money goes out, and what is left is what gets taxed. Understanding these three pieces is the foundation for everything else.
💵IncomeMoney your business earns
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🧾Expenses & DeductionsCosts of running the business
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📊Taxable ProfitThe amount you pay tax on
Income
Business income, also called revenue or sales, is all the money your business earns from selling products or providing services. It includes cash, checks, card payments, and payments through online platforms. Whether income is counted when you bill a customer or when you are actually paid depends on your accounting method.
Expenses and deductions
A deduction is a business expense that the tax law allows you to subtract from your income. The general test is that an expense must be ordinary (common and accepted in your line of work) and necessary (helpful and appropriate for your business). In simple terms, a deduction is a cost that helps your business operate and generate income.
Payroll
Wages, salaries, bonuses, and the payroll taxes you pay on your employees.
Rent & utilities
Office, store, or workspace rent, plus electricity, internet, and phone.
Insurance
Business liability, property, workers’ compensation, and similar coverage.
Supplies & inventory
Materials and products you buy to run the business or resell.
Marketing
Advertising, website costs, promotions, and business cards.
Professional fees
Accountants, attorneys, consultants, and other outside services.
Vehicles & travel
Business mileage or vehicle costs, and travel for business purposes.
Equipment
Computers, machinery, and furniture, deducted at once or over several years.
Interest & fees
Interest on business loans and bank or payment processing fees.
Why deductions matter
Deductions lower the profit your business is taxed on. If you spend money paying employees, renting space, and buying supplies, you are not taxed on that money as if you had kept it.
A simple example: A business earns $200,000 in income and has $150,000 in expenses for payroll, rent, supplies, and other costs. Its taxable profit is $50,000, not $200,000.
What is not deductible
Personal expenses are not deductible, and some business expenses, such as meals, are only partly deductible. This is why it is important to keep your business and personal finances separate, starting with a dedicated business bank account.
Keep good records
A deduction is only as good as its paperwork. Keep receipts, invoices, bank statements, and payroll records organized throughout the year. If an expense cannot be documented, it may not be allowed.
Structure decides who pays the tax
The formula above is the same for every business, but the way a business is set up determines who pays tax on the profit: the business itself, or its owners on their personal returns. The structure also affects which tax forms are filed and how the owners are paid.
You do not have to form an entity
A person can run a business without forming a company at all. This is called a sole proprietorship. The business and the owner are treated as one, and the profit is reported on the owner’s personal return. It is the simplest way to operate, but it offers no separation between the owner’s personal assets and the business’s debts.
Many owners choose to form an entity anyway, mainly for two reasons:
- Liability. A properly formed and maintained company can separate the owner’s personal assets, such as a home or savings, from the debts and legal claims of the business. This protection has limits.
- Tax. Different structures are taxed in different ways. The choice can change how profit is taxed, how owners are paid, and which returns must be filed.
Common business structures
- Sole proprietorship. One owner, no separate entity. Profit is reported on Schedule C of the owner’s Form 1040.
- LLC. A limited liability company is created under state law. A single-member LLC is generally taxed like a sole proprietorship, and a multi-member LLC is generally taxed as a partnership, unless the LLC chooses another tax treatment. See LLC.
- S corporation. A business that passes its profit through to its owners, who report it on their personal returns, while meeting specific IRS requirements. See S Corp.
- C corporation. A separate taxpayer that pays tax on its own profit. Owners are taxed again when profits are paid out to them as dividends. See C Corp.
Each structure has its own rules, benefits, and costs. The pages linked above explain how each one works.
Choosing a legal structure is a legal decision as well as a tax one. This page is general information only. See the
Disclaimer.
LLC: Limited Liability Company
Legal protection for the business, with taxes handled on the owners’ personal returns.
What is an LLC?
An LLC is a separate legal entity created under state law. It can own property, sign contracts, open bank accounts, and do business in its own name. Its owners are called members. Because the LLC stands apart from its members, their personal assets are generally protected from the business’s debts and lawsuits, as long as the business is run properly and kept separate from their personal finances.
Two types of LLCs
The number of members determines how the LLC is treated for tax purposes.
Single-member LLC
One owner. For tax purposes the IRS treats it as a disregarded entity, meaning the LLC is ignored and everything is reported on the owner’s personal tax return, usually on Schedule C, or on another schedule depending on the type of income, such as Schedule E for rental income. There is no separate business income tax return.
Multi-member LLC
Two or more owners. By default it is taxed as a partnership. The LLC files its own return (Form 1065), and each member receives a Schedule K-1 showing their share of the income, deductions, and credits.
How the income flows through
How an LLC’s income reaches the IRS depends on whether it has one member or more than one. The two types work very differently, so they are explained separately below.
Single-member LLC
A single-member LLC is disregarded for tax filing, so there is no separate business tax return. Everything is reported on your personal tax return, Form 1040, usually on Schedule C, or on another schedule depending on the type of income, such as Schedule E for rental income. There is still no separate business return.
🏢LLC income & expenses
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📄Schedule CProfit or loss from the business
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🧾Form 1040Your personal return. That’s it.
Multi-member LLC
A multi-member LLC is a “pass-through” business. The LLC itself generally does not pay federal income tax. Instead, the profit or loss passes through to the members. Here is how it works:
1
The LLC earns a profit
Income minus expenses and deductions, like any other business.
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2
The LLC files Form 1065
This return is informational only. No income tax is paid with it.
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3
Each member receives a Schedule K-1
It shows that member’s share of the income, deductions, and credits.
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4
Members report it on their personal returns
The tax is calculated and paid on each member’s Form 1040.
Members are taxed on their share of the profit whether or not they actually withdraw the money. Profit left in the business bank account is still taxable to the members.
Two kinds of members: active and passive
Not every member plays the same role, and the difference affects how much tax each one pays.
Active member
Works in the business and takes part in managing it, similar to a general partner. Their share of the profit is subject to income tax and self-employment tax (Social Security and Medicare).
Passive member
Invests in the business but does not work in it day to day, similar to a limited partner. Their share is subject to income tax but generally not self-employment tax, because it is treated as an investment.
The line between active and passive depends on what the member actually does, not only on their title. Payments made to a passive member for services they perform can also be subject to self-employment tax.
Where the taxes are paid
All of the income tax and self-employment tax generated by the LLC is paid on the members’ personal tax returns, not by the LLC. The LLC’s own return, Form 1065 for a multi-member LLC, is purely informational. It reports the numbers to the IRS and to the members, and no federal income tax is paid with it. Some states and cities do charge entity-level fees or taxes, so local rules matter.
