Financial Presentation Outline

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Officers Salaries

  • Should be authorized in minutes and included in by-laws
  • Should be reasonable for time worked
  • Subject to Federal, state and local taxes

Fringe Benefits (Health, Life, AD&D)

  • Should be authorized in minutes
  • Health and AD&D are non-taxable FB
  • Life is non-taxable under group policy
  • Group Term Life, > $50,000 taxable

Other Fringe Benefits – Non-taxable – Employers Guide IRS

  • Parking – reimburse up to $240/Mo. (proximity)
  • Public Transportation – reimburse up to $240/Mo for parking and transit.

Other Fringe Benefits – Taxable

  • Automobile (leased or owned by union) – User must track business mileage
  • Value of non-business use subject to income and FICA tax
  • Definition of business use, any other use is taxable
  • IRS value tables include insurance, maintenance and repairs
  • Add personal gasoline usage
  • Withholding required on personal use value

Allowances (not accounted for) – Taxable

  • Should be authorized in minutes
  • Withholding required when paid

Per Diem (not accounted for) – Taxable

Lost Time Payments

  • Represents employee salaries
  • Subject to withholding
  • Reported as wages (W-2, Form 941, etc.)

Consultants vs. Employees

  • IRS definition applies (definition)
  • What, When, Where, How = Employee
  • Consultants get Form 1099
  • Employees get Form W-2

Payroll Reporting Requirements

1. Federal

2. State

  • State unemployment
  • State withholdings

3. Local – as required

Federal Deposit Requirements

See IRS Publication Circular E (IRS Publication 15) for all tax deposit requirements
Total Taxes = Federal W/H, SS W/H, Medicare W/H, SS Match, Medicare Match

Electronic Filing and Payment of Taxes (From Circular E)

Now, more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. Whether you rely on a tax professional or handle your own taxes, the IRS offers you convenient programs to make filing and payment easier.

Spend less time and worry on taxes and more time running your business. Use efile and the Electronic Federal Tax Payment System (EFTPS) to your benefit.

For efile, visit for additional information.

For EFTPS, visit or call EFTPS Customer Service at 1-800-555-4477.

For electronic filing of Forms W-2, visit

If you are filing your tax return or paying your federal taxes electronically, a valid EIN is required at the time the return is filed. If a valid EIN is not provided, the return or payment will not be processed. This may result in penalties and delays in processing your return or payment.

Electronic funds withdrawal (EFW). If you file Form 940, Form 941, or Form 944 electronically, you can e-file and e-pay (electronic funds withdrawal) the balance due in a single step using tax preparation software or through a tax professional. However, do not use EFW to make federal tax deposits. For more information on paying your taxes using EFW, visit the IRS website at A fee may be charged to file electronically.

Credit or debit card payments. For information on paying your taxes with a credit or debit card, visit the IRS website at However, do not use credit or debit cards to make federal tax deposits.

Deposit Schedules (Get deposit coupons from bank)

1. Monthly

Total taxes in Lookback period < $50,000
Lookback period. If you are a Form 941 filer, your deposit schedule for a calendar year is determined from the total taxes reported on Forms 941, line 10, in a 4-quarter lookback period. The lookback period begins July 1 and ends June 30 as shown next in Table 1. If you reported $50,000 or less of taxes for the lookback period, you are a monthly schedule depositor; if you reported more than $50,000, you are a semiweekly schedule depositor.

Deposit by 15th day of next month.

2. Semiweekly

  • Total taxes in Lookback period > $50,000
  • Deposit taxes w/h on W,T,F by next W
  • Deposit taxes w/h on S,S,M,T by next F

Lookback Period – July 1 – June 30

New Employers – Monthly depositor for 1st calendar year
$100,000 or more – next day
<$2,500 at end of quarter, pay with 941 or deposit by 941 due date

How to Deposit

  • FTD Coupons – take to authorized financial institution – mark coupon carefully (Tax type and tax period)
  • Electronic Deposits – required if deposits > $200,000
  • See Circular E (IRS Publication 15) for electronic filing options and requirements

