Key Employees and Independent Contractors in Tax-Exempt Organizations

When filing IRS Form 990 or Form 990-EZ, tax-exempt groups usually have to report compensation of officers, directors, trustees, key employees, highest compensated employees, and independent contractors in Part VII of the tax return.

This section of the 990 form may come across as a bit tricky because each exempt organization can have different variables regarding members and employees such as no compensation, members with multiple roles, small payment thresholds, or even no significant key employees.

However, the IRS requires some information about the people working within your organization. Here are a few pointers to use:

Highest Paid Officers & Key Employees
Regardless of whether your current officers, directors, or trustees receive compensation or not, you’re going to need to list them. You’re also required to list any current key employees that made at least $150,000 during the year and the current top five highest paid employees making over $100,000.

Important: Your highest compensated employees are those within your organization who do not hold any officer or key employee titles like Treasurer, Secretary, or Director.

In some cases, you may have to list former members if they were active during the filing year, but left before the year was complete. List former officers, key employees, or highly paid employees who made at least $100,000. You can report former directors and trustees that were making over $10,000.

Independent Contractors
If your organization contracted any outside workers, the IRS requires that you report independent contractors that received at least $100,000 in compensation for services. The amounts must be the gross payments which can include expenses and fees - even if you don't separately report the spending costs to your organization.

IRS Information Forms: W2 Online Filing and 1099 Online Filing is simple now with streamlined features from our sister site, ExpressIRSForms.com. You transmit information returns for your employees or contractors directly to the IRS quickly than paper filing. Select our Postal Mailing option to have copies automatically sent to your recipients.

Volunteers
With e-filing 990 forms, you only need to report the total number of volunteers - there’s no need for individual names or details. Under particular circumstances, you don’t have to report any compensation paid to volunteer officers, directors, or trustees - speak with a tax professional for more details.

List your organization’s employees quickly and easily with ExpressTaxExempt.com. If you have any questions about entering key members or contractors, call our U.S. - based support team at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or email us anytime with support@ExpressTaxExempt.com.

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4 Surprising Tax Tips for Nonprofits

Successfully running a nonprofit or charitable group comes with many responsibilities - not only with your organization’s mission and activities, but also all the requirements to remain compliant with the federal government.

You already know to file a tax report to the IRS every year. You know that failing to do so for three straight years can void your exemption status. You know what to look for and how to report it, but here are a few less known tax tips found online that can benefit your organization in various ways.

Deductions for Volunteers
A great incentive for attracting volunteers to your organization is the tax benefits they receive for their service. Inform your volunteers how they can deduct various travel expenses such as oil changes, fuel, and mileage. Flight costs, food, lodging, and just about any other out-of-pocket expenses required for your volunteers to complete their tasks are tax deductible.

Receipts for Charitable Donations
It may be difficult at first, but try to establish a habit of writing acknowledgments for each donation your organization receives - you can create something as simple as a receipt or a “Thank You” letter that contains the following:

• Donation amount
• Date the donation was received
• Proof or a reassure of exemption status
• A statement of exchange for the donation, if necessary

You might not be obligated to acknowledge every $5 or $10 that comes to your nonprofit, but you should properly recognize anything in the hundreds of dollars or more.

Detailed Financial Documents
You never want a situation in which the IRS has you audited. But if you are, be sure you can account for every donation, expense, and revenue. With the various tax software available, you can organize and have your information readily available for any scenario. Make a habit of documenting your financial reports as soon as you get them. At the very least, it makes your tax season less stressful.

Fundraising through Crowdfunding
Though crowdfunding is proving as a viable alternative to traditional fundraising, it’s still subject to customary tax laws regarding donations. But just like regular donations, you’ll report the same information about contributions from crowdfunding. Whatever crowdfunding platform you choose, you can track donors, their monetary amounts, and even set up rewards for each donation.

Just as each nonprofit is different from the next, so is the tax situation for each exempt organization. Check with a tax advisor for any other surprising tax advantages - and when you’re ready to e-file IRS Form 990/990-EZ come to ExpressTaxExempt.com. Our streamlined, cloud-based service asks interview-style questions which report your organization’s revenue, expenses, and other activities for the year - without the time-consuming hassles of paper filing.

Contact our U.S. - based, e-file professionals for any questions or assistance with our services. You can speak with us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or send a message to support@ExpressTaxExempt.com.

