Section 501(c) of the United States Internal Revenue Code states that there are 29 types of nonprofits that can be exempt from federal income taxes. Section 503 sets out the requirements for meeting the exemptions.
A 501c3 organization is a tax-exempt nonprofit and one of the most common types of tax-exempt organizations. Becoming a 501c3 is an essential step to starting a nonprofit organization and seeking grants or tax exemptions. Today, we’ll discuss some of the key benefits of achieving your 501c3 status.
Eligibility for Grants
To apply for a grant on a federal, state, or local level, you are required to represent a 501c3 organization. By having 501c3 status, you will be given a certificate of proof. This certificate allows you to pursue fundraising opportunities that other organizations cannot.
Exemption From Federal Income Tax
One of the biggest reasons why you need 501c3 status is that you receive special tax exemptions. This means that your organization is exempt from federal, state, and property taxes. You may even be exempt from payroll taxes if you have employees. Having this advantage saves your organization money, which is a plus to any nonprofit.
Additional Benefits of 501c3 Status
As a 501c3 organization, you receive extra perks. These usually include special mailing services, free or discounted media outlets or services, and much more. Many media outlets often give free rates for nonprofit organizations. When planning to use these services, make sure to tell these organizations in advance that you are a 501c3.
Understanding that many nonprofits are overwhelmed by this process, CharityNet USA has created services that are aimed at making the 501c3 process as simple as possible. CharityNet USA’s mission is to provide products, services, and solutions to nonprofits while helping them start and grow their organizations.
As the nation’s leading nonprofit resource center, CharityNet USA provides a “one-stop shop” for business products, services, and solutions. Our specialty is helping organizations or startups with all administrative services, including incorporation, accounting, web development, and more. Our experts will be with you throughout the journey to ensure that your dream becomes a reality.
Need to know more about the benefits of 501c3 status and nonprofit services?
For more information about CharityNet and our innovative nonprofit services, please visit our 501c3 Tax Exempt Webpage or call 877-857-9002.