Establishing a non-profit tax exempt organization is not an easy process. A deep understanding of your organization's mission and which tax laws apply are critical in getting a tax exempt status. In addition, the state you operate within may have its own application requirements.
Enrolled Agents can help with all the various paperwork required, both state and federal, in getting tax exempt status for various non-profit organizations, such as charities, Chambers of Commerce, professional organizations, churches, and many others.
Of course, a non-profit organization must meet certain filing and reporting obligations each year to maintain its tax exempt status. Generally, a non-profit organization must file the Form 990 and its relations, reporting such items as.
- 1. Specific revenue and expense categories like donations, salaries, rent, and other expenses.
- 2. Cash, accounts receivable, accounts payable, and other asset and debt categories.
- 3. Expense statements showing which expenses are allocated to program services, fundraising, or operations.
- 4. Schedules of Revenue that detail sources of income from various categories, such as charitable donations, membership fees, investment income.
The IRS reviews a non-profit's Form 990 to determine if your organization will retain its tax-exempt status. So properly reporting revenue and expense information with the appropriate detail is imperative in keeping your tax exempt status.
If you're starting a new not-for-profit organization or need help with an existing one, contact an Enrolled Agent today.