Charitable or private foundation
Form 990 – Schedule A and large donor contributions are used to determine whether your organizations maintains its 501c3 charitable organization status or whether your organization should be reclassified as a private foundation. And note, a 501c3 charitable organization provides your donors with a bigger tax advantage than a private foundation. Schedule A and large donor disclosure is required for all 501c3 charitable organizations which complete the form 990 or form 990EZ.
Any individual or entity who makes a contribution (cash or in-kind donations) to your organization greater than $5,000 may be considered a large donor. When your organization has large donors, it is very important that this large donor information be included on Schedule A of the form 990 correctly as this affects the public support calculations. Once again, this is the determining factor in whether your organization is considered a 501c3 public charity or private foundation.
Other Key Items on the Form 990
Board of Directors. Always update your board of director and officer information as the IRS and potential donors want to know who is managing the organization.
Salaries, loans and other financial transactions to or from the board of directors / officers. The IRS is always interested in personal inurement as it relates to a 501c3 organization. Personal inurement is basically personal financial gain that a board member or officer receives from the organization. The IRS requires your organization to disclose financial transactions between the organization and the organization’s board / officers. You must disclose loans to or from the organization, salaries paid to the officers and board, etc.
Noncash donations. On the form 990, you must disclose separately the noncash donations received by your organization. This is important as your donors are putting these donations on their personal tax returns for tax deductions.
501c3 status pending. Whether or not your organization’s 501c3 status has been approved by the IRS does not determine whether or not you need to file a form 990. If your organization was incorporated in the year of 2014, then you must prepare and file a form 990 (with a pending 501c3 status) for the year 2014 and that form 990 must be filed by May 15, 2015 (assuming you have a December 31 fiscal year end).
Remember, 501c3 and other nonprofit organizations are required to file their form 990 by the 15th day of 5th month after their fiscal year end. Most organizations have a fiscal year end of December 31, which corresponds to the calendar year end. Thus, most 501c3 organizations are required to file their form 990 by May 15 of each year.
Floyd Green CPA PC can prepare your Form 990 for your 501c3 organization. If you would like more information on our 990 services, just call 877-457-2550 or email us at email@example.com