Let’s face it: most of us don’t like doing our taxes.  Even if you’re not expecting to owe any money to the IRS, it can still be quite the hassle.  Tax software like TurboTax and tax accountants can help, but it is still overwhelming and, oftentimes, stressful.  Filing nonprofit taxes is no different, but thankfully there are numerous nonprofit tax resources out there that can help.

Nonprofit Taxes

You will need to file yearly taxes for your non-profit organization only if it has been registered as a tax-exempt organization.  You would have done so by filing Articles of Incorporation and then Form 1023 in order to obtain the tax-exempt status.  So, basically, even though your non-profit organization won’t owe any money to the government, it still needs to prove that it is indeed tax-exempt and not making enough money to be considered for-profit.  

It is essential to file nonprofit taxes for your organization in order to maintain its tax-exempt status.  And, if you continue to miss deadlines and fail to file nonprofit taxes for three or more consecutive years, then your organization will lose its tax-exempt status.  After that, not even the best, most useful nonprofit tax resources can make it easier to reinstate that status. There are fees, and lots of paperwork that will only continue to make things more difficult for everyone involved.   

Tax forms are typically due on the 15th day of the fifth month after the last month that ended your nonprofit organization’s fiscal tax year, which, for most organizations, is May 15th.

It can be difficult to determine which form you need to file your nonprofit taxes.  The most common ones are: 

  • Form 990 (the full-length form): for tax-exempt organizations whose gross receipts are greater than or equal to $200,000 
  • Form 990-EZ (a much shorter version): for tax-exempt organizations whose gross receipts are between $50,000 and $200,000
  • Form 990-N (also known as an e-postcard): for tax-exempt organizations whose gross receipts are under $50,000

There are numerous other related  forms, and of course your nonprofit taxes will vary depending on what activities your nonprofit organization participates in, if the organization has experienced a growth or loss in recent years, etc.  

Unfortunately, there are some states that have additional tax filing requirements, and nonprofit tax resources such as this can help.  Also, be aware that as of this year, 2020, all tax-exempt organizations — no matter the size — are required to e-file their nonprofit taxes.  The Taxpayer First Act, enacted in July of 2019, aims to increase the use of modern technology, among its other goals.  The new IRS regulation will not affect smaller nonprofits that have been e-filing Form 990-N all along, although it can be an adjustment for those accustomed to paper filing. 

If you want to make things as easy as possible when it comes time to file your nonprofit taxes, you must manage your nonprofit’s finances as best you can.  This includes ensuring that you are keeping accurate, up-to-date financial records, so that you are not scrambling to find everything when you do need to file your nonprofit taxes.  Maintaining a solid, effective budget is an essential part of this preparation.      

Nonprofit Tax Resources

If you’re feeling rather intimidated and stressed about filing taxes for your nonprofit, for perhaps the first time, try to relax.  You are not the only nonprofit treasurer who feels that way. Thankfully, there are plenty of nonprofit tax resources that are meant to make your life easier, to improve efficiency when filing those taxes.  

There are some good habits that you can get yourself into in order to prepare to file your nonprofit taxes.  One thing that you can do is take an IRS tax prep course geared towards non-profit organizations.  You may even want to perform an audit, especially if your organization’s assets are on the higher side.  Also, be sure to have a backup plan if you are unable to file your nonprofit taxes in a given year for whatever reason; you may ask someone else within the organization for take over, or even a tax accountant.    

If you are your nonprofit organization’s new treasurer, or if you just need a refresher, nonprofit tax resources that remind you to ask yourself certain questions — in regards to filing those taxes — can be useful.  You can also use these four tax tools to assist you in filing nonprofit taxes.    

You’re reading a blog right now, so why not do more of that?  Of course, you’re welcome to browse File990’s blog, but there are many other reputable ones out there that are specifically geared to nonprofits.  You can also subscribe to various publications, such as The NonProfit Times, to stay up to date with the goings-on in the nonprofit world.    

If you’re unsure of your organization’s tax-exempt status — which is possible — there are other nonprofit tax resources, such as the IRS’ searchable database for tax-exempt organizations.  You can also look up your organization on GuideStar and Charity Navigator, which is also a great to see how your nonprofit appears to potential donors and stakeholders.     

How Nonprofit Tax Resources like File990 Can Help

In addition to the nonprofit tax resources mentioned above, there is File990, a certified e-filer that has been approved by the IRS.  What is more, File990 is nonprofit tax software that has continued to stay ahead of the curve in providing secure, reliable, efficient e-filing services for tax-exempt organizations. 

File990 can streamline the process of filing your nonprofit taxes, by doing such things as providing you with yearly reminders when it is time to file your taxes.  While you can easily file Forms 990, 990-N, and 990-EZ, there is also the Enterprise system; this program is for nonprofits with multiple chapters or components. 

File990 uses the highest level of security in protecting sensitive information, and an equal level of security is used when submitting your tax forms to the IRS.  Forms are actually sent within minutes to the IRS, so you don’t have to wait for a long time to learn if your filing was successful. 

Have questions or want to learn more about File990’s services? (859) 309-3641  /  info@file990.org.