Tax Extensions for Charities and Non-Profits

All tax-exempt organizations (as defined by the Internal Revenue Code) should be aware of the revised Tax Form 990 that is used to report activities to the IRS. This form was updated in 2008, for that tax year and beyond, and many new parts and attachments were added.

"When tax time rolls around in April," wrote the San Diego Union-Tribune in November 2008, "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."

For information regarding exempt organizations, see IRS Publication 557 (Tax-Exempt Status for Your Organization), IRS Publication 4221-NC (Compliance Guide for Tax-Exempt Organizations), and IRS Publication 5220 (Applying for 501(c)(3) Tax-Exempt Status).


What’s New about IRS Tax Form 990 (Return of Organization Exempt From Income Tax)?

Tax-Exempt organizations must use Form 990 to report their income and expenditures to the IRS. It’s important to note that Form 990 was recently redesigned for tax years 2008 and thereafter. The new version includes an eleven-page, eleven-part form which all organizations (considered exempt from income tax under the Internal Revenue Code) must complete. It also includes 16 schedules that must be filled-out by the organizations to which they apply.

Note that the new Form 990 goes beyond the traditional disclosures of salaries, donations, and operating expenses. It requires non-profits to explain their fundamental organizational structure, processing and management procedures for handling donations, and salary structures for top officials.

The new rules have gone into effect gradually, beginning in 2008, and based on income. Organizations that take in more than $1,000,000 per year (or hold assets of $2,500,000 or greater) must fill out the revised Tax Form 990 for tax years 2008 and thereafter. In 2009, the threshold decreases to $500,000 of income (or $1,250,000 in assets). In 2010, the thresholds drop to $200,000 of income (or $500,000 in assets).

For more information, see IRS Publication 4741 (The New Form 990: What Every Tax Exempt Organization Needs to Know).

The IRS is clearly taking a more active role in non-profit oversight, to ensure that the organizations in question are worthy of donations and of tax-exempt status.

So what does this mean for you ― the non-profit administrator, charity director, or finance manager?

It means that this year, you should consider getting a tax extension.


Requesting a Tax Extension

If you would like to obtain a tax extension from the IRS, you can do so in a few minutes with FileLater.com. The FileLater system provides online tax extension filing services for organizations of all types, from large corporations to small non-profits.

Remember that the new guidelines for the revised Tax Form 990 will require careful attention. It is not uncommon for non-profit groups to be busy and understaffed, and getting a tax extension can give you the time to ensure that your tax return is in full compliance.

File a business tax extension online now.