Other tax options
An LLC can also choose to be taxed as an S corporation or a C corporation. These options change how profit is taxed and can make sense in certain situations. We will cover them in their own sections.
Every business is different. This page is general information about how LLCs are taxed. See the
Disclaimer.
C Corporation
A separate corporation that pays tax on its own income.
What is a C corporation?
A C corporation is a corporation taxed separately from its owners for federal income tax purposes. The corporation is owned by shareholders and operates in its own name. “C corporation” describes its federal tax treatment; the corporation itself is formed under state law.
How the income is taxed
The corporation reports its income and deductions on its own federal return, generally Form 1120, and pays tax on its taxable income. Shareholders do not report the corporation’s business profit directly on their personal returns just because they own shares.
🏢Corporation earns incomeRevenue less deductible expenses
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📄Form 1120The corporation reports its income
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💼Corporate taxPaid by the corporation
Why people call it “double taxation”
If the corporation pays tax on its profit and later distributes after-tax earnings as dividends, shareholders may also owe personal tax on those dividends. This two-level tax is often called double taxation. The corporation generally does not deduct dividends it pays to shareholders.
A corporation may also pay an owner who works in the business as an employee. Wages are handled through payroll and are different from dividend distributions.
When a C corporation may be considered
Separate ownership
The corporation can continue operating when shares change hands, subject to its governing documents and state law.
Outside investment
Corporations can issue different classes of stock, which may help when raising investment.
More administration
Expect separate corporate records and tax filings, plus any state and local requirements that apply.
State and city taxes
Federal treatment does not replace state or city filing requirements. A corporation doing business in New York State or New York City may have separate returns or taxes to consider.
The best structure depends on ownership, expected profits, plans for investment, and where the business operates. Ask a tax professional to compare the full federal, state, and local picture before choosing.
S Corporation
A federal tax election that generally passes business income through to shareholders.
What is an S corporation?
An S corporation is generally a corporation that has elected a special federal tax treatment. The election does not replace the corporation’s legal form. A qualifying corporation (and some eligible entities) makes the election with the IRS; the business continues to follow the state-law rules for its legal structure.
How the income flows through
For federal income tax purposes, an S corporation generally passes its income, losses, deductions, and credits through to its shareholders. The corporation files Form 1120-S, and each shareholder receives a Schedule K-1 to report their share on their own return.
🏢S corporation incomeBusiness activity for the year
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📄Form 1120-SThe corporation reports its results
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🧾Schedule K-1Each shareholder reports their share
A shareholder may owe tax on their share of S corporation income even if the corporation does not distribute that amount in cash. Some income or taxes may still be taxed at the corporation level.
Shareholders who work in the business
If a shareholder performs services for the S corporation, the corporation generally must pay reasonable compensation as wages before treating payments for those services as distributions. Wages are subject to payroll tax and withholding rules. See the Payroll page.
Who may elect S corporation treatment?
Federal eligibility rules include limits on the number and type of shareholders and generally require one class of stock. The corporation must meet the IRS requirements and file Form 2553 with the required shareholder consents. Filing deadlines and late-election relief rules apply.
See the IRS guidance on S corporation requirements and Form 2553 timing and instructions.
New York State and New York City
A federal S election does not automatically make a corporation a New York State S corporation. New York State generally has a separate election process, using Form CT-6, with limited exceptions and its own filing rules.
New York City does not recognize the S corporation election for city tax treatment. A federal S corporation doing business in NYC may still be subject to the City’s General Corporation Tax and related filing requirements. The federal election may remain valid for federal purposes, but it does not make the business a pass-through entity for NYC tax purposes.
For the current rules, see the NYC Department of Finance General Corporation Tax guidance and the New York State S corporation guidance.
S corporation treatment can help in some situations, but eligibility, payroll, shareholder, and state or city rules matter. Review the full picture with a tax professional before making an election.
General Personal Information
How a personal tax return works, in plain language.
A personal tax return follows the same path for everyone: you report your income, subtract the amounts the law allows, calculate the tax, and then compare it with what you have already paid during the year. The result is either a refund or a balance due.
💵IncomeWages, business, investments, and more
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🧾DeductionsStandard or itemized
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📊Taxable IncomeThe amount your tax is based on
Tax is calculated on your taxable income. Credits then reduce the tax itself, and the tax is compared with what was already paid through paycheck withholding or estimated payments. If you paid more than you owe, you receive a refund. If you paid less, you owe the difference.
Types of income
Most people have more than one kind of income, and each is reported a little differently.
Wages (W-2)
Pay from an employer. Income tax is usually withheld from each paycheck.
Self-employment (1099)
Pay from clients or customers, with nothing withheld. You are responsible for the tax yourself.
Investment income
Interest, dividends, and profit from selling investments.
Other income
Retirement distributions, unemployment benefits, and other taxable payments.
Filing status
Your filing status is based on your marital and family situation on the last day of the year. It affects your tax rates, the size of your standard deduction, and which credits you can claim.
Single
Unmarried and not qualifying for another status.
Married filing jointly
A married couple reporting income and deductions together on one return.
Married filing separately
Each spouse files their own return.
Head of household
Unmarried and supporting a qualifying person at home, subject to specific rules.
Standard deduction or itemizing
Most people can subtract either the standard deduction, a fixed amount based on filing status, or their itemized deductions, whichever gives the lower tax. Itemizing means adding up specific expenses, such as:
Mortgage interest
Interest paid on a loan for your home, within the allowed limits.
State and local taxes
Income and property taxes you paid, subject to a limit. For 2026 the limit is $40,400 ($20,200 if married filing separately), reduced at higher incomes. Other years have different limits.
Charitable gifts
Donations to qualified organizations, with proper receipts.
Medical expenses
Out-of-pocket costs above a set share of your income.
If your itemized total is close to the standard deduction, it is worth running the numbers both ways.
Deductions and credits
A deduction lowers the income that gets taxed. A credit reduces your tax bill directly, dollar for dollar, which usually makes credits more valuable. Some credits are refundable, meaning you can receive money back even if you owe no tax.
Child and family credits
For taxpayers supporting children or other dependents.
Education credits
For tuition and related costs of higher education.
Earned income credit
For working people with lower to moderate income.
Retirement savings credit
For lower-income taxpayers who contribute to a retirement account.
