Return Of Organization Exempt From Income Tax: What You Need To Know

Let’s dive into this section of the Return of Organization Exempt From Income Tax form and make it easier to understand.

Net income or (loss) from special events (subtract line 9b from line 9a)

This line asks you to calculate the net income or loss from special events your organization held during the tax year. Here’s how it works:

Line 9a: This is where you report the gross income from your special events. This includes all the money your organization received from ticket sales, donations, sponsorships, and any other revenue related to the events.
Line 9b: Here, you report the expenses related to those special events. This includes things like costs for renting a venue, catering, entertainment, marketing, and any other expenses directly related to the events.

To calculate your net income or loss from special events, subtract line 9b (expenses) from line 9a (gross income).

For example, if your organization held a fundraising gala and earned $10,000 in ticket sales and donations (line 9a), but spent $5,000 on the event (line 9b), your net income from the gala would be $5,000. If your expenses were higher than your income, you’d have a net loss from the event.

Why is this important? Understanding your net income or loss from special events helps you see the overall financial impact of these events on your organization. If you consistently have a net loss from certain events, it might be a sign that you need to adjust your pricing, find ways to reduce expenses, or reconsider holding the event in the future.

Keep in mind that this section is only focused on special events. It doesn’t include income or expenses from your organization’s regular operations.