Union Credit Cards

  • Concerns
  • Accountability and abuse
  • LM reporting considerations
  • Substantiation and documentation
  • Invoice or receipt
  • Meals and entertainment
    • – Names
    • – Location and date
    • – Business purpose
  • Authorized by Board
  • Limited distribution
  • Mandatory accounting for use
  • No personal use – considered as a loan to an officer and reportable as such



  • Operating/Checking Account
  • Used for all union receipts and disbursements
  • Essential that two “Live” signatures be required
  • Bank statement and reconciliation
  • Received/prepared by non check signer, or
  • Received/reviewed by non check signer
  • Do not presign checks
  • Do not issue checks to “CASH”
  • Safeguard all undeposited receipts and unused check stock
  • Have bank use month end statement cut-off
  • Use bank that returns cancelled checks
  • All disbursements should have adequate documentation and original support

Petty Cash

  • Used for minor expenditures
  • Receipt required for reimbursement
  • Should be kept at minimal balance
  • Keep in a safe place

Money Market and Savings Accounts

  • Used to transfer excess funds from checking account
  • Set up account for transfers to/from checking only
  • Avoid writing checks on account



Local union charter

  • Local union by-laws and constitutions and amendments
  • Minute books – all meetings
  • Executive Board
  • Membership
  • Contracts (employer and other)
  • Membership records
  • Election records
  • Annual audits, semi-annual financial reports
  • Deeds, property records
  • Bonding – arranged by the UWUA National Union and billed to each local – Computation Worksheet – 10% of Assets plus 10% of Receipts

Record Retention

  • DOL – 5 years from date of LM filing
  • IRS – maximum 6 years from date of filing

Records to be kept

  • All accounting records and reports
  • Personnel records on terminated employees
  • Correspondence



  • Taken for every meeting
  • Date, location, time started and finished
  • Attendees
  • Official
  • Others
  • Member sign in sheet
  • Approve minutes of previous meeting (date)
  • Note items submitted for action
  • Indicate action taken



  • Should be done annually, 3 months in advance
  • Should be approved by Executive Board/members
  • Member dues should be based on
  • Next year’s per capita dues rate
  • Current year’s membership numbers, or better numbers if known
  • Expenses should be based on
  • Paying all bills currently
  • Current year expenses adjusted for
  • Increases in salaries, benefits and payroll taxes
  • Known activities that aren’t recurring (conferences, rallies, etc.)


  • Should demonstrate that expenses are being incurred “for the membership”
  • Do you have the authority to spend for these expenses
  • Do you need member approval
  • Cannot be solely for benefit of officers or selected members/groups
  • Must be reimbursed within a reasonable period of time or become taxable
  • Cannot be illegal

Per Capita owed to the National Union

  • Due by the Fifteenth of the following month for the previous month
  • Calculated by the number of members and 4 or 5 weeks in month. Example
  • In Accordance with the National Constitution
  • January 2018 Per Capita $23.39 per member / per month
  • January 2015 Per Capita $20.33 per member / per month
  • January 2014 Per Capita $19.43 per member / per month
  • January 2013 Per Capita $18.55 per member / per month
  • January 2012 Per Capita $17.75 per member / per month
  • January 2011 Per Capita $16.95 per member / per month
  • January 2010 Per Capita $16.95 per member / per month
  • January 2009 Per Capita $15.91 per member / per month
  • January 2008 Per Capita $14.91 per member / per month
  • January 2007 Per Capita $13.97 per member / per month
  • January 2006 Per Capita $13.05 per member / per month
  • January 2005 Per Capita $12.17 per member / per month
  • January 2004 Per Capita $11.335 (11.33-1/2 cents) per member / per month

UWUA Per Capita 2018

UWUA Per Capita 2017

UWUA Per Capita 2015

UWUA Per Capita 2014

UWUA Per Capita 2013

UWUA Per Capita 2012

UWUA Per Capita 2011

UWUA Per Capita 2010

UWUA Per Capita 2009

UWUA Per Capita 2008

UWUA Per Capita 2007

UWUA Per Capita 2006

UWUA Per Capita 2005

UWUA Per Capita 2004

UWUA Per Capita Policy

Financial Requirements under the UWUA Constitution



  • Income Taxes
  • Locals covered by IRS group exemption
  • Locals subject to tax on unrelated business income activities, such as Advertising
  • Rentals on debt financed property
  • Logo merchandise – if a profit is made
  • Activities that aren’t UBIT (Unrelated Business Income Tax) (Form 990-T)
  • Investment income
  • Rentals on leased or non-debt financed property
  • State/Local Sales and Use Taxes
  • Generally (c) 5 organizations are not exempt
  • Avoidance of state sales tax results in imposition of use tax, same rate
  • Purchasing supplies, equipment, etc. out-of-state for use in-state subject to use tax, if no sales tax paid
  • State/Local Other Taxes
  • Property
  • Other



