If you are a small non-profit business, you may be surprised to learn that you will need to file an ‘e-postcard’; most known as the IRS Form 990-N. Most if not all small nonprofits often do not realize that if they fail to file they will immediately lost their tax-exempt status and furthermore, those who donate will not be able to make a claim for a tax deduction for their donations. This form is used to make the operations of nonprofits easier for those her operate them and much more; continue reading for more information.
Who Must File Form 990-N?
All nonprofits that make a gross in receipts of no more than $25,000 or under are required to file a Form 990-N; this was put into effect in 2007’s tax year. From 2007’s tax year and until 2010’s tax year, your receipts were to satisfy the requirements for the average $25,000 or under during the last 3 tax years; including the year that the return will be filed. In 2010’s tax year, there was a change made. This change that took place was with the $25,000 threshold for filing; this meant that the $25,000 went up to $50,000 making it so that more small nonprofits could become eligible to file the e-postcards in 2011’s tax year.
How should a Form 990-N be Filed?
The process for filing a Form 990-N is so easy that the IRS does not really consider it to be a tax return like some might believe it to be; it literally takes you no time at all to complete, maybe 15 minutes to be exact. The Form 990-N is found and filed online via a website that is operated by the Urban Institute, which is a large nonprofit that has been helping all of the nonprofit community to be IRS compliant for a number of years. Once you have completed the form, you can send it electronically.
What if a Form 990-N is not Filed?
The IRS is really serious about having everyone follow and file anything for tax purposes; especially when it comes to getting the small nonprofits to file a Form 990-N. In the event that you do not file this form for even a single year, the IRS will send you a reminder notice. However, should you fail to file a Form 990-N year after year; things will get tougher and tougher just to get back into good standing overall. If a nonprofit is required to file Form 990-N and fails to do so after 3 consecutive tax years, the nonprofit will immediately lose its ability to be legally tax-exempt on the filing due date of the third year.
Should your nonprofit lose its tax-exempt status, you will be required to re-apply for a federal tax exemption again. What does this mean? In short, it means filing an IRS Form 1023 again as well as paying for the large filing fee.
Over the years, several nonprofits have been affected by this new Form 990-N filing requirement are no longer open for business and thousands of active nonprofits will face losing their tax exemptions by not adhering to the new filing rules. It is because of this that you want to make 100% sure that your nonprofit will not be one of those that unfortunately experienced such a loss. Get in touch with Etax990n.com to file your non profit tax.