#GivingTuesday - Making a Difference One Donation at a Time

Today, we recognize #GivingTuesday, a social movement which encourages others to give back by donating time, money or positive influence to a worthy cause that makes a difference. Generous efforts such as donating blood, providing financial support to a local organization, visiting a nursing home, or even helping out at a soup kitchen can touch the lives of many.

Even large organizations such as PayPal have “seized the season” and partnered with its users to celebrate the #GivingTuesday initiative, adding 1% of all donations made through their portal from now until the end of the year.

Since we’re talking about donating to charity, we’d love for you to share with us ways that you will donate! Are you a part of a charity or nonprofit organization who could use some donations to support the mission of the organization? If so, post the group name and information in the comments so other readers can donate!

For tax-exempt organizations, donations are a major component to its success and level of outreach. Thankfully, taxpayers have the ability to maximize their tax savings before the end of the year by giving to a charity and deducting it on their annual federal income tax return.

#GivingTuesday Tax Filing Reminders

With #GivingTuesday being an annual event, there are some reminders that taxpayers should be reminded of as they give money or good to an exempt charity or organization before December 31.

Donations to Eligible Organizations (Only) are Tax-Deductible

Churches, synagogues, temples, mosques, and government agencies are eligible to receive deductible donations. For a complete list of eligible organizations, click here.

Itemize to Claim Charitable Donations

Charitable deductions cannot be made if an individual chooses the standard deduction. Taxpayers must itemize their donations on Form 1040 Schedule A to claim deductions for charitable contributions.

Have Proof of Monetary Donations

Upon making a donation, be sure to receive a bank record or a written statement from the charity/organization to prove the amount and date given. Taxpayers using payroll deductions should retain a pay stub, a Form W-2 wage statement or other proof showing the total amount withheld for charity, along with the pledge card showing the name of the charity.

Donating Property

Donating items such as clothing and other household items come with a deduction amount that is normally limited to the fair market value of the item. These types of items must be in good or better condition to be considered tax-deductible.

Similar to monetary donations, those that donate property must get a written acknowledgment from the charity for all gifts that are worth $250 or more. This statement should include a description of the items contributed.

What Happens After You Donate?

Once you’ve donated and received the necessary paperwork for your deduction, all that’s left to do is simply file your annual tax return. However, tax-exempt organizations have a few more steps to take such as filing their required Form 990 each year.

Exempt organizations are required to file this return to ensure that their organization is not abusing its tax-exempt status. The IRS also utilizes the information reported on Form 990 and makes it available for public information.

Luckily, exempt organizations can handle all of their Form 990 filing needs right here at ExpressTaxExempt with our easy, simplified filing process, and can even instantly share their information with GuideStar, the world’s largest source of nonprofit organization information.

Give, Give, Give!

The ExpressTaxExempt team encourages you to take some time this holiday season and give back in some way in honor of #GivingTuesday. Once again, feel free to comment on ways that you or your organization are helping out today and days to come as well as providing your organization's information to gain support from fellow ExpressTaxExempt users.

Read More »

Last Minute Form 990 Filing Tips

The deadline for organizations to file 990 Forms is quickly approaching! If you’re filing for an organization that operates on a calendar year tax year, we want to make sure you have everything you need to be fully prepared for the deadline. And since we’ve already established e-filing is the best route at this point, here are a few tips for last minute Form 990 e-filing!

Know Which Form You Need to File
Before we even get started, you’ll need to know which form in the 990 series your organization’s required to file. Typically, you can go determine this based on the form you’ve filed for previous years. However, if this is your first year filing or you’re just not sure which form to file, here’s a simple guide:

• -Form 990-N, the e-Postcard, is filed by organizations with gross receipts (income) of $50,000 or less during the tax year.
• -Form 990-EZ is filed by organizations with gross receipts less than $200,000 or total assets less than $500,000.
• -Form 990, the long form, is filed by organizations with gross receipts greater than $200,000 during the tax year or with total assets greater than or equal to $500,000.
• -Form 990-PF is filed by all tax-exempt organizations considered to be Private Foundations, regardless of total gross receipts.

E-file the e-Postcard Faster than Ever
Not to brag, but we’ve made e-filing the e-Postcard an easier and faster process than ever before! You can use our new website, epostcard.expresstaxexempt.com, to e-file your 990-N in just THREE steps. Or, if you’re constantly on the go, working and non-profiting, you can download our free Form 990-N app for iPhones, Androids, and tablets, which can also have your 990-N filed in just a few minutes. Oh, and psst: we’ve also got a free extension Form 8868 mobile app you can download as well, which may be good to know because…

You Can Extend Your Deadline and Get More Time to File
If it really gets down to the wire and you know you’re not going to make the deadline, just extend it. This year, it’s easier than ever since the IRS condensed the once 2-part 8868 Form into one automatic extension form. Now, all you have to do is complete one form - you don’t even need a reason why you need more time to file - and send it off and you’ll automatically receive a 6-month extension to file.

Give Us a Call If It Gets to Be Too Much
Like your organization is there for others, we’re here for you. If you need any help at all in your 990 filing process, don’t hesitate to give us a call! We’re available Monday through Friday, 9:00 a.m. to 6:00 p.m. EST, at (704) 839-2321 and through live chat on our site. We also offer 24/7 email assistance at support@ExpressTaxExempt.com!