Related Blog: Start a Nonprofit in 3 Simple Steps 

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5 Key Points for a Nonprofit Community Impact Statement

When sharing the latest and greatest accomplishments of your nonprofit or charitable group, it’s typical of exempt organizations to issue a Community Impact Statement to donors, potential volunteers, and community leaders.

Your statement can include many facts that clearly demonstrates your organization’s outreach within the community. Here are five key points from the nonprofit industry you should include in your impact statement.

Hours from Volunteers
An important aspect of quantifying your organization’s community outreach is the monitoring, gauging, and distribution of volunteer hours. There are online tools available for organizations to quickly schedule and mark volunteers along with real-time reports on service hours. You could even find smartphone apps to pass along to your volunteers, which can allow them to follow and report hours on their own.

Products or Services Offered
Whatever work or items your organization provides to the community - showcase it! Based on your type of nonprofit or charity, show just how many homes built, school supplies distributed, parks cleaned, meals cooked, etc. Quantified numbers always help give a clear picture of your organization's activities.

Funds Raised
Nothing probably showcases community impact better than the contributions, gifts, and grants that your nonprofit draws in. While it proves how your organization supports its activities, it also shows a glimpse of the faith and dependability of your organization’s donor base.

Service Value
According to statistics, the dollar amount for volunteer service is $23.56 per hour. And last year, the national value of service from volunteers was an estimated $184 billion! Converting the time, skill, and talent of your volunteers into a monetary value can show how the community is financially benefiting from your organization.

Testimonials
For nonprofits and charities, a story about the lives changed and the benefits of your organization can inspire others to give or get involved. Share interviews from volunteers or community residents that you've helped. You can also implement quotes and stories on your organization’s website or promotional materials.

Other than publishing a Community Impact Statement, exempt organizations are required by the IRS to share information from annual tax returns with the public. With ExpressTaxExempt.com, you have instant access to a PDF copy of your transmitted IRS Form 990/990-EZ. You can print as many copies as needed or upload the PDF file to your organization’s website.

If you have any questions or issues with e-filing your tax return with our services, please contact our U.S. - based, customer support team at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. We’re also available via email with support@ExpressTaxExempt.com.

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4 Effective Blog Ideas for Nonprofits

There are many things you can do to increase community engagement with your nonprofit or charity. A least expensive and less time-consuming option is to create a weekly or bi-weekly blog.

Blogs are an excellent way to update donors, attract new contributors, and showcase your organization’s accomplishments all at once.

Blogs have the potential of reaching a larger audience than your regular lists of contact emails, but only if your blogs contain engaging and concise content. Here are four ideas for blogs from the Internet you can quickly use to increase your exempt organization’s outreach.

Stories from Communities
The most attractive thing your nonprofit or charity can do is display how it invokes positive change within the community. These stories can highlight how your organization meets community needs - you can interview a city leader, a donor, or a long-time resident. If possible, be sure to include photos and videos.

A Compilation Report
A small, summarized report can keep your audiences informed about the progress your organization makes - this can include statistics from donations, fundraising events, volunteers, or services. Feature about five stats from your organization’s activities and use one of those numbers each time you re-post the blog to your social media pages.

Important: A blog detailing a report should be brief and straight to the point. Keep it short to retain your audience’s attention - inform readers of only the significant numerical facts from your activities. Save the minuscule details for your major annual meetings.

Useful Resources or Advice
Your blogs should be able to connect with others outside your donor’s list - sharing tips and resources can put your brand in front of people who have never heard of you. For example, if your organization seeks the restoration and preservation of plant life, create a blog about building or maintaining a backyard garden. Or if your nonprofit is about art, point of some of the best art places in the community.

Behind the Scenes Coverage
Give your audiences an insightful look into the inner workings of your organization. You can significantly express the goals of your nonprofit, fundraising events, and other activities along with the people who help make it happen - use interviews or stories from staff, volunteers, or board members. Visuals are always important, so include various multimedia.

Whether these blogs bring in more contributions, volunteers, or even spark new ideas for fundraising events or program services, you’ll still need to report these changes to the IRS with your annual tax return. With ExpressTaxExempt.com, you can e-file your IRS Form 990/990-EZ a lot quicker than paper filing. Our service uses simple, interview-style questioning and cloud-based technology so you can access and complete your form on any computer.

