Introduction to Form 990 Filing
The IRS requires most tax-exempt organizations to file an annual information return, known as Form 990. This form provides the public with financial information about the organization, as well as its governance, compliance, and activities. The filing deadline for Form 990 varies depending on the organization's tax year and the date of its annual financial report.
Nonprofits with a calendar tax year, which ends on December 31, must file Form 990 by May 15th of each year. However, organizations with a fiscal tax year, which ends on a date other than December 31, must file Form 990 by the 15th day of the fifth month after the end of their tax year.
Understanding the Different Types of Form 990
There are different types of Form 990, including Form 990, Form 990-EZ, and Form 990-N. The type of form an organization must file depends on its annual gross receipts and total assets. Form 990 is the standard form, while Form 990-EZ is a simplified version for smaller organizations with annual gross receipts of $200,000 or less and total assets of $500,000 or less.
Form 990-N, also known as the e-Postcard, is a brief electronic form for small tax-exempt organizations with annual gross receipts of $50,000 or less. These organizations are not required to file a full Form 990 but must still submit the e-Postcard to maintain their tax-exempt status.
Consequences of Missing the Filing Deadline
Missing the filing deadline for Form 990 can result in penalties and fines for the nonprofit organization. The IRS may impose a penalty of $20 per day for each day the return is late, up to a maximum of $10,000 or 5% of the organization's gross receipts, whichever is less.
In addition to penalties, failure to file Form 990 for three consecutive years can result in the automatic revocation of the organization's tax-exempt status. This can have serious consequences, including the loss of tax-exempt status and the inability to receive tax-deductible donations.
Extension of Time to File Form 990
If a nonprofit organization is unable to file Form 990 by the deadline, it can request an automatic six-month extension of time to file. This extension is granted automatically, and the organization does not need to provide a reason for the request.
To request an extension, the organization must file Form 8868, Application for Automatic Extension of Time to File an Exempt Organization Return, by the original filing deadline. This will give the organization an additional six months to file its Form 990.
Best Practices for Filing Form 990
To ensure compliance and avoid penalties, nonprofit organizations should establish a routine for filing Form 990. This includes maintaining accurate and detailed financial records, as well as staying up-to-date on any changes to the form or filing requirements.
Organizations should also consider seeking the advice of a tax professional or attorney to ensure they are meeting all the requirements for filing Form 990. This can help prevent errors and ensure that the organization is taking advantage of all the deductions and credits available to it.
Frequently Asked Questions
What is the purpose of Form 990?
Form 990 is an annual information return that provides the public with financial information about a tax-exempt organization, as well as its governance, compliance, and activities.
Who must file Form 990?
Most tax-exempt organizations, including charities, foundations, and other nonprofit groups, must file Form 990 annually.
What is the deadline for filing Form 990?
The deadline for filing Form 990 varies depending on the organization's tax year and the date of its annual financial report, but is typically May 15th for calendar-year organizations.
Can I request an extension of time to file Form 990?
Yes, organizations can request an automatic six-month extension of time to file Form 990 by filing Form 8868 by the original filing deadline.
What are the consequences of missing the filing deadline?
Missing the filing deadline can result in penalties and fines, as well as the automatic revocation of the organization's tax-exempt status if the return is not filed for three consecutive years.
How do I file Form 990?
Form 990 can be filed electronically through the IRS website or by mailing a paper copy to the IRS. Organizations can also use tax preparation software to prepare and file the form.