If your nonprofit isn’t exempt from filing taxes, the CPAs at Steward Ingram & Cooper, PLLC provide nonprofit tax preparation that protects your tax-exempt status with accurate financial reporting. Since 2000, Steward Ingram & Cooper, PLLC has served nonprofit organizations in the Raleigh area and is here to provide nonprofit tax planning and preparation for yours. To learn more about our services and capacity to take on new clients, call (919) 872-0866 or fill out the form below.
While tax-exempt non-profit organizations generally do not pay federal taxes, most do have to file an informational return (Form 990) with the IRS. This form allows the IRS, shareholders, and the public to review your non-profit’s operations and includes information on your organization’s mission, programs, and finances.
Non-Profit Tax Services
We offer the following services to our non-profit clients:
- Audited financial statements
- Reviewed or compiled financial statements
- Preparation of the Form 990 series of returns
- Assistance with budgets
- Internal control consulting
- Bookkeeping
Filing an informational return is much different from filing taxes as an individual or even as a business. At Steward Ingram & Cooper PLLC, we help non-profit organizations like yours complete your informational return. We assist clients in Raleigh, Cary, Chapel Hill, Durham, Garner, Morrisville, Wake Forest, Wilson, and surrounding areas.
Filing Taxes as a Non-Profit Organization
Your annual return is more than just a tax return. It’s an overview of your financials, and it highlights your organization’s achievements throughout the year and reports any potential conflicts of interest, board member and staff compensation, and avoidance of fraud.
Tax-exempt non-profits should know the following about the annual return:
Some Organizations are Exempt From Filing a 990
Who is Exempt from Filing?
Most religious organizations, including churches, religious schools, and missionary organizations, are not required to file or submit Form 990. Subsidiaries of non-profits are also not required to submit the tax return since their financial information is reported in the parent organization’s 990. Additionally, government corporations or state institutions are exempt from filing, and non-profits that are unincorporated or incorporated at the state level but don’t plan to apply to the IRS for tax-exemption don’t have to file.
Does My Exempt Organization Have to File a Return?
With some exceptions, most tax-exempt organizations are required to file an annual information return with the IRS, which is part of the 990 series of returns.
Which Return Should a Nonprofit File?
There are different versions of the form for different organizations: Form 990, 990-EZ, and 990-N. The Raleigh tax professionals at Steward Ingram & Cooper can help determine which version of Form 990 is best for your nonprofit and assist you in filing your nonprofit tax return.
There are several different forms to choose from in the 990 series of returns. The filing requirements ultimately depend on total gross receipts and total assets.
| Return | Who Files | Details |
|---|---|---|
| 990-N (ePostcard) | Annual gross receipts are normally $50,000 or less. | Organizations not required to file a 990 or 990-EZ should file the 990-N, also called ePostcard. This form must be filed electronically with the IRS through their website at irs.gov. Organizations eligible to file a 990-N may choose to file the 990 or 990-EZ instead. There is no extension allowed for the 990-N. |
| 990-EZ | Gross receipts are less than $200,000 and total assets are less than $500,000. | A shorter, simpler version of the 990 with only 4 pages. Filers of the 990-EZ may still be required to complete some of the 16 schedules associated with the 990. Must be filed electronically. |
| 990 | Gross receipts are $200,000 or more or total assets are $500,000 or more. | The most extensive form in the series. It is a 12-page form with 16 supporting schedules. An organization may not necessarily be required to complete all 16 schedules but should pay careful attention to the questions on the core form to determine which schedules will be required. Must be filed electronically. |
| 990-PF | Private foundations | An annual information return that must be filed by private foundations. This return provides financial and other relevant information about the foundation. |
When to File Your Nonprofit Tax Return
The deadline for filing your return is not the same as the deadline for your personal taxes. The deadline for tax-exempt non-profits is the 15th day of the 5th month after your fiscal year ends. The due date for the Form 990 series of returns is the 15th day of the 5th month after the close of the organization’s accounting period. For calendar year organizations, the due date is May 15th. For fiscal years ending on June 30, the due date is November 15th. Failing to file on time for three years in a row will result in your tax-exempt status being revoked.