Eligibility rules, income limits, and amounts change from year to year. Ask before assuming you qualify.
Self-employed and 1099 income
If you work for yourself, no one withholds tax from your pay. You owe income tax plus self-employment tax (Social Security and Medicare), and you generally make quarterly estimated payments during the year to avoid penalties. Business income and expenses are usually reported on Schedule C of your personal return. This is also how a single-member LLC is taxed, as explained on the LLC page. Tracking your business expenses carefully can significantly reduce what you owe. If you pay others to help you, see 1099 Contractors and Payroll.
Owning a home
If you itemize, mortgage interest and property taxes on your home may be deductible. When you sell your home, you may be able to exclude part or all of the gain from tax if you owned it and lived in it for enough of the years before the sale. Keep records of what you paid for the home and of major improvements, since they affect your gain.
Investments and capital gains
Selling an investment for more than you paid creates a capital gain. Investments held longer than one year are generally taxed at lower long-term rates than those held a year or less. Losses can often offset gains. Keep your brokerage statements and cost-basis records.
Rental property
Owning rental property has its own set of rules, including how rental income is reported and how depreciation works. It has its own
Real Estate section on this site, covering rental property, depreciation, buying and selling, and New York rules.
New York residents
Federal rules are only part of the picture. New York State residents file a state return in addition to the federal one, and residents of New York City also owe city income tax. People who live elsewhere but earn income in New York may also have a filing requirement. State and city rules differ from the federal rules, so they should be reviewed separately.
Deadlines and records
Individual federal returns are generally due in mid-April. An extension gives you more time to file, but not more time to pay. Any tax owed is still due by the original deadline. Keep copies of your returns, W-2s and 1099s, and receipts for deductions, ideally for at least three years after filing.
Every situation is different. This page is general information only. See the
Disclaimer.
General Real Estate Information
How real estate is taxed, whether you rent it, hold it, or sell it.
Real estate is taxed differently from most other assets. You can deduct the costs of owning it, you can deduct a portion of the building’s cost every year through depreciation, and you are taxed on the profit when you sell. How much you pay depends on how you use the property and how you own it.
Your basis in the property
Your basis is, in simple terms, your investment in the property for tax purposes. It starts with what you paid, including certain closing costs, grows when you make improvements, and shrinks by the depreciation you deduct. This number matters most when you sell, because your taxable gain is measured against it.
🏢Purchase CostPrice plus certain closing costs
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🔧ImprovementsAdded over time
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📊Adjusted BasisAfter subtracting depreciation
Ways people are involved in real estate
The tax treatment depends on what you are doing with the property.
Landlords
Collect rent from tenants. Income and expenses are generally reported on Schedule E. See
Rental Property.
Long-term investors
Hold property for appreciation, rental income, or both. Profit on a sale is generally a capital gain.
Buyers and sellers
Buy, improve, and resell quickly. Profit may be taxed as ordinary business income, and may be subject to self-employment tax.
Developers and builders
Build or substantially improve property to sell. The property is usually treated as inventory, not as an investment.
Residential and commercial property
Residential
Apartments, houses, and other property rented for people to live in. The building is generally depreciated over 27.5 years.
Commercial
Offices, retail, warehouses, and other nonresidential property. The building is generally depreciated over 39 years. Commercial leases often shift taxes, insurance, and maintenance to the tenant.
How you own it matters
The same property is reported differently depending on the owner.
Individual
Rental income and expenses go directly on your personal return, on Schedule E.
Single-member LLC
Disregarded for tax purposes, so it is reported the same way as owning it personally, with added liability protection.
Multi-member LLC
Taxed as a partnership. The LLC files Form 1065 and each member receives a K-1. See the
LLC page.
Corporation
Holding real estate inside a corporation can create extra tax when the property is sold or distributed, so it is usually reviewed carefully first.
Keep your records
Real estate records matter for years. Keep the closing statement from every purchase and sale, receipts for improvements, loan documents, leases, and your depreciation schedules. You will need them to calculate your basis when you eventually sell.
How rental income is taxed depends on how the property is owned and used, so each situation is different. This page is general information only. See the
Disclaimer.
Rental Property
Reporting rental income and expenses, and the rules that can limit your losses.
If you own property that you rent to others, the rental activity is generally reported on Schedule E of your personal tax return. Income from a multi-member LLC arrives on a K-1 and is also reported there. A single-member LLC is reported as if you owned the property personally.
🏠Rent CollectedMoney from tenants
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🧾Expenses & DepreciationCosts of owning the property
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📊Net Rental IncomeOr a loss, subject to limits
What counts as rental income
Rent payments
Regular rent, including payments received for the use of a space or building.
Advance rent
Rent received early is generally taxed in the year you receive it, even if it covers a later period.
Security deposits
Not income when you receive them, but income if you keep them, for example for unpaid rent.
Tenant-paid expenses
If a tenant pays a bill that you owe, that payment is generally rental income to you.
Common deductible expenses
Mortgage interest
Interest on loans used to buy or improve the rental property.
Property taxes
Real estate taxes on the rental property.
Insurance
Landlord, property, and liability coverage.
Repairs and maintenance
Work that keeps the property in working condition.
Management and professional fees
Property managers, accountants, attorneys, and leasing costs.
Utilities and services
Utilities you pay, cleaning, landscaping, and similar services.
Repairs versus improvements
A repair keeps the property in its current condition and is generally deducted right away. An improvement adds value, extends the property’s life, or adapts it to a new use. Improvements generally must be capitalized and recovered through depreciation. Some improvements can qualify for accelerated write-offs, as explained on the Depreciation page.
Rental losses can be limited
Rental activities are generally treated as passive. Passive losses can usually offset only passive income, not wages or business income. There are important exceptions.
Active participation allowance
If you actively participate in the rental, such as approving tenants and setting rent, you may deduct up to $25,000 of rental losses against other income. The allowance phases out as your income rises between $100,000 and $150,000.
Real estate professionals
If you spend more than half of your working time, and more than 750 hours a year, in real estate businesses in which you materially participate, rental losses may not be treated as passive.
Losses that cannot be used in a year are not lost. They are carried forward, and are generally released when you sell your entire interest in the property in a fully taxable sale to an unrelated person. Short-term rentals, where the average guest stay is seven days or less, follow different rules and may be treated as a business instead of a rental activity.
Using a property personally
If you also use a rental property as your own vacation home, special rules limit your deductions once your personal use passes a certain number of days. Keep a log of rental days and personal days.
