What is a 990 Form?: A Nonprofit’s Guide

EO Determinations no longer issues letters confirming the tax-exempt status of organizations that report such new services or significant changes. All organizations filing Form 990 must complete Parts I through XII, Schedule O (Form 990), and any schedules for which a “Yes” response is indicated in Part IV. If an organization isn’t required to file Form 990 but chooses to do so, it must file a complete return and provide all of the information requested, including the required schedules. An organization doesn’t have to file Form 990 or 990-EZ even if it has at least $200,000 of gross receipts for the tax year or $500,000 of total assets at the end of the tax year if it is described below (except for section 509(a)(3) supporting organizations, which are described earlier).

• The following economic benefits are disregarded for purposes of section 4958.
• Consequently, until the IRS issues new regulations for this reserved section on revenue-sharing transactions, these transactions will be evaluated under the general rules (for example, the FMV standards) that apply to all contractual arrangements between applicable tax-exempt organizations and their disqualified persons.
• There is no requirement for nonprofits to show current assets or current liabilities so typically those are not identified.
• The organization’s records should be kept for as long as they may be needed for the administration of any provision of the Internal Revenue Code.
• The above doesn’t apply to distributions to any organization described in section 170(b)(1)(A) (other than a disqualified supporting organization, defined in section 4966(d)(4)), to the sponsoring organization of such donor advised fund, or to any other donor advised fund.

It’s a publicly available filing that the IRS uses to ensure you comply with the laws regulating your tax-exempt status. This is the first opportunity for the Organization to tell its story to those reading it. As the Best Accounting Software For Nonprofits 2023 is available for public inspection it is important for the 990 to be used as a marketing tool for the Organization rather than just a required form to be filed each year. We explain below the basic requirements for filing your nonprofit’s annual information return with the IRS, but you can also rely on excellent information from the IRS website itself. Here is an overview of the annual filing requirements; this IRS webpage explains which form to file, with links to the various forms. Nonprofit organizations are required to make their 990 and their exemption application available for public inspection without charge at their regional and district offices during regular business hours.

Specific Instructions

The amount reported in Part X, line 13, column (B), must equal the total of Schedule D (Form 990), Part VIII, column (b). If an amount is reported on this line that is 5% or more of the amount reported on Part X, line 16, answer “Yes” on Part IV, line 11b, and complete Schedule D (Form 990), Part VII. The amount reported in Part X, line 12, column (B), must equal the total of Schedule D (Form 990), Part VII, column (b). Enter amounts for supplies (office, classroom, or other supplies); telephone (cell phones and landlines) and facsimile; postage (overnight delivery, parcel delivery, trucking, and other delivery expenses) and mailing expenses; shipping materials; equipment rental; bank fees; and other similar costs.

• Report the net amount of all receivables due from officers, directors, trustees, or key employees on line 5.
• Every year, each subordinate organization must authorize the central organization in writing to include it in the group return and must declare, under penalties of perjury, that the authorization and the information it submits to be included in the group return are true and complete.
• Rent received from leased personal property is generally taxable except when leased with real property, and the rent attributable to the personal property doesn’t exceed 10% of the total rents from all leased property.
• If a charitable nonprofit fails to file its Form 990 on time and fails to show reasonable cause why it is late, there can be penalties.
• If the organization was excepted from filing Form 990 for the preceding year, enter amounts the organization would have entered in column (B) for that year.

As department chair, S supervises faculty in the department, approves the course curriculum, and oversees the operating budget for the department. The department represents less than 10% of the university’s activities, assets, income, expenses, capital expenditures, operating budget, and employee compensation. Under these facts and circumstances, S doesn’t meet the Responsibility Test and isn’t a key employee of T. Provide the name of the person who possesses the organization’s books and records, and the business address and telephone number of such person (or of the organization if the books and records are kept by such person at a personal residence). If the books and records are kept at more than one location, provide the name, business address, and telephone number of the person responsible for coordinating the maintenance of the books and records. The organization isn’t required to provide the address or telephone number of a personal residence of an individual.

Enter your details onto the form.

In the case of an applicable tax-exempt organization, any transaction in which an excess benefit is provided by the organization, directly or indirectly to, or for the use of, any disqualified person, as defined in section 4958. Excess benefit generally means the excess of the economic benefit received from the applicable organization over the consideration given (including services) by a disqualified person, but see the special rules below regarding donor advised funds and supporting organizations. Don’t check the “Former” box if the person was a current officer, director, or trustee at any time during the organization’s tax year, or a current key employee or among the five highest compensated employees for the calendar year ending with or within the organization’s tax year.

• Don’t report in Part IX expenses that must be reported on line 6b, 7b, 8b, 9b, or 10b in Part VIII.
• The central organization (parent organization) named in a group exemption letter is required to have general supervision or control over its subordinate organizations as a condition of the group exemption.
• Form 1099-NEC and/or Form 1099-MISC may be required to be issued for payments to an independent contractor, with compensation reported in box 1 of Form 1099-NEC and/or box 6 of Form 1099-MISC.
• Financial Accounting Standards Board, Accounting Standards Codification 958 (ASC 958) provides standards for external financial statements certified by an independent accountant for certain types of nonprofit organizations.
• If an amount is reported on this line, the organization must also answer “Yes” on Part IV, line 9, and complete Schedule D (Form 990), Part IV.

For additional details, always make sure to review the most current information on the IRS’s website. Kristin focuses on not-for-profit organizations and trade associations, as well as real estate and attest engagements under the Renewable Fuel Standard. Page 7 lists the Board of Directors, Officers, and certain compensated individuals of the Organization. This list should be all inclusive for anyone that s­­­erved on the Board or as an Officer at any point in time during the year. Page 2 of the Form reports on the mission and programs of the Organization for the year.

Information reported on Form 990

(See further explanation in the instructions for Part X, line 11; and Schedule M (Form 990), Noncash Contributions, line 9). Deferred compensation that is earned pursuant to a nonqualified plan or nongovernmental section 457 plan. https://quickbooks-payroll.org/bookkeeping-for-nonprofits-best-practices-tips/ Different rules can apply for purposes of identifying arrangements subject to sections 83, 409A, 457(f), and 3121(v). Earned but unpaid incentive compensation can be deferred pursuant to a nonqualified deferred compensation plan.

Enter the organization’s gross income from sales of inventory items, less returns and allowances. Sales of inventory items reportable on line 10a are sales of items that are donated to the organization, that the organization makes to sell to others, or that it buys for resale. Sales of inventory don’t, however, include the sale of goods related to a fundraising event, which must be reported on line 8.