As a non-profit organization, you may not have to file and pay any federal taxes,
you will have to file an information form with the IRS each year through form 990n. This form
allows the IRS to know about your organization and the
activities that take place each year. It is important that you learn and
understand all you can about these forms.
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What is a Form 990?
This is an information
based tax form that tax-exempt organizations are required to file each and every
year. When this form is filed, it is then presented to the IRS as a form of an
overview of the organization’s activities; it is an in depth financial report
that allows the IRS to know that your organization is still within its rights
to be considered tax-exempt.
Who has to File a Form 990?
- Typically those that are larger nonprofit organizations or those that have gross receipts of $50,000 or more are require to file a Form 990 or 990-EZ
- Small nonprofit organizations that have gross receipts of $50,000 or less are required to file a form 990 electronically that are known as a Form 990-N so that they can maintain their tax-exempt status.
- Nonprofit Organizations who are tax-exempt according to Sections 501(c), 527, or 4947(a)(1) of the U.S. Taxation Code, and who are not included in the exemptions that are listed below.
What Nonprofit Organizations are exempted from filing a Form 990?
- Churches
- Subsidiaries of Other Nonprofit Organizations
- Nonprofits that not in the System as of Yet
It should be noted that if you are an incorporated nonprofit
organization in the state in which you reside but you do not plan on applying
to the IRS for an exemption status from the federal income tax you will not
have to file a Form 990n.
It must also be noted that if your organization makes claims to be tax-exempt and it has intentions to file with the IRS by the end of the 27th month you are in business for you are required to file a Form 990 or 990-EZ or 990-N whichever is deemed appropriate during the 27 month period you are in business; this is of course to be under the understanding that even though an application has not been submitted to the IRS nor has a determination been received.
It must also be noted that if your organization makes claims to be tax-exempt and it has intentions to file with the IRS by the end of the 27th month you are in business for you are required to file a Form 990 or 990-EZ or 990-N whichever is deemed appropriate during the 27 month period you are in business; this is of course to be under the understanding that even though an application has not been submitted to the IRS nor has a determination been received.
- Religious School
- State institutions
You should know that some state institutions are exempted
from this because they provide the essential services that people seek.
- Government Corporations
There is a lot to understand about and remember of the Form
990. It would be in your best interest to seek professional guidance from a CPA
or another tax advisor that can help you to understand what you should know and
how to maintain your tax-exempt status. With his or her help, you can ensure
that you will always be up to date on the important tasks you need to perform
for your nonprofit.
Seems to me many home business owners do not know anything about filling in tax forms. Still this is business like any other and taxes should be paid, we owe it to our country.
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