Commercial rentals
Commercial property is reported the same way, but leases work differently. In a “triple net” lease, the tenant pays property taxes, insurance, and maintenance directly or reimburses you, which changes both your income and your expenses. Good bookkeeping makes clear what is income, what is reimbursement, and what is your own cost.
Paying contractors and managers
If you pay people for services in your rental business, such as repairs, cleaning, or management, you may need to issue Form 1099 at year-end. See 1099 Contractors.
Rental property in New York comes with state and city rules too. See
New York Real Estate. For questions about your own properties, contact us below.
Depreciation
Deducting the cost of buildings and their components over time, including bonus depreciation and Section 179.
The IRS lets you recover the cost of income-producing property over time, because buildings wear out. This yearly deduction is called depreciation. For many property owners it is the largest tax deduction they have, since it reduces taxable income without costing any cash.
The basics
Only the building is depreciated. Land is never depreciable, so the purchase price is split between land and building. Depreciation begins when the property is ready and available for rent, and it is generally straight-line over a fixed recovery period.
Residential rental property
Depreciated evenly over 27.5 years.
Commercial (nonresidential) property
Depreciated evenly over 39 years.
🏢Building CostNot including land
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📅Recovery Period27.5 or 39 years
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🧾Yearly DeductionTaken on your tax return
Depreciation is treated as “allowed or allowable.” Even if you forget to claim it, the IRS treats it as taken when you sell. Missing it does not avoid recapture, but missed depreciation can often be caught up by filing Form 3115.
Accelerated depreciation
Spreading a building’s cost over 27.5 or 39 years is slow. Accelerated depreciation lets owners deduct much more in the early years. It starts with a cost segregation study, which separates a purchase into its parts instead of treating it all as one building.
Personal property components
Appliances, carpeting, certain fixtures, and similar items, with 5- or 7-year recovery periods.
Land improvements
Parking lots, sidewalks, fencing, landscaping, and similar items, with a 15-year recovery period.
Qualified improvement property
Interior improvements made to the inside of an existing commercial building, with a 15-year recovery period.
These shorter-life components are what bonus depreciation and Section 179 can write off quickly.
Bonus depreciation
Bonus depreciation lets you deduct a large part of the cost of qualifying property in the first year, instead of spreading it out. Under current federal law, bonus depreciation is 100% and is permanent for qualifying property acquired after January 19, 2025.
What qualifies- Property with a recovery period of 20 years or less
- Cost segregation components, land improvements, and qualified improvement property
- Used property, if it is new to you
What does not- The building itself, since it is 27.5 or 39 years
- Land
- Property that does not meet the acquisition and use rules
Bonus depreciation has no dollar cap and no taxable income requirement. It is applied automatically unless you choose to opt out for a class of property. The loss limits described on the Rental Property page can still restrict how much of the deduction you can use in a given year.
A simple example: You buy a commercial property and a cost segregation study identifies $200,000 of the purchase price as shorter-life components. With 100% bonus depreciation, you can deduct the full $200,000 in the first year, instead of spreading it over many years.
Section 179 expensing
Section 179 lets you elect to deduct the cost of qualifying property in the year you place it in service. For 2026 the limit is $2,560,000, and it begins to phase out dollar for dollar once total qualifying purchases exceed $4,090,000. Section 179 is limited to your business taxable income, so it cannot be used to create a loss.
Real estate uses- Qualified improvement property to the interior of a commercial building
- Roofs, HVAC, fire protection, and alarm and security systems on nonresidential buildings
- Equipment and furniture used in your business
Limits to know- It cannot be used for a residential rental building or for land
- Property you lease to others has extra restrictions for individual owners
- You choose item by item, which gives flexibility
Section 179 often fits property that the owner uses in their own business, such as a building they occupy. For rental property it is more restricted than bonus depreciation, so the details need to be reviewed in each case.
Bonus depreciation or Section 179?
Bonus depreciation
No dollar cap, no income limit, and applies automatically. Usually the simpler choice for rental property and cost segregation components.
Section 179
Capped, limited to business income, and elective. Flexible by asset, and sometimes useful for improvements to commercial buildings you occupy.
The New York State rule
New York State does not follow federal bonus depreciation. For personal income tax, New York requires you to add back the bonus depreciation you took on your federal return, and to depreciate the property on your New York return under the regular schedule, as if bonus had never been claimed.
Federal returnThe qualifying cost is deducted right away through bonus depreciation.
New York returnThe bonus amount is added back to income, and the cost is depreciated gradually over the regular recovery period.
- It is a timing difference. The addback is recovered over the life of the property through New York depreciation, and gain or loss is adjusted when you sell.
- You keep two sets of records, one federal and one for New York, with the adjustments reported on New York forms such as IT-225 and IT-398.
- Federal savings are not fully matched in New York in the first year, because the addback raises your New York income that year.
- Section 179: for personal income tax, New York generally allows the federal Section 179 deduction, with an exception for certain heavy SUVs. Rules for corporations and for New York City business taxes can differ. New York City decoupled from the larger federal Section 179 limits beginning in 2025.
- New York City residents are generally taxed by the City based on their New York State return, so the same adjustments carry through.
What happens when you sell: recapture
Depreciation lowers your basis, so it increases your gain when you sell. The part of the gain caused by depreciation is called recapture.
Personal property components
Gain up to the depreciation taken, including bonus and Section 179, is generally taxed as ordinary income.
Building depreciation
Gain attributable to building depreciation, called unrecaptured Section 1250 gain, is generally taxed at a rate of up to 25%.
Accelerating deductions lowers your tax now, but can increase the tax when you sell. Whether it makes sense depends on how long you plan to hold the property and what you plan to do afterward. A 1031 exchange, explained on the Buying and Selling page, can defer recapture.
Accelerated depreciation can be a powerful tax tool, but the rules are detailed. Contact us below to see whether a cost segregation study makes sense for your property.
Buying and Selling
How purchases and sales affect your basis, your gain, and your tax.
Buying a property
The closing statement from your purchase is one of the most important tax documents you will keep. It determines your starting basis.
Added to your basis
Many closing costs are added to the cost of the property, such as title fees, recording fees, legal fees, surveys, and transfer taxes you pay.
Treated separately
Real estate taxes you owe at closing and prorated rents are handled differently, and loan costs are generally recovered over the life of the loan.
You also need to allocate the price between land and building, because only the building can be depreciated. A property tax assessment or an appraisal is commonly used for the split.