Can My Organization Request an Extension?
The IRS allows an automatic 6-month extension of time to file for the 990, 990-EZ and 990-PF. The extension can be requested using Form 8868. There is no extension allowed for the 990-N.
What Happens if Form 990 is not Filed or Filed Late?
If an exempt organization fails to file Form 990 for 3 consecutive years its tax-exempt status will be revoked. If a return is filed late, the IRS will assess penalties unless the organization can provide a reasonable cause for the late filing.
What Happens if Your Nonprofit Owes Taxes
Tax-exempt doesn’t always mean you won’t owe taxes, even as a nonprofit. For example, your nonprofit may owe federal income tax on unrelated business income, such as some advertising sales or equipment rentals. Charitable donations and most investment income are generally excluded from being taxed, as are membership fees. Significant unrelated activity can also raise questions about your tax-exempt status or trigger an audit. Working with your CPA to review financial activities before tax filing time can help avoid surprises.
Tax Planning for Nonprofit Organizations
Our CPAs will review the following documents and topics with your board and treasurer, as requested:
- Fiscal year choice and how it moves your filing and state renewal dates
- Donor acknowledgments, including written receipts for gifts of $250 or more
- Disclosures for fundraising events
- Whether any activity creates unrelated business income
- Public support and how it is reported on Schedule A
- Payroll, 1099 reporting, and board and staff compensation reporting
- Budgets and internal controls
Your return also reports expenses by function: program services, management and general, and fundraising. Expenses allocated across those categories need a consistent, documented method, and they appear on the functional expense statement that boards and funders review. Clean books make that work much easier, which is why our bookkeeping and nonprofit financial statement preparation services keep your accounts payable, accounts receivable, and expense classifications in order year-round and support consistent financial reporting.
North Carolina Requirements for Nonprofits
The annual return is a federal filing, but the state of North Carolina has its own filing requirements. Charitable organizations that solicit contributions in North Carolina need a charitable solicitation license from the NC Secretary of State, unless an exemption applies, and must renew it each year. The renewal includes financial information for the prior fiscal year: a 990 or 990-EZ with Schedule A, an audited financial statement, or the state’s annual financial report form. A 990-N is not accepted for this purpose. Qualifying nonprofits may also request a refund of North Carolina sales and use tax on eligible purchases (Form E-585). Exemptions and thresholds change, so we confirm current requirements for each client.
Non-Profit Tax Planning: Frequently Asked Questions
Do nonprofits pay taxes?
Tax-exempt nonprofits generally do not pay federal income tax on income, but most must file an annual information return with the IRS. If your nonprofit owes tax on unrelated business income, you’ll work with your CPA to report on Form 990-T.
Do I need to file a tax return for my nonprofit?
Yes. While most nonprofits don’t pay taxes, you do need to file a return to provide the IRS with detailed documentation to keep your tax-exempt status. We will prepare your Form 990 so you can easily share information with your board of directors and donors, as well as file your informational return.
How do I file taxes for my non-profit organization?
Start by working with your CPA to confirm which return you need based on your gross receipts and total assets. We will reconcile your books for the fiscal year, prepare the return and any schedules, and review it. Then, we’ll file it electronically by the due date, or request an extension if you’re filing after the deadline. Many organizations also have a North Carolina renewal to complete.
What is Form 990?
Your Form 990 is an overview of your finances. It highlights your organization’s achievements throughout the year and provides relevant information for board members and potential donors.
There are several types of 990 forms that can impact your filing status. The nonprofit tax planning professionals at Steward Ingram & Cooper PLLC can help determine and file the appropriate form for your nonprofit.
Does my nonprofit need financial statements as well as a tax return?
No, they are separate. The annual return is an IRS filing, while financial statements are prepared under nonprofit accounting standards such as GAAP and may be compiled, reviewed, or audited. Financial statements are usually requested by lenders, grantors, and boards.