Be sure that your local has filed a 990 report according to your annual revenue levels.
990-N less than $50,000 in annual revenue 2011 and after (less than $25,000 in revenue for tax years ending after December 31, 2007 to December 31, 2010), there was no 990-N required prior to 2007.
990 EZ Less than $200,000 in annual revenue, 990 – EZ Instructions
990 Form – More than $200,000 in annual revenue, 990 Instructions

  • Complete Part IV/V List of Officers, Directors carefully, may not be same as the LM report
  • File on time – 5-1/2 months after year end. Up to two 3 month extensions can be requested
  • Late filing penalty without filing for extensions – $20/day

Many small tax-exempt organizations now must file new Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or 990-EZ, if they choose not to file Form 990 or Form 990-EZ. See the IRS website at and click on the Form 990-N (e-Postcard) tab for more information. Failure to file can result in loss of their tax exempt status.

Form LM 1, 2, 3, 4

Public Sector Municipal Locals do not file LM reports but may need to file state reports


Federal PAC Fund (SSF) (Federal Election Campaign Act)

  • Contributions to fund must be voluntary
  • Contributions can only be solicited from members
  • “Fundraisers” subject to 1/3 rule
  • General fund purchases raffle prize for $300 (cannot exceed 1/3 sales)
  • Raffle ticket sales = $600 – Massachusetts does not allow raffles for State PAC committees.
  • – 1/3 of ticket sales = $200
  • – PAC Fund owes General Fund $100
  • Registration of 50/50 raffles – Register with State Lottery Commission or appropriate state department. Massachusetts does not allow raffles for state PAC committees.
  • Affiliation Rules – National COPE and Local COPE are affiliated for contribution (both received and disbursed) limitations
  • FEC (Federal Elections Commission) filings required
  • Interest income subject to tax (Form 1120-POL filed by SSF (Separate Segregated Fund))
  • General Fund – Dos and Don’ts
  • Can pay PAC administrative expenses
  • Illegal to make contributions to Federal candidates – except independent expenditures under Citizens United case decided by the supreme court. It is best not to use independent expenditures, if they aren’t done the right way they can be taxable and require additional reporting.
  • Can pay for partisan communications to members only to support particular candidate (newsletter, phone banks)
  • Can pay for costs of fund raisers
    • *Can make contributions to non-federal candidates, but this can result in a 35% tax (Form 1120-POL filed by labor organization)
  • May be able to transfer allocated dues money to a state/local PAC to make state/local contributions -See State Campaign Finance Rules
  • State/Local PAC Fund (For State and Local Candidates)
  • State PAC funds (See State Campaign Finance Rules) may need to become another SSF (Separate Segregated Fund), do not commingle PAC funds with General Fund
  • PAC funds require a separate bank account. Some State PAC funds may require an additional segregated bank account (like Massachusetts).
  • Requires registration and filings with state/local offices based on State’s plan
  • Campaign Finance Act ~ Campaign Finance Law Resources
  • Know your state and local CFA rules – State Campaign Finance Rules


What are Employees?

Employee status under common law: – – Anyone who performs services for you is your employee if you can control what will be done and how it will be done. This is so even when you give the employee freedom of action. What matters is that This chapter discusses expenses you can deduct for local business transportation. This includes the cost of transportation by air, rail, bus, taxi, etc., and the cost of driving and maintaining your car.

Local transportation expenses include the ordinary and necessary costs of all of the following (non-taxable)

  • Getting from one workplace to another in the course of your business or profession when you are traveling within the city or general area that is your tax home. Tax home is defined in chapter 1.
  • Visiting clients or customers.
  • Going to a business meeting away from your regular workplace.
  • Getting from your home to a temporary workplace when you have one or more regular places of work. These temporary workplaces can be either within the area of your tax home or outside that area. You have the right to control the details of how the services are performed.

