Setting up and maintaining a non-profit organization’s tax-exempt status can be difficult and time-consuming. Saga Taxes can handle all the appropriate IRS reporting for you.
What the IRS Requires from Non-Profits
Each year, the IRS requires most tax-exempt organizations to submit a Form 990 and the following supporting items:
- An Income Statement with highly specific revenue and expense categories like donations, salaries, postage, and rent
- A Balance Sheet with specific categories like cash, accounts receivable, and accounts payable
- A Functional Expense Statement listing expenses allocated to program services, fundraising, and operations
- An Individual Program Expense Statement that reports expenses for all programs and services like seminars or educational mailings
- Revenue Support Schedules that detail income sources in specific categories like charitable donations, membership fees, and investment income
Because the IRS uses these very specific revenue and expense classifications to determine if your organization will retain its tax-exempt status, it is essential to maintain proper accounting around these classifications.
How We Help you Set Up or Maintain your Non-Profit Status
We will:
- Review and compile your financial statements
- Design, install, and maintain your accounting system
- Prepare payroll on a weekly, bi-weekly, or monthly basis
- Prepare payroll tax and deposits
- Train your accounting personnel
- Complete and file your non-profit status application
- Train your board in non-profit financial statement usage and effective budgeting practices
- Prepare and file the 990 and 990T tax forms
- Prepare your initial start-up documentation, including articles of incorporation, federal employee identification number (FEIN), and payroll setup with federal and state agencies
- For churches, we prepare pastoral housing allowance and other required benefit documentation to meet the complex dual status of ministers
- We can also help new not-for-profit organizations prepare the 501 (c)(3) application for tax-exempt status.
What You Need to Provide to Set Up or Maintain Non-Profit Status
- Articles of Incorporation that contain the Exempt Purpose Statement as described in IRS Code section 501(c)(3) and defined in Treasury Regulation 1.501(c)(3)-1 Paragraph d and the Dissolution Statement described in Treasury Regulation 1.501(c)(3)-1 Paragraph b subparagraph 4 (“Organizational Test”)
- Employer Identification Number
- By-laws of the organization
- Board meeting minutes
- Names, addresses, and resumes of board members
- Names and addresses of all active members
- Inventory of assets like cash, furniture, equipment, property, and pledges
- Inventory of liabilities like mortgages, accounts payable, and loans
- Rent/Lease agreements and contracts
- Revenue and expense statements for the previous four years or as far back as possible if your organization has been in existence for less than four years
- Written reason for formation
- History of the organization
- Mission Statement or Statement of Faith or Beliefs (for churches and other religious organizations)
- Organization activities, operations, and programs documentation including statement of purpose and operations, food programs, fundraisers, flyers/brochures/pamphlets
- Financial support documentation including all sources of revenue such as contributions, tithes, offerings, and fundraisers
- Fund raising program descriptions
- IRS processing/filing fee
We are happy to help your organization prepare any of these items.
If you need help setting up your non-profit status, filing your 990 and 990T tax forms, or preparing information to maintain your tax-exempt status, contact us for a free consultation.