Form 990s and more: a quick tax guide for small nonprofits

Versions of Form 990

If certain excise, income, social security, and Medicare taxes that must be collected or withheld aren’t collected or withheld, or these taxes aren’t paid to the IRS, the trust fund recovery penalty can apply. The trust fund recovery penalty can be imposed on all persons (including volunteers) who the IRS determines were responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. Required of section 4947(a)(1) nonexempt charitable trusts that also file Form 990 or 990-EZ.

Fundraising expenses are the expenses incurred in soliciting cash and noncash contributions, gifts, and grants. Report as fundraising expenses all expenses, including allocable overhead costs, incurred in (a) publicizing and conducting fundraising campaigns; and (b) soliciting bequests and grants from individuals, foundations, other organizations, or governmental units that are reported on Part VIII, line 1. This includes expenses incurred in participating in federated fundraising campaigns; preparing and distributing fundraising manuals, instructions, and other materials; and preparing to solicit or receive contributions. Report direct expenses of fundraising events on Part VIII, line 8b, rather than in Part IX, column (D).

Your Form 990 deadline

This Snapshot feature is just one of many tools Instrumentl offers to streamline the grants application process. Searching for grants can be a daunting challenge, especially if you are a newer nonprofit or serving a sector where grants are highly competitive. For instance, a women’s shelter seeking grants to provide temporary emergency housing for women and children will want to search for grantors 2023 Consumer Products Industry Outlook Deloitte US with a strong interest in abuse and domestic violence. This makes the Form 990 a great discoverability tool, and it is why Instrumentl makes it so easy to dissect and understand the information provided by it. You can also expand your search to other nationwide shelters and animal-focused nonprofits to see what kind of grants not limited to geographic location are available to you.

Versions of Form 990

For columns (B) through (D), add lines 2a through 2f, 3, 4, 5, 6d, 7d, 8c, 9c, 10c, and 11a through 11d. The amounts reported on line 12 in columns (B), (C), and (D), plus the amount reported on line 1h, should equal line 12, column (A). Combine the gain or loss figures reported on line 7c, columns (i) and (ii), and report that total on line 7d. Don’t include any unrealized gains or losses on securities carried at FMV in the books of account.

Form 990 contains updates affecting compensation reporting and short period return filers

If the organization transmits any of these forms electronically, add this number to the total reported. Examples of payments requiring Form 1099 reporting include certain payments to independent contractors for services rendered. Report on this line Forms 1099, 1098, 5498, and W-2G filed by reporting agents of the filing organization, including common paymasters and payroll agents, for the calendar year ending with or within the organization’s tax year. Enter -0- if the organization didn’t file any such forms for the calendar year ending with or within its tax year, or if the organization is filing for a short year and no calendar year ended within its tax year. In general, the aggregate compensation that is reported (or required to be reported, if greater) in box 1 or 5 of Form W-2 (whichever amount is greater); box 1 of Form 1099-NEC; and/or in box 6 of Form 1099-MISC, for the calendar year ending with or within the organization’s tax year.

  • This requirement applies whether or not the plan is qualified under the Internal Revenue Code and whether or not a deduction is claimed for the current tax year.
  • However, you can also do the reverse by looking at the 990s of nonprofits similar to yours to figure out who is funding them—which can ultimately help you find potential grants.
  • The 990-EZ and 990-N are for nonprofits who grossed less during the year (over $50,000 in total gross receipts and under $50,000 respectively).
  • The group of one or more persons authorized under state law to make governance decisions on behalf of the organization and its shareholders or members, if applicable.
  • Other securities reportable on line 12 also include publicly traded stock for which the organization holds 5% or more of the outstanding shares of the same class, and publicly traded stock in a corporation that comprises more than 5% of the organization’s total assets.

However, if the trust doesn’t have any taxable income under subtitle A of the Code, it can file Form 990 or 990-EZ, and doesn’t have to file Form 1041 to meet its section 6012 filing requirement. If this condition is met, complete Form 990 or 990-EZ, and don’t file Form 1041. The regulations make it clear that the IRS will apply the procedures of section 7611 when initiating and conducting any inquiry or examination into whether an excess benefit transaction has occurred between a church and a disqualified person. A person participates in a transaction knowingly if the person has actual knowledge of sufficient facts so that, based solely upon the facts, the transaction would be an excess benefit transaction.

Understanding the 990 Form: All Nonprofits Need to Know When Researching Grants

The person who has ultimate responsibility for managing the organization’s finances, for example, the treasurer or chief financial officer. One of the organizations, typically local in nature, that is recognized as exempt in a group exemption letter and subject to the general supervision and control of a central organization. The value that would ordinarily be paid for like services by like enterprises under like circumstances. All activities intended to influence foreign, national, state, or local legislation. Such activities include direct lobbying (attempting to influence the legislators) and grassroots lobbying (attempting to influence legislation by influencing the general public). An annual accounting period ending on the last day of a month other than December.

Section 501(c)(3) organizations that file Form 990-T are also required to make their Forms 990-T publicly available for the corresponding 3-year period for forms filed after August 17, 2006 (unless the form was filed solely to request a refund of telephone excise taxes). The statement must be in an easily recognizable format whether the solicitation is made in written or printed form, by television or radio, or by telephone. An excess benefit transaction can have serious implications for the disqualified person that entered into the transaction with the organization, any organization managers that knowingly approved of the transaction, and the organization itself. See Appendix G. Section 4958 Excess Benefit Transactions, later, for a discussion of section 4958; Schedule L (Form 990), Transactions With Interested Persons, Part I; and Form 4720, Schedule I, regarding reporting of excess benefit transactions. Complete lines 25a and 25b only if the organization is a section 501(c)(3), 501(c)(4), or 501(c)(29) organization. If the organization isn’t described in section 501(c)(3), 501(c)(4), or 501(c)(29), skip lines 25a and 25b and leave them blank.