Commuting expenses. You cannot deduct the costs of taking a bus, trolley, subway, or taxi, or driving a car between your home and your main or regular place of work. These costs are personal commuting expenses. You cannot deduct commuting expenses no matter how far your home is from your regular place of work. You cannot deduct commuting expenses even if you work during the commuting trip.

I-9 Employment Eligibility Verification – -You must verify* that each new employee is legally eligible to work in the United States. This will include completing the Immigration and Naturalization Service(INS) Form I-9, Employment Eligibility Verification. You can get the form from INS offices. Contact the INS at 1-800-755-0777 for further information.

*You must verify that the employee is either a U.S. citizen or an alien who can legally work in the United States and then complete the employer part of the form. Keep the completed form for your records and reverify the employee’s work authorization if and when necessary as indicated on the form. You must make the form available for review upon notice from an authorized U.S. Government official. Do not submit it to the IRS, INS, or to any other local, state, or federal government entity.

Standard meal allowance. The standard meal allowance (also referred to as the limit on meals and incidental expenses (M&IE rate)) for most small localities in the United States is $35 after October 1, 2002. However, the standard meal allowance is higher for most major cities and many other localities in the continental United States. See Publication 1542, Per Diem Rates. (Check revision dates on web links) Effective for 2012 and later, the IRS will no longer be updating Publication 1542. Instead, current per diem rates may be found on the U.S. General Services Administration (GSA) website This GSA site will give you a chart for low medium and high Meal and Incidental Expense but they don’t seem to allow you a simple way to look up the rate by city. You may have to call the IRS to complain about this till they provide the information with a city and zip code search

Other information regarding per diem rates, such as substantiation methods and transition rules, may be found in Publication 463, Travel, Entertainment, Gift, and Car Expenses.

Look for Social Security, Medicare percentages and tax deposit requirements in IRS Publication 15 (Circular E)

UBIT (Unrelated Business Income Tax): Even though an organization is recognized as tax exempt, it still may be liable for tax on its unrelated business income. Unrelated business income is income from a trade or business, regularly carried on, that is not substantially related to the performance by the organization of its exempt purpose or function except that the organization needs the profits derived from this activity. An exempt organization that has $1,000 or more gross income from an unrelated business must file Form 990-T, Exempt Organization Business Income Tax Return. (Internet link for more detailed explanation)

Expenses reimbursed within a reasonable period of time, or taxable: A reasonable period of time depends on the facts and circumstances. Generally, it is considered reasonable if your employees receive the advance within 30 days of the time they incur the expense, adequately account for the expenses within 60 days after the expenses were paid or incurred, and they return any amounts in excess of expenses within 120 days after the expense was paid or incurred. Also, it is considered reasonable if you give your employees a periodic statement (at least quarterly) that asks them to either return or adequately account for outstanding amounts and they do so within 120 days.

Expenses become taxable if not reimbursed within a reasonable period of time: If the expenses covered by this arrangement are not substantiated or amounts in excess of expenses are not returned within a reasonable period of time, the amount is treated as paid under a nonaccountable plan (definition of an accountable plan). This amount is subject to income tax withholding and payment of social security, Medicare, and FUTA taxes for the first payroll period following the end of the reasonable period.

You must file IRS form 990-EZ or Form 990 (most difficult) if your annual gross receipts are normally more than $50,000. NOTE: Penalties can be assessed for noncompliance with payroll tax requirements for form 990 and Form 990-EZ ~ Form 990 tax filing info for exempt organizations is due by the 15th day of the 5th month following the tax year end.

990-N $50,000 Gross Receipts Test
To determine whether an organization’s gross receipts are normally $50,000 or less, apply the following test. An organization’s gross receipts are considered normally to be $50,000 or less if the organization is:

  • Up to a year old and has received, or donors have pledged to give, $75,000 or less during its first tax year;
  • Between 1 and 3 years old and averaged $60,000 or less in gross receipts during each of its first 2 tax years; or
  • Three years old or more and averaged $50,000 or less in gross receipts for the immediately preceding 3 tax years (including the year for which the return would be filed).