Selling a property
Your gain or loss is measured by what you receive compared with your adjusted basis.
💵Sale PriceLess selling costs
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📊Adjusted BasisCost, improvements, less depreciation
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🧾Gain or LossReported on your return
Held more than one year
Generally a long-term capital gain, taxed at lower rates, plus depreciation recapture as explained on the
Depreciation page.
Held one year or less
Generally a short-term gain, taxed at ordinary income rates.
Sales of rental and business property are generally reported on Form 4797, and other gains on Schedule D. Higher-income taxpayers may also owe the 3.8% net investment income tax on some gains.
If you buy and resell regularly
If you buy, improve, and resell properties as a business, the IRS may treat you as a dealer. Dealer profits are generally ordinary business income, may be subject to self-employment tax, and do not qualify for the capital gains rates or a 1031 exchange. How often you sell, how long you hold, and your intent all matter.
1031 exchanges
A 1031 exchange lets you defer the tax on a sale when you reinvest the proceeds in another qualifying property. The tax is not eliminated, but postponed, and it also defers depreciation recapture. It applies to real estate held for business or investment, not to your home or to property you hold as inventory.
1
Sell through a qualified intermediary
The sale proceeds must be held by an intermediary. If you receive the money yourself, the exchange fails.
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2
Identify replacement property within 45 days
You must identify the property you plan to buy in writing within 45 days of the sale.
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3
Close within 180 days
The purchase must be completed within 180 days of the sale, or the due date of your return including extensions, if earlier.
The deadlines are strict and cannot generally be extended. A 1031 exchange is reported on Form 8824. Speak with us before you sell, not after, since the exchange must be planned in advance.
Selling your own home
Your personal residence follows different rules, including a possible exclusion of part or all of the gain. See the Personal page.
Before you buy or sell, contact us below. A little planning can make a significant difference in your tax.
New York Real Estate
Taxes and filing rules that apply to New York property.
New York real estate comes with taxes and rules that do not exist in most other states. They affect what you pay at closing, how your depreciation is calculated, and who has to file.
Taxes at closing
State transfer tax
New York State charges a real estate transfer tax on sales, generally paid by the seller.
City transfer tax
New York City adds its own real property transfer tax, also generally paid by the seller.
Mansion tax
Buyers of residential property priced at $1 million or more pay a “mansion tax,” with higher rates on more expensive purchases in New York City.
Rates, thresholds, and who pays can change and can depend on the type of property and the parties. Check the current rules before any closing.
Depreciation in New York
New York State does not follow federal bonus depreciation. You must add the bonus amount back on your New York return and depreciate the property over the regular schedule. This means two sets of depreciation records. The details, including Section 179, are on the Depreciation page.
New York City residents
If you live in New York City, you owe city income tax in addition to state and federal tax. It is generally based on your New York State return, so the state’s adjustments, including depreciation adjustments, carry through. New York City also has separate business taxes with their own rules.
Selling New York property as a nonresident
If you do not live in New York, a gain from selling New York real estate is still New York income. Nonresident sellers may have to make an estimated tax payment around the time of the sale, and must file a New York return.
Co-ops and condos
If you own a co-op apartment, you may be able to deduct your share of the building’s mortgage interest and real estate taxes, which are passed through in your maintenance payments. Condo owners deduct their own mortgage interest and property taxes directly.
New York rules change often. For questions about a New York property you own or are buying, contact us below.
Payroll
What it takes to pay employees correctly, and the taxes that come with it.
When you hire an employee, you take on a new role: you become a tax collector for the government. You must withhold taxes from each paycheck, add taxes of your own as the employer, deposit the money on time, and file regular reports. Done right, it runs smoothly. Done wrong, penalties add up quickly.
💼Gross PayWhat the employee earned
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🧾WithholdingTaxes and deductions held back
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💵Net PayWhat the employee takes home
The money you withhold does not belong to you. You hold it for the government, and you must send it in, along with the employer’s own share of the taxes.
Before the first paycheck
1
Get your numbers and register
Obtain an Employer Identification Number (EIN) and register with the state for withholding and unemployment insurance.
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2
Collect the right forms
Each new employee completes a Form W-4 for federal withholding, a New York form IT-2104 for state withholding, and a Form I-9 to confirm they may work in the United States.
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3
Report the new hire
In New York, new and rehired employees must be reported to the state within 20 days of starting.
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4
Arrange required insurance
Workers’ compensation, disability benefits coverage, and Paid Family Leave must be in place before you start paying wages.
Taxes withheld from the employee
Federal income tax
Based on the employee’s Form W-4 and their pay.
Social Security and Medicare
6.2% for Social Security and 1.45% for Medicare, withheld from the employee’s pay.
New York State and City tax
State income tax, plus New York City or Yonkers tax for employees who live there.
Paid Family Leave
New York employees fund Paid Family Leave through a payroll deduction that the employer must collect.
Taxes the employer pays
Social Security and Medicare
The employer pays a matching 6.2% and 1.45%, on top of the employee’s share.
Federal unemployment (FUTA)
Paid on the first $7,000 of each employee’s wages. A credit for paying state unemployment tax generally reduces the effective rate.
New York unemployment insurance
Paid on wages up to a wage base set each year. The rate depends on your experience with the state.
MCTMT
A New York commuter tax that applies to employers with large payrolls in the New York City metropolitan area.
For 2026, Social Security tax applies to wages up to $184,500 per employee. Medicare tax applies to all wages, and an additional 0.9% Medicare tax is withheld from an employee’s wages above $200,000.
Deposits and filings
Deposits
Withheld taxes and the employer’s share must be deposited with the IRS on a schedule. Most small employers deposit monthly, by the 15th of the following month. Larger employers deposit semiweekly. Your schedule depends on how much tax you reported in an earlier lookback period.
Quarterly returns
Federal Form 941 and New York Form NYS-45 are due by April 30, July 31, October 31, and January 31, each reporting the quarter just ended.
Year-end
Federal Form 940 for unemployment tax, and Forms W-2 and W-3 for employees’ wages, are generally due by January 31.
Unpaid payroll taxes are personal. Withheld taxes are held in trust for the government. If they are not paid, the IRS can hold the owners and other responsible individuals personally liable, even if the business is an LLC or a corporation. This is called the trust fund recovery penalty.
New York requirements at a glance
- Withholding: New York State, plus New York City and Yonkers tax for residents of those cities.
- Unemployment insurance: registered and reported through the New York State Department of Labor.
