Private Foundations

Tax Preparation for Private Foundations

Duryea Ingraham Loff CPAs serves discerning tax, accounting and investor clients in Hawaii and other U.S. and global locations. Our firm is built upon the highest standards of service quality and professionalism. We are unremitting in our pursuit of excellence.

Consulting and Planning

Description of what private foundations are; description of potential tax issues; we have deep expertise; we are Hawaii’s premier provider of preparation of tax returns for private foundations.

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Tax Preparation

Every year, private foundations must still file a return (Form 990-PF) with the IRS. This form is filed on the 15th day of the fifth month after the foundation’s account period ends. If a foundation has no accounting period, this date is May 15th. When this form is not filed, foundations are subject to a penalty of $20 each day their return is late. Larger organizations may be fined $100 a day. This penalty may go up to the lesser of $10,000 or five percent of the organization’s gross receipts. For larger organizations, it’s the lesser of $50,000 or five percent of gross receipts.

Private foundations are also subject to federal excise taxes on their net investment income. For most domestic private foundations that are tax-exempt, this tax is only 2% of the net investment income. However, it can be reduced to 1% of a foundation’s net investment income in certain cases. Because of this, even tax-exempt foundations still pay some taxes to the federal government every year.

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