Question & Answer: Research the Form 990 for a not-for-profit organization. Describe at least three…..

Form 990 for a not-for-profit organization

IRS form 990 is a tax document that must be filed by the federally tax-exempt organizations. Hence specified not-for-profit organisation need to file IRS form 990. Main motive for filling this tax document it to provide some basic information so that IRS can judge the motive of that organisation.

These information are presented for donor and grants giver so that they can know about their given money, whether donation have used for the right purpose or not.

With the help of this form 990 IRS also checks the work procedure of not-for-profit organisation. This document also depicts the information about mission, programme and source & utilization of finance of these organisation.

IRS specified the list of organisation that need to file this tax document within specified time limit. Such organisation are as follow;

All private foundations

Tax-exempt organizations which falls within specified gross receipts limits.

Big size nonprofits which have gross receipts of more than $50,000 should file form 990 or 990-EZ.

Small size nonprofits which have gross receipts of $50,000 or lower than it should file form 990-N.

After from these organisation there is a big list of not-for-profit organisation and list of tax exempt organisation which need to file tax document 990 for maintain their status of tax exemption, if these organisation does not file tax document then tax relief will not be provided.

Difference between Form 990 and a corporate tax return

1. Form 990 must be filed by specified organisation that not liable to pay federal taxes whereas corporate tax return must be filed by the corporations that are liable to pay taxes and these corporations pay taxes through filing tax form 1120.

2. A corporation must file form 1120 by the 15th day of the 3rd month after closing of tax year of that corporation whereas a not-for-profit organisation must file form 990 by the 15th day of the 5^th month after closing of accounting year of that non-profit organisation.

3. For filling tax form 1120 a corporation most probably need help of a professional because this form 1120 is more complex in nature and required a lot of information & formalities whereas form for filling tax form 990 service of a tax professionals is not much necessary because this form is simple and basically filled as a formality.