5 New Year's Resolutions for Tax Exempt Organizations

As we continue to make effective plans for an awesome 2018 work year, we wanted to share some New Year’s Resolutions with you that could greatly benefit your nonprofit organization. 

New Year’s Resolutions

1) Better Money Management

Gaining necessary funds to adequately run your nonprofit organization can be a challenge. Make every effort you can to closely manage the funds of your organization to maximize its usage and allocate accordingly for the fiscal year. 

2) Increase Your Social Media Presence

The world that we live in today is extremely driven by social media. Take advantage of this easy, free, and trendy method of communication! Having your nonprofit active on social media can increase your audience and interact with current and potential donors, supporters, and volunteers more frequently. 

Social media platforms such as Facebook, Instagram, Twitter, LinkedIn, and Reddit are great to use. YouTube is also another way to promote your organization and its activities.

3) Revamp Your Organization’s Correspondence

This is actually one of the easiest resolutions to tackle. Instead of sending out the same generic correspondence each year, simply create something new! Rewrite your “thank you message,” website content, etc., to attract the attention of the reader. 

4) Redefine Your Target Audience 

In your upcoming team/staff meeting, take a few moments to analyze the mission of your organization and determine which audience(s) you should target this year. 

Having more than one target audience is okay!

5) Become Mobile-Friendly

With 9 of 10 American adults owning a mobile phone of some kind, it is extremely important that your website is mobile-friendly.

Mobile-friendly sites are very effective and useful for informing others about your organization and increasing online donations.

You Can Do It

While New Year’s resolutions require effort and dedication, these 5 resolutions can easily be accomplished by your organization during 2018. As always, the ExpressTaxExempt team is here to help you as much as possible. 

We’re just a phone call, email, or chat away if you ever have any questions or need assistance during any part of the e-filing process. 

Feel free to contact our support team of e-file experts at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. You can also reach us 24/7 via email with support@ExpressTaxExempt.com.

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International Day of Charity: Support & Give Back Today

“Every good act is charity. A man's true wealth hereafter is the good that he does in this world to his fellows.” -- Moliere

Did you know that today, Tuesday, September 5, 2017 is the International Day of Charity? If you’re like me, you may have recently returned from a Labor Day Weekend vacation or even enjoyed a great cookout with friends and family on your day off on Monday.

Labor Day Weekend has ended and now we’re “back to life...back to reality!” As we get back into the swing of things to finish out the rest of this week, take a few moments and help make the world a better place by making a donation to charity on International Day of Charity.

Donations can be given to charities that support the environment, protect children, feed the hungry, or help worthy causes. Of course, with their being so many charities to choose from, it’s quite hard to choose which one to give to. We did some research and found some of the top 10 charities that are making a difference in the world which you could consider donating to. Check out the list below:

Charitable Organizations

Natural Resources Defense Council

Based in New York City, this organization has worked with businesses, elected officials, and community groups on issues such as global warming, ocean cleaning, and food security. Natural Resources Defense Council website.

United Nations Foundation

The United Nations Foundation is a U.S. public charity founded by Ted Turner which partners with others around the world to tackle issues such as global health, climate change, poverty, women’s empowerment and more. Visit the United Nations Foundation to donate.

Caring Voice Coalition

The Caring Voice Coalition puts its efforts towards empowering patients who live with a life-threatening chronic disease by providing outreach programs and services aimed to provide financial, emotional, and educational support. Caring Voice Coalition website.

Billy Graham Evangelistic Association

Established in 1950 and now based in Charlotte, North Carolina, this association aims to bring the Gospel of Jesus Christ to as many people as possible around the world. The association has a weekly Hour of Decision radio program broadcast, syndicated newspaper column entitled “My Answer,” and also has the Billy Graham Response Team which provides emotional and spiritual care to individuals and communities living through a sudden tragedy. To donate, visit the Billy Graham Evangelistic Association.

Catholic Medical Mission Board

This group provides healthcare for the world’s most poor and does so by building healthy, sustainable communities through local engagement and partnerships. These causes are targeting in communities throughout Africa, Latin America and the Caribbean. Catholic Medical Mission Board website.

