What You Need To Know About IRS Form 990
While nonprofits that have 501c3 tax exemption status don’t pay federal taxes, they still have to file Form 990 for nonprofit organizations. Filing this form ensures that nonprofits conduct their charity business in a way that is compliant with their public, nonprofit responsibilities. This form gives the IRS an overview of your activities throughout the last fiscal year. It also helps donors understand how your nonprofit organization is being operated and managed.
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There are different versions of IRS Form 990: 990-N, 990-EZ, 990 long-form, 990-PF for private foundations, and Form 990-T for organizations with unrelated business income. Our tax compliance team will help you determine which Form 990 is appropriate for your nonprofit’s filing. These forms often require more information than a corporate tax return. The IRS ensures strict scrutiny in areas of governance, structure, procedures, programs, and compliance.
Feel free to contact our professional team at CharityNet USA to discuss your Form 990N filing for this tax year. If you have any inquiries about our Form 990 services, we’re here to assist you.
We also offer to maintain your organization’s accounting records on an ongoing basis so we can get the details needed to complete the annual IRS Form 990. Whether you’re a private foundation or a charity-focused business with taxable income, we’re here to help you prepare your documents professionally.
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Frequently asked Questions
A. Form 990 is an annual reporting return that certain federally tax-exempt organizations must file with the IRS. It provides information on the filing organization’s mission, programs, and finances.
A. Most federally tax-exempt organizations, with the exception of churches (unless there is unrelated business income) and state institutions. See the IRS guidelines.
A. IRS Publication 557 – Tax-Exempt Status for Your Organization, establishes an 85% of gross income requirement. This requirement is that the exempt organization must “. . . receive 85% or more of their gross income from their members for the sole purpose of meeting losses and expenses.” This 85% rule applies to ALL exempt organizations, not just 501(c)(4) social welfare organizations.
A. Yes. An exempt organization must establish an accounting system capable of tracking source of income and source of payment of that income. The system should also be able to identify those expenses directly connected to the production of income by source.
A. The tax rates are the same as those that apply to regular corporations on Form 1120. However, an exempt association files Form 990-T to report its unrelated business taxable income.
Most associations, simply by the nature of their operations, will not pay any significant income tax. This is because there is usually no net taxable income resulting from the unrelated business activities after allocation of expenses. Learm more about UBIT.
A. There is no one date on which all Forms 990 must be submitted to the IRS. Instead, a nonprofit’s filing date is determined by the end of its fiscal year (the 12-month period for which the organization plans the use of its funds). Each filing organization is required to file by the 15th day of the 5th month after its fiscal year ends. If your fiscal year ends on December 31, these are the filing dates: