Almost every Colorado HOA and condo association has to file a federal income tax return every year, even if it did not make a profit. Most file Form 1120-H. Powder Accounting Group prepares these returns for Colorado associations at a flat price, and keeps the books that make the return easy.
An association can elect to file Form 1120-H, which lets it leave member dues and assessments out of taxable income. If it does not make the election, it files the regular corporate Form 1120. The IRS tells associations to compare the tax both ways and file the one that costs less. For most associations, 1120-H wins because only non-member income, like interest, is taxed.
The association has to pass two tests every year (IRS instructions):
The election is made separately each year by filing the return on time, including extensions, and once filed it cannot be revoked for that year.
Tax returns are included as an add-on for our monthly accounting clients, so the numbers are already reconciled when tax season comes.
Yes. Associations generally file every year, and filing Form 1120-H on time is how the association makes the election for that year.
The 15th day of the 4th month after year end. April 15 for a calendar-year association. Form 7004 extends the filing date six months.
A flat 30% on taxable income, or 32% for timeshare associations. Member dues and assessments are not taxed.
Yes. Interest is not dues or assessments from owners, so it counts as taxable income on Form 1120-H.
$400 for up to 50 units, $500 for 51 to 150, and $600 for 151 and up. 1099s are $15 each.
We are a small Colorado firm based in Frisco, not a national chain. When you call, you reach a real person who knows your books. Call (970) 633-3997 or schedule a call with our team. You can also see what HOA accounting costs.
More: Colorado HOA accounting services · self-managed boards · HOA tax returns
