If you’re scouring the internet for 501 c 3 forms, it probably means you’re on the path to establishing a nonprofit organization. That is, of course, great news! The charitable-minded have made substantial impacts on society. In recent years, the necessity of nonprofits has been made self-evident.
According to Giving USA, Americans gave a record $424.74 billion in 2017. Last year, “American individuals, bequests, foundations and corporations gave an estimated $427.71 billion to U.S. charities,” despite a 1.7% decline in giving from 2017 when adjusted for inflation.
With giving as popular as it is (roughly half of Americans donate to charities), people have their pick. The National Center for Charitable Statistics suggests there are over 1.5 million nonprofits in the U.S. alone.
Now you’ve decided to join those exalted ranks. You have your own unique vision for your 501 c 3 organization, and you want to share it with the world.
What You Need to Know about 501 c 3 Forms:
- How Do I Make My 501 c 3 Officially Recognized?
- How Do I File for Tax Exemption?
- What Forms Do I Need to Maintain Tax-Exempt Status?
- How Can an IRS-Certified e-Filer Help?
While all this paperwork can seem overwhelming, worry not. Ultimately, it’s just another step along the way to your success, and File 990 can help.
How Do I Make My 501 c 3 Officially Recognized?
When you first establish your 501 c 3 organization, you need to file Articles of Incorporation through your Secretary of State’s office and receive your EIN (Employer ID).
You’ll include some basic information in this process, such as the name and structure of your organization, office address, and info outlining your tax exemption details.
Read more about the process here, or get in touch with your Secretary of State’s office and ask about their nonprofit formation packet or other guiding documents.
How Do I File for Tax Exemption?
Filing for tax exemption is an essential step in the process of establishing your 501 c 3 nonprofit.
This establishes your relationship with the IRS, investors, donors, and other key stakeholders in your organization.
Filing for federal exemption is easy.
You must file one of the two forms to register as a 501 c 3 with the IRS:
Form 1023-EZ: for small to medium sized 501(c)(3)s seeking new or reinstated tax-exempt status. You must file the full 1023 if any of the following are true: your gross receipts exceeded $50,000 in the past three years or are projected to exceed that amount in the following three years; your total assets are in excess of $250,000; other stipulations mentioned on the 1023-EZ instructions.
Form 1023: 501(c)(3) organizations must file this form when seeking tax-exempt status or to reinstate tax exempt status with the IRS if they do not meet the filing requirements of the 1023-EZ.
Note: Remember to register with pay.gov before filing.
Keep in mind that the IRS charges a user fee for filing Form 1023 ($600) or Form 1023-EZ ($275).
Once you’ve filed and received your determination letter from the IRS, you can check that you’re in the system as a tax-exempt organization at any time by using the Tax Exempt Organization Search, or TEOS. This is a public search function that potential donors and others in the general public can use to learn about your nonprofit’s status with the IRS.
Don’t forget to file for state tax exemption.
Not all organizations must file for state-level exemption. This varies on a state-by-state basis. However, if you do need to file, remember to do so in addition to filing federal documents.
This is important, because you may be exempt from paying state and local income taxes on your net profits (although this also varies somewhat).
You may be required to file a simple form consisting of a few pages or a more detailed version with your state’s department of revenue and taxation.
What Forms Do I Need to Maintain Tax-Exempt Status?
Once your nonprofit is officially a tax-exempt 501 c 3 organization, you need to file 990 tax forms annually to maintain exemption.
990 forms are due on the 15th day of the 5th month after the end of your organization’s accounting period. This would be May 15th for a calendar year taxpayer.
It’s important to file these forms for several reasons:
- 990s are a crucial public document that helps maintain financial transparency with your organization’s key stakeholders.
- After three successive years of not filing, the IRS automatically revokes your tax-exempt status.
- You accrue hefty fines for late filing.
Needless to say, it’s better to file your 990 forms—and file them on time.
Here are a few of the most common 990 forms your organization might file:
Form 990: for eligible tax-exempt nonprofits with gross receipts greater than or equal to $200,000 or (2) total assets greater than or equal to $500,000 at the end of the tax year.
Form 990-EZ: for eligible tax-exempt nonprofits with gross receipts less than $200,000 and total assets at the end of the tax year less than $500,000.
Form 990-N (e-Postcard): for eligible tax-exempt nonprofits with annual gross receipts $50,000 or less.
Form 990-PF: for private foundations, either taxable or tax exempt, as well as nonexempt charitable trusts treated as private foundations under U.S. tax code.
How Can an IRS-Certified e-Filer Help?
Having a trustworthy, easy, consistent electronic filing option can make a world of difference for your nonprofit’s financial officer come tax season.
Consider how some of File 990’s services could help your nonprofit:
- secure annual e-filing for 990-EZ and 990-N forms
- automated reminders when it’s time to file
- storage of data from previous years, to make filing easier
- optional enterprise suite to track and remind your multiple components or chapters to file
- a group filing option for 990-N forms.
Have questions about your 990 filing or want to learn more about our e-filing services? Call us at (859) 309-3641 or email firstname.lastname@example.org.