IRS 990
There is a common misconception among most people with regard to nonprofits. Many assume that all nonprofits are automatically tax exempt as they never earn any profits and are concentrated on providing services and charity.
Nowadays, most of the nonprofits are classified as both a tax exempt entity as well as a nonprofit corporation. So, a nonprofit status relates to the state-law while tax exempt status refers to the federal and state tax exemption under the IRS tax regulations.
Meaning Of Tax Exempt
Tax exempt status means an organization which is exempted from paying any kind of taxes. So, a tax exempt status received from the IRS exempts a nonprofit organization from making payments for corporate federal income on the incomes generated from various activities which are related to the purpose of the group. But tax exempt firms are still responsible for paying federal payroll taxes like medicare, social security, unemployment, etc; real estate taxes, unemployment taxes, sales and use taxes, personal property taxes, franchise taxes, and others.
Form 1023-EZ
The 1023-EZ form is used for streamlining the process of seeking 501(c)(3) status. It is exclusively designed for certain small nonprofit firms. It is easily suitable for those nonprofits who have a clear and defined charitable purpose (i.e a new nonprofit start-up) and anticipates to get the most of its income generated from various donations and programs.
Criteria Needed For Applying Federal Tax Exempt Status
Keep in mind that not all nonprofit organizations can qualify to use Form 1023-EZ. There is a strict limitation created by the IRS as both the purpose and size of the nonprofits can be easily used for streamlining the process. Of course, there are various organizations qualifying for this faster path, but many won’t be successful. One of the major criteria is that the organization must be small and have the following rules -
- Should anticipate less than $50,000 in the gross receipts for a year, especially for the first three years.
- Must already have total assets valued at about less than $250,000
Can Organization File Form 1023-EZ For The Private Foundation Status?
Yes, organizations can file form 1023-EZ when they are looking for any kind of private foundation if they are able to achieve other eligible criteria. The only exception is if you are looking for private operating foundation status.
What Is Form 990-EZ?
Like most of the Nonprofit tax returns, Form 990-EZ is the short form of the annual information return of exempt organizations and this includes the political organizations too.
It is mandatory for the tax exempt political organizations whose annual gross receipts are $25,000 must file form 990-EZ especially for the one who hasn’t exceeded the thresholds for the total gross receipts received during the year and the total assets at the end of the year will have to file Form 990-EZ rather than Form 990.
Difference Between 990-N & 990-EZ
Now you might find it complicate while deciding what kind of annual returns to file at the end of the year, but it isn’t. All you need to consider is your organization’s financial activities. The basic difference between Form 990-N and Nonprofit tax return Form 990-EZ is that 990-N is an eight-question electronic return which must be filed by non-profits who gross receipts are equal to or less than $50,000.
While 990-EZ is nothing but a short form which non-profit organization must file if their gross receipts are less than about $200,000 & total assets less than $500,000.
Due Date To File 990-EZ
Similar to all the versions of 990, Form 990-EZ (Short form) is due on the 15th day of the 5th month after the end of a fiscal year. You can file the paper version and send it by mail or opt for electronically filing with the IRS.
Filing 990-EZ Form
Another best part of using IRS authorized tax e-filers like irs990ez.org is that you can file Form 990-EZ easily with our interview style filing process. With irs990ez.org, you can securely e-file 990-EZ for current (2023) & prior tax years (2022, 2021). Form 990-EZ requires additional information forms called Schedules filed along with the each 990-EZ return. Form 990-EZ Schedules are auto generated and for FREE with our e-filing software.
Also, you can file Form 8868 extension form for getting a six-month extension by the original due date of the return.
Status Of Form 990-EZ
You can easily check the status of your Form 990-EZ filed using irs990ez.org. All you need to do is login to the application or you will receive an email as soon as the IRS accepts or rejects your 990-EZ form.
Correcting Form 990-EZ
Now using the awesome tool irs990ez.org you can file the amended return of your Form 990-EZ for changing or adding the information reported on the previously filed return. Here from the date when the original return was due or from the date of filing, the organization needs to make the amended return available at least for the next three years.
Applying Reinstatement After Revocation Using Form 1023-EZ
In certain cases you can use the Form 1023-EZ to apply for reinstatement after getting the tax exempt status revoked. Frankly, organizations who have applied or planning to apply for reinstatement must consult with the IRS Revenue Procedure 2014-11 to check whether they are eligible to file using Form 1023-EZ. This is especially for organizations who are qualified to apply for reinstatement under Section 4 or 7 of this revenue procedure.
So go ahead and check out how irs990ez.org simplifies your Nonprofit tax filing