What Is Form 990: Return o🦋f Organization Exempt From Income Tax?

Even organizations exempt from paying federal income tax must report their activities annually to the Internal Revenue Service (IRS). This requirement is outlined in the 澳洲幸运5官方开奖结果体彩网:Internal Revenue Code (IRC). Certain tax-exempt organizations are required to use Form 990: Return of Organization Exempt From Income Tax to fulfill their annual reporting obligations.

Organizations that use Form 990 are exempt under the tax categories specified in Section 501(c), Section 527, and Section 4947(a) of the IRC. These organizations are often classified by the IRS as charitable organizations, political organizations, or nonexempt charitable trusts. 澳洲幸运5官方开奖结果体彩网:Private foundations, however, are not required to file Form 990 because they have their own annual filing requirement: Form 990-PF.

Form 990 must be filed by an exempt organization, even if it has not yet filed Form 1023 with the IRS to receive official approval of its tax-exempt status. However, there are certain organizations that are exempt from filing the form. Unlike 澳洲幸运5官方开奖结果体彩网:income tax returns that are private, this form is open to public inspection.

How to Read Form 990

Form 990 provides the government and the public with an overview of an organization’s activities for the year. Donors may use Form 990 to assess an organization’s 澳洲幸运5官方开奖结果体彩网:financial health and governance before contributing. The IRS requires extensive information from each organization, and the instructions for completing the form span 100 pages. Additionally, organizations may face significant penalties for failing to file on time.

Form 990 consists of 12 different parts:

• Part I: Provides an overview of the organization, including its mission, governance, revenues, expenses, and net assets.
• Part II: The signature block, where an officer of the organization affirms the information provided under penalty of perjury.
• Part III: A statement of the organization’s accomplishments, including its 澳洲幸运5官方开奖结果体彩网:mission statement, details on the three largest program services and related revenues and expenses.
• Part IV: A checklist of schedules that must accompany the form.
• Part V: Addresses IRS filings and tax compliance issues (e.g., whether tax-deductible contributions were substantiated).
• Part VI: Information on the governing body, management, and organizational policies.
• Part VII: Lists compensation paid to officers, directors, key employees, employees receiving more than $100,000 in compensation, and up to five 澳洲幸运5官方开奖结果体彩网:independent contractors receiving more than $100,000 in payment from the organization.
• Part VIII: Reports revenue from related or exempt funds, and 澳洲幸运5官方开奖结果体彩网:unrelated business income(reported on Form 990-T).
• Part IX: i Details the organization’s expenses.
• Part X: The organization’s 澳洲幸运5官方开奖结果体彩网:balance sheet.
• Part XI: Reconciliation of the organization’s net assets.
• Part XII: Explains the organization's financial reporting method (e.g., cash or accrual) and whether an independent accountant compiled and reviewed the financial statements.

In addition to the form, the organizationไ may be required to attach various schedules (A through O and R) to provide further details. The organization can determine the schedules they are required to use based on answers to questions throughout the form. One of the most commonly used schedules that organizations use to provide supplemental information to Form 990 is .

All pages of Form 990 are available .

Special Considerations When Filing Form 990

Instead of filing the full Form 990, some organizations may qualify for a simplified version known as Form 990-EZ: Short Form Return of Organization Exempt from Income Tax. This four-page form is available to organizations with gross receipts under $200,000 and total assets under $500,000 at the end of their tax year. Like Form 990, Form 990-EZ is also publicly accessible.

The Bottom Line

Organizations req🔥uired to file Form 990 are tax-exempt, but their financial activities are subject to detailed scrutiny by the IRS and the public. Form 990 offers transparency by requiring organizations to disclose a wealth of information about their operations, finances, and governance. Given the comple🐻xity of the form, many organizations seek assistance from tax professionals with expertise in nonprofit tax law.