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Tax Extensions for Nonprofits: Beware the New Form 990 |
This year, the IRS has instituted stringent new reporting requirements for nonprofit organizations. The IRS Form 990, which details the income and expenditures for nonprofits, has been considerably broadened and will require a lot more time and effort for all organizations to comply.
"When tax time rolls around in April," wrote the San Diego Union-Tribune in November, "many charities will have to file a revised Internal Revenue Service Form 990 that is broader and more detailed than anything required in the past."
What does that mean for you, the nonprofit director, controller or all-around finance person?
It means that this year, a tax extension is a good idea.
FileLater offers online tax extension filing services for organizations of all kinds, from corporations to small not-for-profits. The complex requirements of the new Form 990 demand careful attention. It's not uncommon for nonprofits to be busy and understaffed--so take the time to make sure your tax return is in full compliance this year.
The new form goes beyond the traditional disclosures of salaries, donations and operating expenses. It requires nonprofits to elucidate their fundamental organizational structure, their processing and management procedures for handling donations, and their salary structures for top officials.
The IRS is clearly taking a more active role in nonprofit oversight, to ensure that the organizations in question are worthy of donations and of tax-exempt status.
The new rules go into effect gradually, based on income. Organizations that take in more than $1 million per year (or hold assets of $2.5 million or above) must fill out the revised form 990 for their 2008 taxes. In 2009, the threshold goes down to $500,000 income/$1.25 million in assets, and in 2010 it drops to $200,000/$500,000.
Start practicing now. File a business tax extension online in just minutes with FileLater.
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FileLater provides a secure online solution for individuals and businesses seeking to e-file an IRS income tax extension. FileLater is an authorized IRS e-file