Avoids IRS Penalties – Late or inaccurate filings can lead to financial penalties and increased IRS scrutiny. Demonstrates Mission Impact – A well-prepared Form 990 highlights your nonprofit’s achievements and financial responsibility. For prior year forms, use the Prior Year search tool on the IRS Forms, Instructions & Publications page. Explains the different sections of the Form 990-PF and how to interpret the contents of a foundation’s annual return. This paper reviews the parts of the form, identifies the fields people find most useful, and provides tips trial balance for deciphering the information in the 990.

How does the 990 differ from a traditional tax return?

If an organization receives a charitable contribution of property and within 3 years sells, exchanges, or otherwise disposes of the property, the organization may need to file Form 8282, Donee Information Return. Each jurisdiction can require the additional material to be presented on forms they provide. The additional information shouldn’t be submitted with the Form 990 or 990-EZ filed with the IRS, unless included on Schedule O (Form 990). 15 (Circular E) for more details, including the definition of responsible persons. Used to report cash amounts in excess of $10,000 that were received in a single transaction (or in two or more related transactions) in the course of a trade or business (as defined in section 162).

• You must enter information about your organization, such as your Employer Identification Number (EIN), contact information, fiscal year, and other relevant details.
• Examples of such revenue include receipts from the sale of donated merchandise, interest (unless debt-financed), and receipts from bingo games.
• Under those circumstances, the organization may explain on Schedule O (Form 990) why it answered “No” to line 11a.
• Used to report social security, Medicare, and income taxes withheld by an employer and social security and Medicare taxes paid by an employer.
• These items are described to illustrate special applications of the rule described above that a disregarded entity’s activities and items must be reported on the organization’s Form 990 and applicable schedules.

Allocating Indirect Expenses

• This includes a hospital facility that is operated through a disregarded entity or a joint venture treated as a partnership for federal income tax purposes.
• Check “No” if the organization answered “Yes” on line 3a but hasn’t filed Form 990-T by the time this Form 990 is filed, even if the organization has applied for an extension to file Form 990-T.
• 990 returns are generally due on the 15th day of the 5th month after the end of an organization’s accounting period.
• Be certain to indicate in item A of Form 990, page 1, the date the organization’s fiscal year began in 2025 and the date the fiscal year ended in 2026.
• There are different kinds of Form 990, depending on the size and financial activity of the nonprofit.

Although it’s a brief and straightforward filing, submitting Form 990-N is crucial for maintaining an organization’s tax-exempt status. Failure to file for three consecutive years can result in the automatic revocation of that status by the IRS. Form 990 is more than just a tax form; it’s a vital tool for nonprofit transparency and credibility.

Management of Companies and Enterprises

• Maintaining tax-exempt status is critical for nonprofit organizations, and correctly filing IRS Form 990 is a key aspect of this process.
• Since nonprofit organizations are tax-exempt, that means they don’t have to file taxes, right?
• Form 990 is due by the 15th day of the 5th month after the end of your organization’s tax year.
• C’s independence as a Board member isn’t compromised by receiving compensation from X as a Board member (and not as an officer or employee).
• A qualified state or local political organization must file Form 990 or 990-EZ only if it has gross receipts of $100,000 or more.
• These investments are made primarily to accomplish an exempt purpose of the investing organization rather than to produce income.

The following is a list of special instructions for the form and schedules regarding the reporting of a disregarded entity of which the organization is the sole member. These items are described to illustrate special applications of the rule described above that a disregarded entity’s activities and items must be reported on the organization’s Form 990 and applicable schedules. A regional or district office isn’t required, however, to make its annual information return available for inspection or to provide copies until 30 days after the date the return is required to be filed (including any extension of time that is granted for filing the return) or is actually filed, whichever is later. An annual information return doesn’t include any return after the expiration of 3 years from the date the return is required to be filed (including any extension of time that has been granted for filing the return) or is actually filed, whichever is later. For this purpose, the excess benefit is defined as the amount of the grant, a loan, compensation, or similar payments. Additionally, an excess benefit transaction includes any loans provided by the supporting organization to a disqualified person (other than an organization described in section 509(a)(1), (2), or (4)).

Nonprofits and Sales Taxes

The maximum penalty for late returns is the lesser of $10,500 or 5% of the organization’s gross receipts for the year. If your organization doesn’t file the return by the specified date, individuals responsible for the delay may face a penalty of $10 per day, with a maximum of $5,000 for all individuals. Form 990, officially Bookkeeping 101 titled “Return of Organization Exempt from Income Tax,” is an annual informational document for an organization’s tax-exempt status with the IRS.

Forms 990 and 990-EZ are used by tax-exempt organizations, nonexempt charitable trusts, and section 527 political organizations to provide the IRS with the information required by section 6033. The IRS uses Form 990 to keep tabs on tax-exempt organizations and ensure they are operating within the bounds of the exempt purpose that qualifies them for their tax-exempt status. Not only does it help the IRS, but it also shows everyone — from potential donors to the federal government — that your nonprofit is handling its money responsibly. A Schedule C may also be necessary to report the political activities of a tax-exempt organization. Other documents include a Schedule D to provide more detailed financial statements, a Schedule F to report the organization’s level of activity outside the United States and a Schedule G to describe the organization’s fundraising activities. Organizations that file Form 990 or Form 990-EZ use this schedule to provide information on certain financial transactions or arrangements between the organization and disqualified persons under section 4958 or other interested persons.

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Report on line 25 (and not line 23) any secured mortgages and notes payable to related organizations. Enter amounts for the use of office space or other facilities, including rent; heat, light, power, and other utilities expenses; property insurance; real estate taxes; mortgage interest; and similar occupancy-related expenses. Don’t include on line 16 expenses reported as office expenses (such as telephone expenses) on line 13.