- Quarterly filing: Form NYS-45 combines withholding, wage reporting, and unemployment insurance. It must be e-filed.
- Disability benefits and Paid Family Leave: required coverage, with limited employee contributions allowed for disability and employee-funded Paid Family Leave.
- Workers’ compensation: nearly all New York employers must carry it, even with one employee.
- New hires: reported within 20 days of starting.
Owners and family
Owners of sole proprietorships, partners, and members of LLCs taxed as partnerships generally are not employees of their own businesses and are not paid through payroll. Shareholders of an S corporation who work in the business, however, must be paid reasonable wages through payroll. See the S Corp page. If you hire household help, such as a nanny or housekeeper, payroll taxes may apply once their pay passes an annual threshold, which is $3,000 for 2026.
Payroll mistakes are expensive, and deadlines come quickly. Contact us below to talk about setting up or reviewing your payroll.
1099 Contractors
Paying independent contractors and reporting what you pay them.
An independent contractor is not your employee. You do not withhold taxes or pay employer taxes on what you pay them. Instead, you report the payments to the IRS on Form 1099-NEC after the year ends, and the contractor pays their own income and self-employment tax.
How it works
1
Collect a Form W-9 before paying
The contractor provides their name, address, and taxpayer identification number. Get it up front, not at year-end.
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2
Pay and track during the year
Keep invoices, payment records, and a running total for each contractor.
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3
File Form 1099-NEC by January 31
Send a copy to the contractor and file with the IRS by the same date.
Who needs a 1099
Individuals and unincorporated businesses
Sole proprietors, single-member LLCs, and partnerships you pay for services in your business generally receive a 1099-NEC.
Corporations
Payments to corporations generally do not require a 1099. There are exceptions, such as legal and medical payments.
Paid by card or payment app
Payments by credit card or by a third-party app are reported by the payment processor on Form 1099-K, not by you.
Rent and other payments
Rent paid to an individual landlord, royalties, and certain other payments are reported on Form 1099-MISC.
The threshold changed. For payments made after December 31, 2025, you generally must issue a 1099-NEC or 1099-MISC once you pay a person $2,000 or more during the year, up from $600. Payments made in 2025 still use the $600 threshold. Starting in 2027 the threshold is adjusted for inflation.
Deadlines and penalties
January 31
Form 1099-NEC is due to the contractor and to the IRS by January 31. There is no automatic extension.
E-filing
If you file 10 or more information returns in total during the year, you must file them electronically.
Penalties
Penalties apply for late, missing, or incorrect forms, and they grow the later you file and when the failure is intentional.
Backup withholding
If a contractor does not give you a taxpayer identification number, or the IRS notifies you that the number is wrong, you may have to withhold 24% of the payments and send it to the IRS. This is another reason to collect a Form W-9 before you make the first payment.
Property owners and managers
Rental property owners who run their rentals as a business may need to issue 1099s to the people they pay for repairs, cleaning, landscaping, and similar services. Property managers who collect rent for owners generally report it to the owners. See Rental Property.
If you are the contractor
If you receive a 1099-NEC, the income is generally reported on Schedule C of your personal return, and you owe self-employment tax in addition to income tax. You may need to make quarterly estimated payments. See the Personal page.
Is this person really a contractor?
Treating a worker as a contractor is only allowed if they truly are one. See Employee or Contractor?
Not sure who needs a 1099, or missed collecting a W-9? Contact us below and we will help you sort it out before the deadline.
Employee or Contractor?
Why the label matters, and how the IRS decides.
Whether a worker is an employee or an independent contractor decides who pays payroll taxes, who provides insurance, and what the business owes. Mislabeling a worker is one of the most common and costly payroll mistakes. The label in a contract does not decide the question. The actual working relationship does.
What the IRS looks at
The IRS weighs three categories of evidence. No single factor decides.
Behavioral control
Does the business control what the worker does and how they do it, through instructions, training, or set procedures?
Financial control
Who pays for tools and expenses? Can the worker make a profit or take a loss? Do they offer services to other clients?
Type of relationship
Is there a written contract? Are benefits provided? Is the relationship ongoing, and are the services central to the business?
Common signs
Often an employee- Works set hours that you decide
- Uses your equipment and workspace
- Is trained by you and follows your methods
- Works mostly or only for you
- Is paid by the hour or a salary, on an ongoing basis
Often a contractor- Runs their own business and has other clients
- Supplies their own tools and workspace
- Decides how and when the work gets done
- Sends invoices and is paid by the project
- Can earn a profit or lose money on the job
What happens when it is wrong
- Back taxes: the business may owe the payroll taxes that should have been withheld and paid, plus penalties and interest.
- Personal exposure: owners and responsible individuals can be held personally liable for unpaid withheld taxes.
- State problems: workers may qualify for unemployment or workers’ compensation, and the state can assess what the business should have paid.
- Relief may be available: in some situations the IRS offers relief or a voluntary program for reclassifying workers going forward.
New York
New York State agencies apply their own tests and tend to look closely at classification. In construction, New York presumes that a worker is an employee unless the business meets specific legal tests. This matters for developers, builders, and property owners who hire tradespeople directly.
Not sure?
If you are unsure how a worker should be classified, review it before you hire or pay them. A worker or a business can also ask the IRS for an official determination, but it can take months, so a review up front is usually the better route. See also Payroll and 1099 Contractors.
Classification depends on the facts of each situation. Contact us below to review your workers.
Sales Tax
Collecting, reporting, and paying sales tax in New York.
If your business sells taxable goods or services, you are required to collect sales tax from your customers and send it to the state. The tax is not your money and it is not your expense. You collect it on behalf of the government, and you are responsible for getting it right.
🛒Customer PaysPrice plus sales tax
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🏢You Collect ItAnd hold it in trust
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🏛️You File and PayTo New York State
Getting set up
1
Register for a Certificate of Authority
You must register with the New York Tax Department at least 20 days before you start making taxable sales. Selling from home counts.
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2
Charge the correct tax
Collect the right rate on taxable sales, and only accept an exemption when you have the proper paperwork.
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3
File a return every period
Returns are due for every period you are registered, even if you had no sales.
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4
Keep your records
Keep invoices, exemption certificates, and returns for at least three years.
The rate
New York State
The state rate is 4%. Counties and cities add their own taxes on top.
New York City
The combined rate is 8.875%: 4% state, 4.5% city, and a 0.375% commuter district surcharge.
