If you’re new to the nonprofit world, thinking about starting one, or suddenly find yourself in charge of the taxes for the charity where you volunteer, don’t panic about filing annual taxes. There’s no reason to dread your annual tax filing, especially if you’re a small nonprofit.
In fact, if the annual receipts for your public charity are less than $50,000, there’s only one simple form you need: Form 990 N.
We’ve compiled the rudimentary basics for you so that when it comes to filing, you’re ahead of the game. There’s no reason to feel overwhelmed when it comes to filing your Form 990 N for your nonprofit.
- What is the Form 990 N?
- I just got here! Where do I start?
- How do I calculate my gross receipts?
- When do I need to file?
- How much, or how little, information do I need to include?
- Do I need to itemize employees, board members, and volunteers?
- Where do I file the form?
What is the Form 990 N?
Small public charities with annual gross receipts of normally $50,000 or less must file the electronic Form 990 N. This form is known as the Electronic Notice (e-Postcard) for Tax-Exempt Organizations Not Required to File Form 990 or Form 990EZ, according to the Internal Revenue Service.
Any 501(c)(3) is designated as an organization to serve the greater good of the community and is not required to pay taxes. That doesn’t mean you don’t have to file taxes to show how much your charity pulled in donations. Filing doesn’t have to be difficult! In fact, with the 990 N, it’s about as simple as can be. If your chapter is under $50,000 in gross receipts per year, you can file the e-Postcard and be done with it. You can choose to file the more thorough Form 990EZ or the full Form 990, but that is not required.
I just got here! Where do I start?
Begin at the beginning: know the size of your organization. If no one can tell you the annual gross receipts for the nonprofit, most likely the total is less than $50,000 per year. Yet we both know what it means to assume such things.
Your safest bet is to consult your donor software management system for monthly donations of cash and goods, and determine the exact annual total. No donor software? Consult the prior bookkeeper. By piecing together information, you’ll soon have a good handle on the prior year’s numbers. If the total is under $50,000, then the Form 990 N is for you. If the prior year’s gross receipts are over $50,000, then you’ll graduate to the Form 990EZ. Either way, don’t worry! File 990 is available to help your public charity no matter how small you may be. We take the worry and anxiety out of filing the correct form, at the correct time.
How do I calculate my gross receipts?
Tracking your cash and non-cash donations throughout the year doesn’t have to be difficult. Cash donations include voluntary contributions, grants and cash gifts from the general public, governmental grants, other foundations, or other exempt organizations. To be clear, the general public is defined as everyone from individuals to corporations, public trusts to estates.
Donations of non-cash items are a little more complicated, but don’t have to be. Just use the fair market value for the item at the time of donation. Once you’ve determined your total receipts for the year and they total less than $50,000, you’re ready to file your Form 990 N.
When do I need to file?
According to the Internal Revenue Service, “the Form 990–N is due every year by the 15th day of the 5th month after the close of your tax year. You cannot file the e-Postcard until after your tax year ends. Example: If your tax year ended on December 31, the e-Postcard is due May 15 of the following year.”
Failing to file, however, can result in fines and penalties. Organizations that fail to file Form 990 are charged a penalty of $20 a day, not to exceed $10,000 or 5% of gross receipts. With File 990’s simple tools and reminders, there’s no reason to ever miss a filing deadline. File 990 will make sure your organization is on the right foot going forward so that as you grow, they’re right with you at every step. After all, the success of your nonprofit matters. File 990 wants to partner with you in your success!
How much, or how little, information do I need to include?
Since the 990 N is the simplest form to file, you only need the basic information regarding your organization.
To file, you’ll need to know the following eight things:
- your nonprofit’s Employer Identification Number (EIN) and the organization’s Taxpayer Identification Number (TIN)
- the tax year you are filing
- the legal name and mailing address for the organization
- any other names the organization may use
- the name and address of the principal officer
- the URL for the organization
- confirmation that the organization’s annual gross receipts are under $50,000
- if applicable, a statement if the organization is going out of business
Do I need to itemize employees, board members, and volunteers?
No. For the Form 990 N, you only need to include the name of the organization’s principal officer. As long as all of your information is correct, the e-Postcard will probably be the easiest part of your job!
Where do I file the form?
The best part about this form is that there is only one place to find it and one place to file it. Although called the e-Postcard, it’s not a postcard at all. It can only be filed online. For more about filing your Form 990 N, the Internal Revenue Service offers complete information here.
File 990 has your back for the information and tools you’ll need going forward. We’re happy to help, and to partner in the success of your organization for years to come.
Questions or comments? Please drop us a line below.