Read More »

Five Common Form 990 Errors

Paying taxes is unavoidable; paying even more money to the IRS because their long, complex forms caused you to make an error and incur penalties is not. 

Form 990 is a long and eye-blurring form (and the IRS-provided instructions for filling out the form is 100 pages long). But if you’re directing an organization exempt from income tax under section 501(a), you probably hardly have time for such “light” reading. So here are five common, avoidable errors made on Form 990 that could subject you to steep penalties or even an IRS inquiry:

• Using the wrong form. There are different types of Form 990 that apply to different tax exempt organizations. Using one form when you should use another can incur penalties.

• Form 990-N (“ePostcard”) is filed when your gross receipts are less than $50,000
• Form 990-EZ is filed when your gross receipts are less than $200,000 and your assets are less than $500,000
• Form 990 (“long form”) is filed when your gross receipts are greater than $200,000 or your assets are greater than $500,000.

• Using the calendar year instead of a fiscal year. The deadline to file Form 990 is the 15th day of the 5th month after the end of your organization’s fiscal year. Typically, this deadline is May 15 as many fiscal years do coincide with the calendar year. However, if your fiscal year ends on a day other than December 31, you could be at risk for filing late or even filing for the wrong year. Your filing year is dictated by the first month of the fiscal year. For example, an organization whose fiscal year runs from December 1, 2013-November 30, 2014 should file a 2013 Form 990 by April 15, 2015.

• Failing to prepare and include Schedules. ALL section 501(c)(3) organizations MUST prepare and attach Schedule A to Form 990. If this form is missing or incorrect, the IRS can penalize you. Based on organization type, gross receipts, and other stipulations, you may also be required to fill out and submit other schedules, without which your filing is incomplete.

• Submitting Form 990 with missing or inaccurate information. This could be anything from failing to mark an applicable box, to failing to list officers and key employees (including volunteers), to an imbalance between your ending net assets sections. Any discrepancies could flag your Form 990 as incomplete or incorrect, resulting in penalties or an IRS inquiry.

• Failing to file an extension. An extension can allow you to postpone your deadline for 3-6 months, depending on your type of organization and whether you plan to file a Form 990 or Form 990-EZ. However, an extension cannot be filed after your organization’s original deadline. If you are late filing your Form 990 and have not filed an extension, you’re at risk of accruing late penalties.

Avoiding these common mistakes and staying informed can make taking on Form 990 seem like less daunting of a task. And to make it seem even LESS daunting, here’s a bonus avoidable error, just for you:

• Not using Express990 to file! Sure, you could try to keep in mind these and all of the other errors you might make while filing, but why would you when we can do it for you? Express990 is easy to understand; it turns Form 990 into a conversation. Answer “yes” or “no” questions, fill in your financial specifics, and we’ll make sure everything matches up and everything required is included. We’ll then run an error check before submitting so that any obvious errors can be fixed and you avoid filing an incorrect or incomplete form. And if you see where you might need more time to file, you can e-file extension Form 8868 right from our website.

But if you still feel like pulling your hair out over Form 990, you can contact the Express990 team Monday-Friday from 9am-6pm EST by phone (704-839-2321) or by live chat (www.expresstaxexempt.com), or 24/7 by e-mail at support@expresstaxexempt.com.

Read More »

990 Penalties & How To Avoid Them

The main questions the Express990 Team receives are almost always about penalties. When it comes to 990 penalties, things get a little tricky. But don't you worry, I will explain them in detail and how you can avoid them or reinstate your tax exempt status.

Incomplete Returns
If you file an incomplete return, say you didn't fully complete a certain schedule on your 990-EZ, the IRS will contact you to notify you of the problem.

Late Filing Penalty
Late filing penalties are completely avoidable. First know, if you need more time you can e-file Tax Extension Form 8868 for an automatic 3-month deadline extension. Form 8868 can save you from having to pay hefty late filing penalties. The IRS states:
"If an organization whose gross receipts are less than $1,000,000 for its tax year and files its Form 990 after the due date (including any extensions), and the organization doesn't provide reasonable cause for filing late, the Internal Revenue Service will impose a penalty of $20 per day for each day the return is late. The maximum penalty is $10,000, or 5%, of the organization's gross receipts, whichever is less. The penalty increases to $100 per day, up to a maximum of $50,000 for an organization whose gross receipts exceed $1,000,000."

• Note there is no penalty assessed for late filing of the 990-N (e-postcard). If you do not file your 990-N, the IRS should send you a reminder notice. If you do not file your 990-N for three consecutive years, your tax exempt status will be automatically revoked. 

Reinstating Tax Exempt Status

If you have found out your tax exempt status has been revoked, you will need to contact the IRS. For most cases the IRS can reinstate your status over the phone, or they will let you know what you need to do. The IRS publishes an Automatic Revocation of Exemption List that has the names of organizations whose tax exempt status has been revoked so you can know for sure where your status stands. 

The best way to avoid 990 penalties is to file by your deadline. Your 990 deadline will be determined by what type of tax year you follow; Fiscal or Calendar. If you have any questions about e-filing your 990 or Form 8868 (application for extension of time to file an exempt organization return) don't hesitate to contact the Express990 team via phone: 704-839-2321 or email: support@expresstaxexempt.com

For More Information on 990 Penalties, check out these blogs:

How To Recover Payments Due To IRS Penalties

How To Reinstate Tax-Exempt Status

Tax Tips To Avoid Late Filing Penalties For Form 990-EZ

Read More »