FORM 990: What Paperwork Do I Need for Filing? (Comprehensive Tax Preparation Checklist)

(June 2024)

FORM 990

In This Article

Form 990 is like a report card your organization gives to the IRS. It’s a detailed document summarizing what your organization does, how it’s run, and its financial details. This helps the IRS make sure you’re eligible for tax-exempt status. 

If your organization’s gross receipts are over $200,000 or its assets exceed $500,000, you need to file Form 990 annually. Don’t worry, there are different versions based on your organization’s size and type. It’s essential to file the right one, or you risk losing your tax-exempt status after three years of not filing. 

But good news—if you have groups, like political and religious organizations, then you can catch a break from this requirement. If your numbers fall below $200,000, there’s an easier version called Form 990-EZ that you can use.

Private foundations go for Form 990-PF, and if you’re a black lung benefit trust, it’s Form 990-BL. Now, if your financials are on the smaller side—think gross receipts of $50,000 or less—there’s a super simple online version, Form 990-N, almost like an ‘e-postcard’ that asks for just the basics.

Here’s the crucial part: not getting this right for three years straight can lead to the IRS taking away your tax-exempt status. So, filling out the correct Form 990 isn’t just paperwork—it’s making sure you can keep doing your good work without worrying about taxes. Feeling a bit lost? Then don’t hesitate to navigate this process!

Here’s everything you need to know:

  1. Form 990: Return of Organization 
  2. Form 990-EZ: Short Form Return of Organization
  3. Form 990-PF: Return of Private Foundation
  4. Form 990-BL
  5. Form 990-N (e-Postcard)
  6. How to File Form 990
  7. Consequences of Not Filing

Recap 

1. Form 990: Return of Organization

If your organization makes $200,000 or more in revenue or has assets totaling $500,000 or more, or if it falls into specific categories like donor-advised funds, controlling organizations, hospital facility operators, nonprofit health insurance issuers, or those filing group returns, then you must fill out this form.

This process is essentially a way to ensure that your larger or specialized entities are transparent about their finances. It’s like a financial checkup to make sure everything aligns with the rules.

By completing and submitting this form, your organization not only follows the required regulations but also contributes to the overall accountability and responsible financial practices within the regulatory framework. It’s a step to maintain your organization’s good standing and integrity in the financial realm.

2. Form 990-EZ: Short Form Return of Organization

Form 990-EZ is your go-to document for simplifying tax reporting. If your organization’s annual gross receipts are under $200,000 and its total assets are below $500,000, this form streamlines the process. It’s designed to make your tax obligations straightforward. Just be aware that there are exceptions for certain cases, like supporting organizations, foreign entities, and specific trusts.

By using Form 990-EZ, you’re navigating a simplified path tailored to your financial scale. This not only eases the reporting burden but also ensures compliance with tax regulations. Take the time to assess your financial standing carefully when filling it out, and you may find it’s a helpful tool for keeping your organization on track with its tax responsibilities.

3. Form 990-PF: Return of Private Foundation

Form 990-PF, known as the Return of Private Foundation, mandates annual filing for private foundations, regardless of its income or assets. This means, without exception, you’re required to submit this form each year. It doesn’t matter if your foundation has substantial revenue or modest assets; the obligation remains consistent. 

This ensures regulatory compliance and transparency in the realm of private foundations. By adhering to this requirement, you contribute to the overall accountability and oversight of such organizations. Whether your foundation is well-established or just starting, the annual filing of Form 990-PF is an important step in fulfilling legal obligations.

4. Form 990-BL

You need to file Form 990-BL, the Information and Initial Excise Tax Return for Black Lung Benefit Trusts and Certain Related Persons, if your gross receipts consistently exceed $50,000. This requirement ensures compliance with tax regulations. If your gross receipts are below this threshold, you have the option to use Form 990-N (e-Postcard) instead. 

