Most nonprofit organizations are required to file an annual Form 990 with the IRS. This is an informational return that demonstrates how your organization is meeting its tax-exempt purpose. It also describes your financial operations, including how you raise and spend money. Your 990 is a public document that shapes how donors, grantors, and other stakeholders view your organization.
Very small nonprofits with gross receipts of $50,000 or less are eligible for the postcard-sized Form 990-N, which is very quick and easy to fill out. Even the Form 990-EZ – which is an option for organizations with less than $200,000 in gross receipts and less than $500,000 in total assets – can often be successfully prepared by a financially savvy treasurer, without professional assistance.
But once your organization exceeds that threshold, you must file the “full” Form 990. This detailed, multi-page document includes:
A summary of your financial activities
A narrative section describing your mission and programs
Information regarding your organization’s governance, management, and policies
Compensation disclosures
A detailed breakdown of all income sources, including contributions, program service fees, and investments
Categorization of all expenses into three distinct “functions” (program, management/general, and fundraising)
Financial reporting of your assets, liabilities, and net assets
It also includes several additional schedules that provide supplementary information about your organization’s contributions, financial statements, fundraising activities, and other operational details.
Unless your nonprofit is lucky enough to have an experienced accountant on your team, you will likely want professional assistance to prepare your Form 990. Most traditional accounting firms are capable of preparing Form 990, but they may not do it often enough to understand all of the nuances. If you need Form 990 filing help, seeking out a nonprofit tax specialist is the best choice to ensure your Form 990 is completed accurately, thoroughly, and on-time.
But how much does it cost to prepare Form 990? It depends on the size and complexity of your organization, as well as the quality of your accounting records and any other concurrent services. For example, you may get a discount by having your Form 990 prepared in conjunction with an audit, review, or compilation, since much of the information is similar.
Form 990 must be electronically filed with the IRS through an authorized e-file provider. Your 990 is due by the 15th day of the 5th month after your fiscal year ends, unless you request an extension. For example, if your fiscal year ends on December 31st, your Form 990 deadline is May 15th. Late filings are subject to penalties of $20-$120 per day.
Your Form 990 is far more than just paperwork. A nonprofit tax specialist can leverage your Form 990 into a valuable public relations tool and a storytelling opportunity. If your organization is looking for a CPA firm with decades of experience preparing Form 990, click here for an instant price quote or contact us for more information about nonprofit tax services from Altruic Advisors.