Where it applies
The rate depends on where the customer receives the item or service, not where your business is located.
What is taxable
In New York, most goods are taxable, while services are generally not taxable unless the law specifically lists them.
Goods
Tangible items such as products, equipment, and furniture.
Prepared food
Restaurant meals, takeout, and catered food.
Certain services
Repair and maintenance, cleaning, landscaping, storage, parking, and protective services.
Other items
Hotel stays, admissions to entertainment, and prewritten software, including most software subscriptions.
What is exempt
Groceries
Most food bought for home consumption.
Medicine
Prescription and over-the-counter medicine.
Clothing and footwear under $110 per item
Exempt from the state tax. Local treatment varies, and in New York City it is fully exempt.
Items bought for resale
Exempt when the buyer gives you a resale certificate (Form ST-120).
Exempt organizations
Qualifying nonprofits and government entities, with the right documentation.
Capital improvements
Exempt for real property when documented with Form ST-124. See below.
No paperwork, no exemption. If a customer says a sale is exempt, you need the proper certificate on file. If you do not have one, you can be held responsible for the tax.
Filing and due dates
Quarterly
The default for most businesses. Filed on Form ST-100.
Part-quarterly (monthly)
Required once taxable sales reach $300,000 in a quarter. You file more often, and pay monthly.
Annual
For small businesses that owe $3,000 or less a year, once the state notifies them. Filed on Form ST-101.
Returns are due on the 20th of the month after the period ends. Quarters run on the state’s own calendar:
- March through May: due June 20
- June through August: due September 20
- September through November: due December 20
- December through February: due March 20, which is also the due date for annual filers
Most businesses must file and pay online. A return is required even when you had no sales, and a late zero return can still carry a penalty.
Real estate owners and contractors
Sales tax comes up in real estate more often than people expect.
Repairs and maintenance
Repairing or maintaining property, and installing items, is generally a taxable service. Contractors collect tax on it.
Capital improvements
A permanent improvement that adds value to real property is generally exempt. The owner gives the contractor Form ST-124 to document it.
Whether work is a repair or a capital improvement is often a close call, and it affects both the contractor’s sales tax and the owner’s depreciation. Rent for real property is generally not subject to sales tax, but related charges such as parking or cleaning services may be. See Rental Property and Depreciation.
Selling into New York from elsewhere
A business outside New York may also have to collect New York sales tax. Having a physical presence in the state creates the requirement right away. Without one, a seller generally must register once it passes more than $500,000 in sales and more than 100 transactions into New York over the previous four quarters.
Use tax
If you buy a taxable item without paying New York sales tax, such as equipment purchased online from an out-of-state seller, you generally owe use tax at the same rate. Registered businesses report it on their sales tax return.
Sales tax is a trust fund, and the liability can be personal. Collected sales tax belongs to the state. If it is not paid, owners, officers, partners, members, and other responsible persons can be held personally liable for the full amount, even if the business is an LLC or a corporation and even if someone else prepares the returns. Many businesses keep collected tax in a separate bank account. Payroll taxes work the same way, as explained on the
Payroll page.
Sales tax rules depend on what you sell and where. Contact us below to review your situation, register, or catch up on missed returns.
Congregation
Tax rules for synagogues.
Synagogues hold a special place in tax law. A synagogue that qualifies as a tax-exempt 501(c)(3) organization is generally not taxed on income that supports its religious purpose, and gifts to it are generally tax-deductible for donors. It is also treated differently from other nonprofits, most notably when it comes to annual filing.
🕍SynagogueTax-exempt 501(c)(3)
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📄No Annual Form 990Generally not required
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🧾Other ObligationsPayroll, records, and more
What 501(c)(3) status means
Exempt status comes with rules. A synagogue must operate for its religious purpose, and the rules below apply whether or not it files an annual return.
No private inurement
No part of the synagogue’s income may benefit insiders such as officers, board members, or the rabbi, beyond reasonable pay for services.
Reasonable compensation
Pay to the rabbi and staff must be reasonable. Excessive pay can create tax penalties and put exempt status at risk.
No political campaigning
A synagogue cannot support or oppose any candidate for public office. Nonpartisan voter education is generally allowed.
Limited lobbying
Efforts to influence legislation cannot be a substantial part of the synagogue’s activities.
Annual filing
Unlike most nonprofits, synagogues are generally not required to file Form 990, the annual information return, or the shorter 990-N e-postcard. This is one of the biggest differences between a synagogue and a regular nonprofit. See Nonprofits.
Not having to file a Form 990 does not mean having no tax filings. A synagogue still keeps books and records that support its exempt status, and it still has the filings below.
What a synagogue still files
Payroll returns
If the synagogue pays employees, it files Form 941 quarterly and issues Forms W-2 and W-3. See
Payroll.
Forms 1099
Payments to independent contractors, such as teachers or tradespeople, may require a 1099. See
1099 Contractors.
Form 990-T
If the synagogue earns $1,000 or more of gross income from a business unrelated to its religious purpose, it files Form 990-T and may owe tax. See
Nonprofits for how this works.
Rabbis and staff
- Rabbis are treated specially. A rabbi who qualifies as clergy for tax purposes is generally an employee for income tax, but pay for performing religious duties as clergy is not subject to Social Security and Medicare withholding. Instead, the rabbi pays self-employment tax on their own return.
- No required withholding. A synagogue is generally not required to withhold income tax from a rabbi’s pay, though the rabbi may ask for withholding or make estimated payments.
- Housing allowance. A home provided by the synagogue, or a housing allowance, can be excluded from a rabbi’s income tax, within limits, but it still counts when figuring the rabbi’s self-employment tax. The allowance must be designated in advance by official action of the synagogue.
- Other employees. Staff who are not performing religious duties as clergy, such as administrators or teachers, generally have Social Security and Medicare withheld, like any other employee.
Donations
For any single gift of $250 or more, a donor needs a written acknowledgment from the synagogue to claim a deduction. The acknowledgment states the amount and whether the donor received anything in return, or only intangible religious benefits. If a donor pays more than $75 and receives goods or services, such as a dinner, the synagogue must give a written disclosure of the value received.
New York
Synagogues are generally exempt from registering with the New York Attorney General’s Charities Bureau. A separate charitable program run by the synagogue can be treated differently. New York also has its own rules on sales tax and property tax, which are separate from federal status.
Every synagogue is different, and the rules for rabbi compensation and housing can be tricky. Contact us below to review your synagogue’s situation.