So, assess your trust’s financial activity annually to determine the appropriate form for filing. This process guarantees that you fulfill your tax obligations accurately and in accordance with the law. Keeping your financial records organized can facilitate a smooth and compliant filing experience.

5. Form 990-N (e-Postcard)

Form 990-N (e-Postcard)

For your organization, filing Form 990-N, also known as the e-Postcard, is required if your annual gross receipts are typically $50,000 or less. There are exceptions for specific cases, such as certain supporting organizations, foreign organizations, pre-1880 armed forces organizations, and ERISA Section 4049 trusts.

This form is crucial for compliance, ensuring transparency about your finances. Stay vigilant about this requirement to maintain your organization’s status and adhere to regulations.

6.  How to File Form 990

Forms can be filed electronically or in paper form. However, electronic filing is mandatory for certain forms after specific dates.

To file Form 990 follow these steps:

  • Organization’s Information: You need basic information about your organization, including its legal name, address, employer identification number (EIN), and the tax year for which the form is being filed. This information helps the IRS identify your organization and process the form accurately.
  • Financial Statements: Gather your organization’s financial statements, including the balance sheet, income statement, and statement of cash flows. These documents provide a comprehensive overview of your organization’s financial activities and are essential for accurately reporting financial data on Form 990.
  • Revenue and Expenses Details: Document all revenue and expenses related to your organization’s activities. This includes income from program services, contributions, fundraising events, and investment income, as well as expenses such as salaries, grants, occupancy costs, and any other relevant expenditures.
  • Compensation Information: Provide details on compensation for key employees, officers, and other highly compensated individuals. This includes salaries, bonuses, retirement benefits, and other forms of compensation. 
  • Governance and Management: Prepare information about your organization’s governing body, management, and policies. This may include details about the board of directors, conflicts of interest policy, whistleblower policy, and executive compensation practices. Understanding your organization’s governance and management structure is crucial for completing Form 990 accurately.
  • Program Service Accomplishments: Document the mission and achievements of your organization’s program services. This involves describing the nature of your organization’s programs, the populations served, and the impact of your activities. Including this information helps provide a comprehensive understanding of your organization’s charitable activities.
  • Fundraising Activities: Provide details about any fundraising activities conducted by your organization. This includes information about events, campaigns, and other fundraising initiatives. 
  • Lobbying and Political Activities: If your organization engages in lobbying or political activities, you need to report these in detail. This includes expenses related to lobbying, advocacy efforts, and any involvement in political campaigns. 
  • Compliance with Tax-Exempt Regulations: Ensure that your organization complies with relevant tax-exempt regulations, including public charity requirements, private foundation rules, and any other specific regulations applicable to your organization’s tax-exempt status. 
  • Documentation of Policies and Procedures: Gather documentation related to your organization’s policies and procedures, including governance policies, financial management policies, and internal control procedures. Having clear, well-documented policies and procedures demonstrates good governance and regulatory compliance.

7.  Consequences of Not Filing

Failure to file for three consecutive years puts your organization at risk of losing its tax-exempt status. Late filings may result in penalties. So ensure timely submission to avoid these consequences.

Keep track of your filing obligations to maintain your organization’s tax-exempt standing and prevent any unnecessary penalties. Stay vigilant about meeting these requirements to safeguard your organization’s financial health and status.

Recap

Form 990 is a crucial document that organizations must file with the Internal Revenue Service (IRS) to maintain its tax-exempt status. 

Handling Form 990 effectively means gathering all your financial paperwork, keeping things clear and organized, and understanding what the IRS expects. This checklist helps guide you through the process, ensuring you accurately report your organization’s finances.

By doing this well, you not only meet tax requirements but also show transparency, building trust with everyone involved in your organization. So, it’s not just about paperwork; it’s about telling your financial story accurately and building confidence in your organization’s mission.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. . For comprehensive tax, legal or financial advice, always contact a qualified professional in your area. S’witty Kiwi assumes no liability for actions taken in reliance upon the information contained herein.

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