As the 2024 nonprofit tax season unfolds, it’s crucial to revisit the essentials of Form 990 to ensure your 501(c)(3) organization remains in compliance with IRS regulations. Here are five 990 tax facts to keep in mind:
Understanding Form 990
Considered the nonprofit equivalent of a corporate tax return, IRS Form 990 is a mandatory annual filing for most tax-exempt organizations. This comprehensive document provides regulators, funders, volunteers, and other stakeholders with insights into a nonprofit’s performance and financial health.
Who Must File Form 990?
Nearly all nonprofit organizations must file Form 990, including schools, health and welfare organizations, business leagues, civic associations, museums, and private foundations. Private foundations submit Form 990-PF, while larger nonprofits with gross receipts exceeding $50,000 file either Form 990 or Form 990-EZ. Smaller nonprofits with gross receipts below $50,000 are required to file Form 990-N.
Exemptions from Form 990 Filing
Certain entities, such as IRS-designated places of worship, state institutions, and nonprofit subsidiaries, are exempt from filing Form 990. However, it is typically a safe assumption that most organizations must file an annual 990.
Filing Deadline for Form 990
To maintain compliance, organizations must submit Form 990, 990-EZ, 990-N, or 990-PF by the 15th day of the 5th month after the conclusion of their accounting period. For instance, if your fiscal year concludes on December 31, the filing deadline for Form 990 is May 15 of the following year.
Common Mistake: Schedule A Completion
The most prevalent error on Form 990 is the oversight of Schedule A. This section requires charities and specific charitable trusts to prove the organization’s public charity status. This information differentiates the organization from a private foundation, which has different sets of regulations. Schedule A requires the nonprofit organization to disclose the salaries and benefits granted to top officials and the highest-paid independent contractors. Additionally, Schedule A delves into advocacy activities and poses additional questions not covered in the main Form 990.
Ready to Enhance Nonprofit Compliance?
Explore our comprehensive 990 services for more information on Form 990 tax preparation. Visit our Form 990 Tax Preparation page or contact us at 877-857-9002 to ensure your organization stays on the path of nonprofit compliance in 2024.
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