Contact our U.S. - based support team for any questions or assistance with the e-filing process. You can reach us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or email us 24/7 with support@ExpressTaxExempt.com.

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Tax Tips for Nonprofit Volunteers

Volunteers are an indispensable aspect of any nonprofit organization or charity. They help complete the daily tasks required, which allows your organization to continue reaching its mission or goal.

Many of you may already have a process in place for recruiting volunteers - email blasts, social media, sign-up events, and others.

But the key to secure potential volunteers is transparency. From the start, let your prospects know what you’re aiming to achieve and how they can assist. Another way to entice is explaining the benefits of volunteering. One of the many incentives for people donating services are the tax deductions.

Here are a few tips and guidelines from the IRS about claiming credits from services to charity.

Qualified Organization
Before your volunteers can deduct any service costs, the nonprofit or charity must be officially recognized by the IRS as a Section 501(c)(3) exempt organization - this leads right back to being transparent with your potential helpers. You’re obligated to explain whether your nonprofit is officially tax-exempt, waiting on approval, or haven’t even registered. Church and government organizations are automatically qualified.

Out-of-Pocket Spending
Volunteers can deduct traveling costs necessary to donate their services. All costs must meet the following criteria for eligibility:

• Unreimbursed expenses
• Fees accrued due to given services
• No living, family, or personal expenses
• Costs directly related to donated services

Substantial & Authentic Work
Your volunteers must perform work that is “real and valuable” to the organization. Any travel expenses are ineligible for tax credits if the volunteer duties were minimal or have no impact or significant importance with your nonprofit or charity.

Value of Services & Time
According to the IRS, volunteers can’t deduct the value of their donated services - what this means is that they can’t claim what they would typically charge for a particular service. For example, let’s say a caterer volunteers to feed your fundraising event or gala - they’re ineligible to write-off the usual amount they would’ve charged to cater such an event; however, the cost of supplies, utilities, and travel for the event are approved deductions.

Claims on Travel Costs
Travel expenses that volunteers can deduct includes

• Car expenses
• Lodging costs
• Meal expenses
• Train, air, and bus transportation
• Other transportation costs needed for local travel

Check with your community’s tax professional or CPA about how you can further explain the tax incentives for nonprofit volunteers. And once you’ve got your volunteer situation complete, visit us at ExpressTaxExempt.com for all your federal e-filing needs.

With our services, you can e-file IRS Form 990-N (e-Postcard), 990-EZ, 990 (long), and Extension Form 8868 for an automatic, 3-month tax extension. Time is starting to wind down for those of you who extended your IRS deadline to November 15 - e-file right now with ExpressTaxExempt.com to avoid any late filing fees.

If you have any questions or need assistance with the e-filing process, our U.S. - based customer support is ready to help out. Call us at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST, or email us at your convenience with support@ExpressTaxExempt.com.

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Welcome to Volunteer Appreciation Month

Did you know that about 62.6 million people volunteered through or for an organization at least once between September 2014 and September 2015?

Did you also know that April is Volunteer Appreciation Month?

Good job, volunteers! Keep up the good work. And good job to our dedicated nonprofit and exempt organizations who reach out and organize their volunteers!

While volunteering differs depending on the organization, we offer our appreciation to all of you out there who have taken your time and money to better our world!

How Can You as an Exempt Organization Show Your Appreciation?

Well, communicate with your volunteer base! Send out an email or a social media message that conveys your appreciation.

If you’re already following our guide to email marketing, this should be easy for you.

Reach out to a Local Company as a Partner

Let’s be honest, there are many benefits for businesses when it comes to volunteering. They can market their products and services through events and increase their appeal to the community by helping out.

For Volunteer Month, team up with a local company that could offer your volunteer base some cool perks. This could range from free swag to discounts, depending on what the local business does.

Everyone Loves a Good Meal

It turns out collecting, preparing, distributing, and serving food were the activities volunteers performed the most in 2015. Around 11 percent of volunteers reported this as their main activity, with teaching, fundraising, and general labor following, respectively.

Show your volunteers you appreciate their efforts by throwing them an appreciation banquet, cookout, or even a pizza party!

On top of everything, these events are the perfect opportunity to reconnect with and learn more about your volunteers.

What Makes Volunteers Tick?

Appreciative emails and cookouts aside, April gives you the perfect chance to learn more about your volunteer base.