Petty Cash Fund: All cash should be promptly deposited in a checking account, Also all withdrawals are usually made by issuing checks. The Petty Cash Fund is sometimes used for small amounts which must be paid out, perhaps for postage stamp, postage due on a letter or package or other expenses for which drawing a check would not be practical.

  • Payment to establish and/or to maintain the fund should be made payable to Petty Cash from the Unions checking account with two signature authorization.
  • One person should be held responsible for the petty cash fund
  • A record of each payment from the account should be kept with a petty cash voucher showing the person to whom it was paid, the reason, the date, the amount, and if possible the signature of the person to whom it was given
  • Replenish the fund with a check payable to petty cash, the amount should be equal to the disbursements (vouchers and disbursements + cash balance must total the original amount of the fund)
  • Sample Petty Cash Voucher

Sample Petty Cash Voucher

Petty Cash Voucher No __ Utility Workers Union of America, Local No. __ Date ______ , 20____
Pay to ___________________________  Amount $___________For (explanation of expense)________ ____________________________This is to certify that the expenses incurred were necessary in the
Service of the Utility Workers Union of America, and that the
information given is true and correct. Signed by recipient of funds__________________ _____________________________
Payment Received By Authorized By
Attach Receipts

Sample Check Payable to Petty Cash

November 17, 2013
Pay to the
Order of _______Petty Cash Payable to John Smith, Custodian___-_________________________________ $___33.95
Thirty Three and 95/100___________________________________________ Dollars
CHARTER UNION BANK ______Jane Doe_______
I : 0860 : 0830 : I : 1943 : 271 : I ______John Smith______


4 Week
Local Paid
4 weeks in month
Number of members each week National per capita per member/per month Divide Per Capita by 4 weeks Per Capita owed
4 pay periods in month Week 1 100 $20.33 $5.08 $508.00
4 pay periods in month Week 2 110 $20.33 $5.08 $508.00
4 pay periods in month Week 3 110 $20.33 $5.08 $508.00
4 pay periods in month Week 4 120 $20.33 $5.08 $609.60
Total per capita owed to National Union for month > > > > > > > > > > > $2,235.20
** Use the same type of calculation for 5 week months dividing the monthly per capita by 5 weeks instead of 4 shown above.~ Monthly Per Capita Form

PER CAPITA CALCULATIONS YEAR 2015 – 5 day period example

5 Week
Local Paid
4 weeks in month
Number of members each week National per capita per member/per month Divide Per Capita by 5 weeks Per Capita owed
5 pay periods in month Week 1 100 $20.33 $4.07 $407.00
5 pay periods in month Week 2 110 $20.33 $4.07 $447.70
5 pay periods in month Week 3 110 $20.33 $4.07 $447.70
5 pay periods in month Week 4 120 $20.33 $4.07 $488.40
5 pay periods in month Week 5 110 $20.33 $4.07 $447.70
Total per capita owed to National Union for month > > > > > > > > > > > > > > $2,238.50
**Monthly Per Capita Form

FAQ – Frequently Asked Questions

Q: Can phone service be reimbursed as an expense?

A: To be an accountable plan, your employer’s reimbursement or allowance arrangement must include all three of the following rules.

1. Your expenses must have a business connection — that is, you must have paid or incurred deductible expenses while performing services as an employee of your employer.

2. You must adequately account to your employer for these expenses within a reasonable period of time.

3. You must return any excess reimbursement or allowance within a reasonable period of time. “Adequate accounting” and “returning excess reimbursements” are discussed later.

An excess reimbursement or allowance is any amount you are paid that is more than the business-related expenses that you adequately accounted for to your employer.

The definition of reasonable period of time depends on the facts and circumstances of your situation. However, regardless of the facts and circumstances of your situation, actions that take place within the times specified in the following list will be treated as taking place within a reasonable period of time.

You receive an advance within 30 days of the time you have an expense. You adequately account for your expenses within 60 days after they were paid or incurred. You return any excess reimbursement within 120 days after the expense was paid or incurred. You are given a periodic statement (at least quarterly) that asks you to either return or adequately account for outstanding advances and you comply within 120 days of the statement.