What Nonprofits Need To Know About Their Annual Tax Returns

Nonprofits & Their Federal Income Taxes

The aim of most businesses is to earn maximum profits, but there are certain organizations which are set up to provide benefits and services for reasons other than profit. Now, these so-called nonprofit organizations will receive special benefits from the IRS which will assist them to be viable and even fulfill their mission.

Many nonprofit organizations can have higher chance of getting the tax exempt status and once the IRS declares an organization as tax exempt, it will no longer need to make payment for federal income taxes.

TaxBandits Ad Banner

Filing Responsibilities For Nonprofit Organizations

  • Nonprofit Organizations which normally have more than or equal to $200,000 in gross receipts or total assets more than or equal to $500,000 need to file Form 990 (Long Form).
  • Nonprofit Organizations which normally have gross receipts less than $200,000 and $500,000 in total assets need to file Form 990-EZ (Short Form).
  • Most small nonprofit organizations whose annual gross receipts are less than $50,000 need to file Form 990-N.

Due Date For Filing Form 990

The due date to e-file 990 form is on the 15th day of the 5th month after the organization’s tax year ends. So, it means that if your organization is following the calendar year, then the due date to file 990 will be on May 15th of each year.

Keep in mind that you need to file your nonprofit tax returns on time. If you don’t file 990 online for three consecutive years, your tax exempt status will be revoked automatically by the IRS. In the recent years, various nonprofits have lost their tax exempt status as they didn’t file the required 990 forms.

Methods To Submit Form 990

There are two methods to submit Form 990 with the IRS -

  • E-filing
  • Paper Filing

To E-file 990, you can use the services of professional and experienced accounting agencies or authorized e-file providers like irs990.org. You can include the Schedules for FREE with 990 Forms, correct the previously filed returns with the Amended Return feature offered by irs990.org. By E-filing, you can know the status of your submitted forms.

Paper filing is where you download the Form 990 from the IRS website, fill in the necessary details and then send it to the IRS by post.

Rejection Of Submitted 990 Forms

Even if your 990 Form gets rejected, you can still re-transmit it after making the necessary corrections. If you have e-filed your 990 Form using irs990.org and got it rejected, don’t worry. You can re-transmit after making the correction at no extra charges.

Can IRS Form 990 Be Seen By Public?

Yes! It is mandatory for the nonprofit organizations to make their IRS Form 990 and exemption application available for the public inspection during the regular business hours. There are various nonprofit organizations who make the 990s available for seeing on their websites.

In addition, you can view them on Guidestar, which is an organization that compiles information related to nonprofits.

If you have filed 990 Form with our e-filing software, we will send your returns to the GuideStar instantly.

Nonprofits Who Are Exempted From Filing IRS Form 990

There are certain nonprofits who aren’t required to file annual returns. These firms won’t even need to file 990. the following are some of them -

  • Churches and Faith based organizations such as religious Schools, missions or missionary organizations.
  • Government Corporations
  • Certain state institutions are exempted from filing 990 because they provide essential services.
  • Nonprofits which aren't listed in the system. If you an unincorporated nonprofit or an incorporated nonprofit operating in your state and don't plan applying to the IRS for exemption from the federal income tax.

It is necessary that you check with the IRS to find out if your firm needs to file a return.