Operating a non-profit comes with its own set of unique financial and tax requirements. For many non-profits in Green Bay and De Pere, staying compliant with the IRS is critical to continuing their mission and ensuring that their tax-exempt status remains in good standing. One of the most important aspects of compliance is filing the correct IRS Form 990 annually, which depends on your organization's size, income, and financial structure. Here's what you need to know about filing requirements for non-profits, as well as which form your organization needs to file: the 990-N, 990-EZ, or the full 990.
### Key Filing Requirements for Non-Profits
Every non-profit organization, regardless of size, must submit some form of annual return to the IRS. The most common options are Form 990-N, Form 990-EZ, and Form 990. Which one you file depends largely on the financial data from your non-profit's previous fiscal year. If you’re unsure which form applies to your organization, consulting a professional who specializes in tax prep for non-profits can save you time and hassle.
Form 990-N is the simplest of these forms and is often referred to as the "e-postcard." This form is available to non-profits with gross receipts of $50,000 or less. It’s an electronic-only form, and the IRS encourages small organizations to use it to keep their compliance straightforward. Even if your non-profit has no income for the year, you still need to file this form to maintain tax-exempt status.
For many smaller non-profits in Green Bay, Form 990-N is a quick and easy solution. However, you should keep detailed records of your income and expenses throughout the year to ensure that your organization remains eligible for this simplified form.
### When to File Form 990-EZ
As your non-profit grows, it may surpass the $50,000 threshold, requiring you to file a more detailed form: Form 990-EZ. This version is used by non-profits that have gross receipts between $50,000 and $200,000 and total assets under $500,000 at the end of the fiscal year. While it is more comprehensive than Form 990-N, it’s still a simplified version of the full Form 990, making it manageable for mid-sized organizations.
Organizations in De Pere that see consistent growth often find themselves switching to the 990-EZ form, as their financial situation becomes more complex. Filing Form 990-EZ requires additional financial details, including a statement of revenue and expenses, which can be overwhelming without the proper tracking system in place. At this stage, it becomes essential to establish robust accounting practices and to maintain accurate, year-round records.
Hiring a CPA firm that specializes in non-profit tax prep can make a big difference in ensuring your filings are both accurate and timely. A tax professional will also help you track essential financials like donations, grants, and expenses, ensuring your non-profit’s continued growth without the risk of IRS penalties.
### When to File the Full Form 990
Larger non-profits, or those with gross receipts exceeding $200,000 or total assets over $500,000, are required to file the full Form 990. This is the most detailed version of the form and provides a comprehensive overview of your non-profit’s finances, governance, and mission.
If your non-profit operates in Green Bay or De Pere, and your gross receipts exceed this threshold, filing the full Form 990 is non-negotiable. The IRS uses this form to monitor the activities of large non-profits and ensure they are acting in accordance with their tax-exempt status. In addition to detailed financial reports, Form 990 also includes a list of your organization's key personnel, a breakdown of salaries, and a section on governance policies.
Due to its complexity, many organizations turn to professional tax prep services to handle Form 990 filings. A mistake on this form can lead to significant fines, or even the loss of your non-profit’s tax-exempt status, so accuracy is paramount.
### Staying Compliant Year-Round
Regardless of which form your non-profit files, maintaining compliance with the IRS requires year-round diligence. Proper bookkeeping, regular financial reviews, and organized record-keeping are all crucial to ensuring your non-profit is on track to meet its tax obligations. Non-profits in De Pere and Green Bay should consider setting up systems that track donations, income, expenses, and volunteer time in an organized manner. This ensures the filing process goes smoothly and minimizes the risk of errors.
Ultimately, the form you file—whether it’s 990-N, 990-EZ, or the full 990—depends on the size of your organization and your financial situation. If you’re ever unsure of which form to file, a CPA specializing in non-profit tax prep can guide you through the process, keeping your organization in good standing with the IRS year after year.
Maintaining compliance with the IRS is crucial to the longevity of your non-profit’s mission. By keeping track of important financial data and understanding the requirements for filing each form, you can focus on making a positive impact in the community.
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