When does your nonprofit owe UBIT on investment income?

When does your nonprofit owe UBIT on investment income?In recent years, the IRS has increased its scrutiny of not-for-profits’ unrelated business income (UBI). Dividends, interest, rents, annuities and other investment income generally are excluded when calculating unrelated business income tax (UBIT). However, there are two exceptions where such income is taxable.

The IRS can reclassify S corporation distributions as wages

08_29_16-500094095_SBTB_560x292.jpgIf you run your business as an S corporation, you’re probably both a shareholder and an employee. As such, the corporation pays you a salary that reflects the work you do for the business — and you (and your company) must remit payroll tax on some or all of your wages.