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.
It’s not uncommon for adult children to help support their aging parents. If you’re in this position, you might qualify for the adult-dependent exemption. It allows eligible taxpayers to deduct up to $4,050 for each adult dependent claimed on their 2016 tax return.
If 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.