Most donors want to see that at least 75% of your expenses are used to fund program services. If you’re not at 75% (or very close, you should understand why and be prepared to explain your reasons to potential funding sources. Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. A “quid pro quo contribution” is a payment that is made both as a contribution and as a payment for goods or services provided by the donee organization. If you have questions about a tax issue, need help preparing your tax return, or want to download free publications, forms, or instructions, go to IRS.gov and find resources that can help you right away.
Return of Organization Exempt From Income Tax – Notices
Also include Internet site link costs, signage costs, and advertising costs for the organization’s in-house fundraising campaigns. Include fees paid to independent contractors for advertising, except for fees paid to independent contractors for conducting professional fundraising services or campaigns, which are reported on line 11e. Enter amounts paid for professional fundraising services, including solicitation campaigns and advice or other consulting services supporting in-house fundraising campaigns. If the organization is unable to distinguish how to read a 990 between these amounts, it should report all such fees and amounts on line 11e. If the organization is unable to distinguish between service fees and expense payments or reimbursements, report all such amounts on line 11. Enter contributions by the filing organization, common paymasters, and payroll/reporting agents to the filing organization’s employee benefit programs (such as insurance, health, and welfare programs that aren’t an incidental part of a pension plan included on line 8), and the cost of other employee benefits.
- Payments under a compensation arrangement are presumed to be reasonable and the transfer of property (or right to use property) is presumed to be at FMV if the following three conditions are met.
- The additional information doesn’t have to be submitted with the Form 990 or 990-EZ filed with the IRS.
- The amounts reported on line 12 in columns (B), (C), and (D), plus the amount reported on line 1h, should equal line 12, column (A).
- Answer lines 10a and 10b only if the organization is exempt under section 501(c)(7).
- Political organizations described in section 527 aren’t required to answer this question.
How Socially Responsible Companies Drive Online Fundraising for Social Causes
- Although we can’t respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications.
- A trust is domestic if a court within the United States or a U.S. territory is able to exercise primary supervision over the administration of the trust, and one or more U.S. persons (or persons in territories of the United States) have the authority to control all substantial decisions of the trust.
- The organization maintains its books on the cash receipts and disbursements method of accounting but prepares a Form 990-EZ return for the state based on the accrual method.
- Report the net amount of all receivables due from officers, directors, trustees, or key employees on line 5.
One or more persons control a trust if they own more than 50% of the beneficial interests in the trust. A person’s beneficial interest in a trust shall be determined in proportion to that person’s actuarial interest in the trust as of the end of the tax year. If the organization operated one or more hospital facilities during the tax year, it must complete and file Form 990 and Schedule H (Form 990) and not Form 990-EZ. Section 501(c)(3) organizations must disclose any excise tax imposed during the year under section 4911 (excess lobbying expenditures); 4912 (disqualifying lobbying expenditures); or, unless abated, 4955 (political expenditures). A section 501(c)(3) organization will lose its tax-exempt status if it engages in political activity.
- Donors may also stipulate that assets, such as land or works of art, be used for a specified purpose, be preserved, and not be sold or donated with stipulations that they be invested to provide a permanent source of income.
- For reporting sales of securities on Form 990-EZ, the organization can use the more convenient way to figure the organization’s gain or loss from sales of securities by subtracting from the sales price the average-cost basis of the particular security sold.
- Report retained earnings, endowment, accumulated income, or other funds on line 31.
- For example, amounts paid to an independent contractor for advocacy services that don’t constitute lobbying should be reported here.
- If the payment resulting from the return of the property exceeds the correction amount described earlier, the organization can make a cash payment to the disqualified person equal to the difference.
Know where the money goes: How to read a non-profit’s I-990 form
If the organization transmits any of these forms electronically, add this number to the total reported. Examples of payments requiring Form 1099 reporting include certain payments to independent contractors for services rendered. Report on this line Forms 1099, 1098, 5498, and W-2G filed by reporting agents of the filing organization, including common paymasters and payroll agents, for the calendar year ending with or within the organization’s tax year.
Instructions for Form 990-EZ – Additional Material
Enter amounts for other independent contractor services not listed on lines 11a through 11f. For example, amounts paid to an independent contractor for advocacy services that don’t constitute lobbying should be reported here. For health care organizations, payments to health care professionals who are independent contractors are reported on line 11g. Report on line 11g payments to payroll agents, common paymasters, and other third parties for services provided by those third parties to the filing organization. Report on lines 5–10, as appropriate, payments that reimburse third parties for compensation to the organization’s officers, directors, trustees, key employees, or other employees. Report payments to contractors for information technology services on line 14, rather than on line 11g.
tax software survey
The following items of compensation provided by the filing organization and related organizations must be reported as “other compensation” in column (F) in all cases regardless of the amount, to the extent they aren’t included in column (D). For certain kinds of employees and for retirees, the amount in box 5 of Form W-2 can be zero or less than the amount in box 1 of Form W-2. For instance, recipients of disability pay, certain members of the clergy, and religious workers who aren’t subject to social security and Medicare taxes as employees can receive compensation that isn’t reported in box 5.
- If the organization isn’t required to file a Form 990-T for the tax year, enter “0.” If the organization hasn’t yet filed Form 990-T for the tax year, provide an estimate of the amount it expects to report on Form 990-T, Part I, line 11, when it is filed.
- Include here such expenses as penalties, fines, and judgments; unrelated business income taxes; insurance, interest, depreciation, and real estate taxes not reported as occupancy expenses; travel and transportation costs; and expenses for conferences, conventions, and meetings.
- To make comparative analyses, financial services firms that assist grantmakers are often interested in fees paid to outside contractors.
- A tax-exempt organization must fulfill a request for a copy of the organization’s entire application for tax exemption or annual information return or any specific part or schedule of its application or return.
- Ownership includes indirect ownership (for example, ownership in an entity that has ownership in the entity in question); there may be ownership through multiple tiers of entities.