Disclaimer
Please read this notice before relying on anything on this site.
The content on this website is provided for general informational purposes only. It is not tax, legal, accounting, financial, or investment advice, and it should not be treated as such. Please do not rely on this site for legal advice.
Information only
- General in nature. The articles explain tax topics in broad terms. They do not take into account your particular facts, and they may not apply to your situation.
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Nonprofits
Tax rules and yearly filing for charitable and other tax-exempt organizations.
A nonprofit organization that is tax-exempt under Section 501(c)(3), such as a charity, school, or social service organization, is generally not taxed on income that supports its mission, and donors can generally deduct gifts to it. In return, it must follow strict rules and report to the IRS every year. Unlike a synagogue, most nonprofits must file an annual return.
🏛️Exempt Nonprofit501(c)(3) organization
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📄Annual ReturnForm 990 every year
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🌐Public RecordOpen to donors and the public
What 501(c)(3) status means
Exempt status is a privilege, and it depends on how the organization operates. The organization must be run for its charitable, educational, or other exempt purpose, and these rules apply continuously.
No private inurement
Income and assets cannot benefit insiders such as officers, directors, or their relatives, beyond reasonable pay and fair-value transactions.
Reasonable compensation
Pay to officers, directors, and key employees must be reasonable. Excess benefits can trigger penalties for the insider and for the managers who approved them.
No political campaigning
A 501(c)(3) cannot support or oppose candidates for public office. Nonpartisan voter education is generally allowed.
Limited lobbying
Lobbying is allowed in limited amounts, but it cannot be a substantial part of the organization’s activities.
Unrelated business income
A tax-exempt organization is exempt on income that supports its mission, but not on every dollar it earns. Income from a regular business activity that has nothing to do with the mission can be taxed, in a tax known as the unrelated business income tax, or UBIT. The idea is fairness: an exempt organization should not get a tax advantage over a for-profit business doing the same thing.
The three tests
Income is generally unrelated business income when all three of these are true.
1. A trade or business
The activity is carried on to make a profit by selling goods or providing services.
2. Regularly carried on
It happens often and continuously, like a for-profit business, not just once in a while.
3. Not substantially related
The activity itself does not contribute importantly to the exempt purpose.
Using the money for the mission does not make an activity related. An activity is judged by what it is, not by what the profit pays for. A business that funds the organization’s programs can still be unrelated.
Common examples
Advertising
Selling ads in a journal, program, or website is generally taxable. Simply recognizing a sponsor, without promoting its products, generally is not.
Public-facing businesses
Operating a parking lot, a gift shop that sells unrelated goods, or a catering business open to the public.
Rentals with services
Rent from real estate is generally excluded, but rent that includes substantial services, or the rental of equipment, may be taxable.
Mortgaged property
Income from property bought with borrowed money, such as rent on a mortgaged building, can be partly taxable. This is called debt-financed income.
What is generally not taxed
- Volunteer-run activities, where substantially all of the work is done by unpaid volunteers.
- Sales of donated goods, such as a thrift store that sells items it received as gifts.
- Activities for the convenience of members, students, or patients, such as a cafeteria.
- Occasional fundraisers, which are not regularly carried on.
- Passive income: interest, dividends, royalties, gains on selling property, and most rent from real estate that is not mortgaged.
Reporting and paying
Form 990-T
Required when the organization has $1,000 or more of gross income from unrelated business activities, even if there is no tax due.
Due date
The 15th day of the fifth month after the year ends, which is May 15 for a calendar-year organization. An extension is available.
Estimated tax
If the organization expects to owe $500 or more of tax, it generally must make estimated payments during the year.
- Each activity stands alone. Since 2018, income and losses are generally figured separately for each unrelated activity, so a loss from one activity generally cannot offset profit from another.
- A small deduction applies. A $1,000 specific deduction is generally available against unrelated business income.
- The rate: an organization that is a corporation pays tax at the corporate rate on its unrelated business taxable income.
- New York has its own return. New York State requires Form CT-13 for unrelated business income, and unlike the federal rule it has no $1,000 minimum. It starts from the federal figures and is generally due 4½ months after year-end.
Unrelated business income does not by itself cost an organization its exempt status. But if unrelated activities grow to be a substantial part of what the organization does, they can put the status at risk. Contact us below if your organization has income outside its core mission.
Yearly filing
Most nonprofits must file an annual information return with the IRS, even if they owe no tax. The form depends on the organization’s size.
Form 990-N
The e-postcard. For organizations with gross receipts normally $50,000 or less.
Form 990-EZ
A shorter return, for gross receipts under $200,000 and total assets under $500,000.
Form 990
The full return, for larger organizations, with gross receipts of $200,000 or more or assets of $500,000 or more.
Private foundations file Form 990-PF regardless of size.
Due date
The 15th day of the fifth month after the year ends, which is May 15 for a calendar-year organization.
Extension
Form 990 and 990-EZ filers can request an automatic six-month extension with Form 8868. The 990-N cannot be extended.
Late filing
Daily penalties apply to late returns, which grow with the size of the organization.
Three missed years can end exempt status. An organization that does not file a required return for three consecutive years automatically loses its tax-exempt status, regardless of size. Even a very small organization must file.
Annual returns are public. Anyone, including donors, can see an organization’s Form 990, so accuracy and consistency matter.
Congregation or nonprofit?
NonprofitFiles Form 990, 990-EZ, or 990-N every year, and the return is public.
SynagogueGenerally not required to file Form 990. See
Congregation.
Other filings and obligations
- Payroll: a nonprofit with employees withholds and files payroll taxes like any other employer, although 501(c)(3) organizations are generally exempt from federal unemployment tax. See Payroll.
- Contractors: payments to independent contractors may require Forms 1099. See 1099 Contractors.
- Donor receipts: a donor needs a written acknowledgment for any single gift of $250 or more, and the organization must give a written disclosure when a donor pays more than $75 and receives goods or services in return.
- Good governance: a board that meets regularly, written minutes, a conflict of interest policy, and separate bank accounts all protect the organization.
New York
Most charitable organizations operating in New York must register with the New York Attorney General’s Charities Bureau and file an annual report, generally alongside the federal return. Requirements grow as an organization’s revenue grows. Federal exempt status does not automatically cover New York sales tax or property tax. New York has its own rules for each, which are separate from federal status. See Sales Tax.
Missing a filing can have serious consequences for a nonprofit. Contact us below to make sure your organization stays in good standing.
