- March 20, 2015
The great advantage to charities and non-profits that IRS is extending through its Forms is to ensure the noble services being rendered to the disadvantaged in a sustainable manner. Unlike businesses making profits and who must pay income taxes, charities, and non-profits do not have to pay income taxes. Also, Non-profits and charities don’t file tax returns like businesses either. However, that doesn’t mean they don’t have IRS 990 tax filings to deal with. Subject to some important exceptions, tax-exempt organizations are required to file an annual information return with the IRS. Especially like most non-profits, when their organization uses the calendar year as its tax year, then the return is due on May 15.
IRS through its tax Form 990 gathers the information return that provides the IRS with detailed financial and other information about charities and non-profits. The information return through Form 990 will show the IRS about the non-profit operations in terms of how judicially the money is spent as collected from donors and whether it is in compliance with the tax laws that govern tax-exempt organizations. These IRS filings are important and always demand timely e-filings of the information return as it may risk the very existence of the non-profit organization and eventually result in losing the tax-exempt status.
3 Types of Non-Profit Information Tax Return Form 990 Series
• Form 990-N, Electronic Notice (e-Postcard) for Tax-Exempt Organizations not Required To File Form 990 or 990-EZ
• Form 990-EZ, Short Form Return of an Organization Exempt from Income Tax, and
• Form 990, Return of an Organization Exempt from Income Tax.
As shown in the chart below, which Form a non-profit must use depends on its gross receipts and, in the case of larger non-profits, the value of its assets. “Gross receipts” means a non-profit’s total income for the tax year from all sources without subtracting any costs or expenses.
|
Annual Gross Receipts |
Form to File |
|
Gross receipts “normally” $50,000 or less
|
990-N |
|
Gross receipts $50,001 to $199,999
Total assets less than $500,000 |
990-EZ |
|
Gross receipts $200,000 or more
Gross receipts $200,000 or more |
990 |
The larger non-profit should normally file the IRS Form 990 must be used by larger non-profits. Form 990 is by far the longest and most complex Form, requiring the most disclosure of organization information. Form 990-EZ is a shorter Form for medium-sized non-profits. Form 990-N is for the smallest non-profits—it is nothing more than an electronic postcard with the organization’s address and the name of the principal officer.
Churches and church-related organizations are not required to file annual returns. In addition, a nonprofit that is a subsidiary of another larger non-profit is exempt from the IRS information filing requirement if the parent non-profit files a consolidated return for its subordinate organizations, including the particular subsidiary non-profit. For example, individual Boy Scout troops usually do not file their own information returns—they are covered by the Boy Scout parent organization’s filing on behalf of all its subsidiary organizations.
Form 990N Extension to File
All nonprofits are allowed one automatic three-month extension of the time to file Form 990 or 990-EZ. Thus, you have as much as seven and one-half months to file either of these Forms following the end your tax year. It is very common for non-profits to obtain the automatic extension. To do so, you must file IRS Form 8868, Application for Extension of Time to File an Exempt Organization Return. The IRS will send you a notice that your request is granted. Do not attach Form 8868 to your return when you file it because it will delay IRS processing of your return.
You can get an additional three-month extension by filing a second Form 8868, but this extension is not automatic—it is granted only at the IRS’s discretion. Your nonprofit must set forth a good reason for the additional extension in Form 8868 for example, its financial records were lost or destroyed.
IRS will not provide an extension of time for filing Form 990-N as it is just a reporting of fewer details and nothing more than an electronic postcard with the organization’s address and the name of the principal officer.
For effective e-filing of your e-postcard 990-n on time for this tax season please visit the trusted IRS tax partner Tax2efile If you want any help simply contact our US customer support team, our team will lead you entire 990 Form filing process with simple steps through support@tax2efile.com or call us at 703.229.3026 or live chat (24/7 available).