How? By surveying your base, you can find out why they volunteer, what works as a call to action, and how you can make the process easier for them.

Some people would rather donate canned goods or funds, and some would rather use their time doing hands-on activities to better the organization. Do you know which volunteers are which? This is the time for you to find out!

Of course, we would like to extend our appreciation to both volunteers and nonprofits out there! Without your dedication and philanthropy, the world would be a darker place.

Don’t forget, if you’re an exempt organization running on a calendar year, you have a deadline for your tax return on May 15th. Whether you’re e-filing Form 990-N or the 990 long, we’re here to answer any questions you may come across. Just reach out to us at 704.839.2321 or Support@ExpressTaxExempt.com.

How are you going to appreciate your volunteers this month? Let us know in the comments, or on Facebook and Twitter!

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The Volunteer Experience

For many nonprofit organizations, volunteers are an essential part of the day-to-day operations. In some ways, volunteers can prove to be just as vital as donors, if not more. You may have the resources to offer a service, but volunteers are your means of properly executing that service. Whether your nonprofit is small or large, any exempt organization can benefit from having volunteers. But are your volunteers benefiting from your organization?

Do your volunteers know what to do once they arrive to help? Are they showing up during a set schedule, or are they allowed to come and go? Do they regularly feel that there’s nothing to do, or are they unsure what to work on next? The experience your volunteers have with your organization can greatly impact future volunteering, monetary support, and even your nonprofit’s reputation.

Here are a few ways you can easily enhance the experience of your organization’s volunteers:

Organization Website
It all starts by getting volunteer information to those who are interested. As soon as a viewer enters your web page, they should be able to get that information effortlessly. Your volunteer registration form should ask the following information:

• Contact name/info
• Reason for volunteering
• Any physical constraints
• Education or special training
• Professional/volunteer experience
• Personal interest or hobbies

What may seem like extraneous information will actually help you give volunteers tasks based on their set of skills. When the volunteer is excited with what they’re doing, it’s more likely they’ll continue with their support. But signing up isn’t the only important thing. Make sure your website displays volunteering impact, available opportunities, coordinator contact info, guidelines, and release forms. Videos, photos, or testimonials from previous volunteers would be a nice touch as well.

Schedule, Communicate, & Prepare
After your volunteer has registered, communicate with them on a regular basis. They should know where to be, what to bring, and what to expect. You can personally ensure that your volunteers understand the guidelines, know their schedules, and are aware of their duties and responsibilities.

Volunteer Day (V-Day)
The most critical part of the entire experience - this should be no different than the first day of a new employee, board member, or important donor. Here a some suggested guidelines:

• Provide distinct instruction and expectation before volunteers arrive
• Have a leadership member greet volunteers and escort them to the volunteering area (room, section, hub, etc.)
• Have the volunteer coordinator share details of the organization - including the need for volunteers
• Demonstrate what volunteers will be doing over the course of their scheduled time
• Let volunteers work
• Allow the necessary work breaks
• Take a photo or video of volunteers working
• Allow the volunteers to mitigate back in the volunteer area
• Inquire about today’s experience, thank volunteers for their time, and let them leave

Recognition - The Follow-Up
Within 24 hours, you should follow up with your volunteers with either a “Thank You” call or email. Any photos or videos can be posted on social media along with public acknowledgement of the group and volunteer support. Even if you already asked, you may still want to inquire about their experience. Sending electronic surveys to your volunteers can provide feedback or insight.

Follow-ups can also be used to request donations. Studies have shown that volunteers give ten times more in donations than non-volunteers - a reason why your volunteer experience should be top-notch to begin with. Any volunteering program your organization has in place should be as crucial as bringing in new donors. Not only does it reflect upon your organization’s reputation, but those volunteers could become your next major donors. And while you’re focused on that, let us make filing your tax-exempt returns as easy as possible.

With ExpressTaxExempt, our built-in audit check scans your information entered for any possible errors that could cause a rejection - so you can transmit an accurate form the first time around. If your 990 form is still rejected, you can make corrections and re-transmit it at no extra charge.

Look no further for the most comprehensive help in the industry to assist with your e-filing process. Our live technical support team in Rock Hill, South Carolina is available for any questions or assistance with e-filing our tax-exempt forms. Contact us at (704) 839-2321, Monday through Friday from 9 a.m. to 6 p.m. EST. We also offer 24/7 support through email at support@expresstaxexempt.com.

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