Advantages of a 501(C)(3)

Advantages of a 501(C)(3)

The recognition of your organization as a 501(c)(3) tax-exempt entity by the Internal Revenue Service (IRS) offers many advantages in helping your organization receive donations and establish credibility.

Tax Deduction for Donors:  This encourages donors to donate and receive a benefit, thus incentivizing donors to actively donate to a 501(C)(3) charity or charities.  

Grant Funding Eligibility for the nonprofit:  Many foundations and government agencies limit their grants to public charities. Nonprofit organizations also can offer tax deductions to individuals or businesses that give charitable contributions

Potential Tax Exemption at both State and Federal level: Avoid or minimize paying taxes at federal and state levels, depending the local and state laws.

Federal Unemployment Tax Exemption: Potentially higher thresholds before incurring federal and/or state unemployment tax liabilities

Reduced Postal Rates: Discounts on US Postal rates.

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Tax Exempt, doesn’t always mean taxes don’t need to be paid!

501(C)(3) organizations are exempt from federal taxes, and donations are tax-deductible. However, the organization may still need to pay state and local taxes.