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Nonprofit Tax Filing Requirements

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Most of you will already be familiar with the time frame for filing your organization’s non-profit returns with the IRS and the Franchise Tax Board.  These forms must be filed no later than the 15th day of the fifth month after the fiscal year end.  For example, if your entity’s fiscal year ends on December 31st, your filing is due on May 15th.  The filing requirements have changed over the past few years, and the filing requirements are different for the IRS than they are for the Franchise Tax Board.  For 2012, the filing requirements are as follows:

IRS Requirements

Form to File
If your gross receipts are:
990-N 
Normally equal to or less than $50,000
990-EZ
Normally less than $200,000 and total assets are less than $500,000
990
Equal to or more than $200,000 or more and total assets are equal to or more than $500,000

FTB Requirements

Form to File
If your gross receipts are:
199-N
Normally equal to or less than $25,000
199
Normally greater than $25,000

All non-profit organizations must file one of the above returns.  If you qualify to file forms 990-N and 199-N, these are postcard filings that can be done very easily online.  If you need more information you can check the IRS or Franchise Tax Board websites, or contact your tax preparer.

Speak and Be Spoke(n)!

So, tell us!  Do you have any lessons learned to share with your fellow nonprofits regarding tax filing requirements?

Nonprofit Property Tax Filing Requirements

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It’s never too early to start planning for the next tax season. Why? California law will prescribe a yearly tax on your organization based on property as it exists at 12:01 a.m. on January 1st.  All entities, unless granted an exemption by the County Assessor’s Office, are required to file the annual property tax form “Form 571-L Business Property Statement” with the County Assessor’s Office.  This form is due every year on April 1st but is still considered to be timely filed if sent by May 7.  On the Form 571-L, entities are required to declare all business property owned as of January 1.  Examples of business property include supplies, equipment, buildings, building improvements, etc.

Nonprofits are required to file the Form 571-L until the Assessor’s Office has specifically granted them an exemption.  In order to qualify for an exemption from the Assessor’s Office, the entity must submit the appropriate documents to the assessor’s office (i.e. exemption claim form, articles of incorporation, tax letter designating the organization’s non-profit status, etc).  This is a one-time process to be granted with the exemption.

Once the assessor determines that the nonprofit organization is a qualifying religious, church and/or welfare organization and is eligible for an exemption, there is a simplified annual filing process in which the entity will be assessed with a zero tax bill.  The annual filing due date for this type of filing is February 15th. If you have any questions you can call the Transfer Exemption department of the Assessor’s office at (805) 781-5643.

Speak and Be Spoke(n)!

So, tell us!  Do you have any tips to share with your fellow nonprofits regarding how to file for property tax requirements?

Take Part to Preserve Charitable Tax Deduction

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At Spokes, we often talk about the various management spokes (financial, development, human resources, etc) or constituent spokes (donor, volunteer, employee, client) needed to help nonprofits achieve their missions.  There is a third set of spokes that is equally critical – the partnership between the government, for-profit and nonprofit sectors.

The U.S. nonprofit sector exists because there are programs and services needed throughout our communities from which no profit can be made and are too localized and specific for the government to manage.  The for-profit sector exists to help drive our nation’s economy.  The government sector, or for-public sector, exists to support our legal, education and safety systems.  And, the non-profit sector, or for-impact sector, exists to improve the quality of life for all Americans and, especially, those who fall between the cracks of the for-profit and for-public sector efforts.  Each sector is equally benefitted and dependent by the other two and we nonprofit leaders have an important role to play in balancing this unique ecosystem.

As you may have heard, Congress is considering placing limitations of charitable tax deductions to solve our national budget crisis.  These changes threaten to create significant collateral damage to the nonprofit sectors and the health of the communities we seek to sustain.  By definition, all non-profits are dependent on some level of charitable support from private donors.  Often, those donors are employees of the for-profit sector.  And, nonprofits are dependent on the government to offer incentives to those individual donors to provide the financial resources we need to do our work.  Reduced donations will lead to fewer programs and services and, ultimately, to many more unaddressed issues in our communities.

As the recent recession has driven an increased demand for most nonprofit services, can our nation afford to take this risk?  Do you want to live in a community with depleted or no nonprofits?  What about your corporation’s employees?  Can the government pick up the services the nonprofit sector will need to drop?

If you don’t think so, I encourage you to join me in being outSpoken and participate in the United Way’s letter writing campaign to Congress.

More information can be found at http://www.capwiz.com/unitedway/issues/alert/?alertid=55024501.

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