AmeriCares

AmeriCares serves as an emergency response and global health organization that aids those in crisis. Established in 1979, AmeriCares has delivered more than $12 billion in humanitarian aid to 164 countries, including the United States. To support AmeriCares, click here.  

To assist the victims of Hurricane Harvey, see our most recent blog post:

“5 Ways You & Nonprofits Can Help Hurricane Harvey Victims”

Samaritan’s Purse

The Samaritan’s Purse has met the needs of those who are victims of war, poverty, natural disasters, disease and famine, while including the purpose of sharing God’s love through His Son, Jesus Christ. Its most popular mission, Operation Christmas Child, has delivered more than 135 million shoe boxes filled with gifts to poor children in more than 150 countries. Visit the Samaritan’s Purse website today to make a donation.

MAP International

Founded in 1954, MAP International helps prevent disease by improving water supplies and promotes health to create hope and lasting change in more than 115 countries. Their annual efforts include partnering with local leaders to help educate and train communities to deal with health threats such as HIV/AIDS. Visit their website at www.map.org for more information and ways to donate.

Direct Relief

Direct Relief is California’s largest international humanitarian nonprofit organization which provides medical assistance to improve the health and lives of people affected by poverty and disaster in the United States and throughout the world. More than $3.4 billion in medical supplies and equipment has been provided since its inception in 1948. Visit the Direct Relief website to support their efforts.  

Take Action

Let’s celebrate International Day of Charity by supporting a charity of your choice and helping those that are in need. Remember, charitable donations can be listed as a deduction on your taxes, so be sure to keep record of your gift. For more information on Charitable Donation Deductions, click here.  If you know of other charities that could use our support, please leave a comment below. At ExpressTaxExempt, we respect the services that exempt organizations provide to communities and we’re motivated to help with your e-filing needs so you can get back to proudly serving your community. Visit our website for any tax forms that your tax exempt organization may need throughout this year and save even more when you e-file with our recently reduced filing rates! We’re available to assist you via phone at 704.839.2321 on Monday through Friday from 9 a.m. to 6 p.m. EST or reach out to us 24/7 via email at support@ExpressTaxExempt.com.

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Give Now, Receive Later: Donate & Get Money Back

At ExpressTaxExempt we respect the services that nonprofits, charities, and exempt organizations provide to their community. These groups help so many from day to day, so “now let us help you!”

As expected, most nonprofit organizations and charities aim to receive donations and contributions from generous givers to support their philanthropic endeavors. One may ask, “Why would a tax company be concerned with donations?” To answer that question, all contributions and donations to an organization qualified by the IRS can be deducted from your tax return when filing. For those that are in charge of collecting donations for your organization(s), this is a great interesting fact to share with your potential donors.

We’ve listed some tips here for you and your donors to utilize to ensure that your contributions  will positively pay off during tax filing and tax return season.  

TIP #1: Make donations to a qualified organization. Deductions on your tax return cannot be made to specific individuals, political organizations and candidates.

(Exempt Organizations Select Check Tool)

TIP #2: Must file Form 1040 and itemize deductions on Schedule A. (Extension Form Available).

TIP #3: Benefits received from contributions, such as merchandise or tickets to a game, can only deduct the amount which exceeds the market value of the received benefit.

TIP #4: Non-cash property or stock donations are usually valued at fair market value. Clothing and household items should be in good used condition or better in order to be deducted.

• Fair Market Value: The agreed price at which property would change hands between a willing buyer and seller.

TIP #5: Regardless the amount, a bank record or payroll deduction record must be maintained for a contribution of cash, check, or other monetary gift. Written communication from the organization [that received the donation] with the name of the organization stated along with the date and amount of the contribution will also suffice for verification purposes.

TIP #6: For contributions of cash or property equaling $250 or more the following must be provided to claim a deduction:

• Bank record
• Payroll deduction record
• Written acknowledgement from organization
• **One document may satisfy these requirements**

TIP #7: If the total deduction for all non-cash contributions for the year is over $500, an

IRS Form 8283 must be completed and attached to your return.

TIP #8: Donating items or a group of similar items valued at more than $5,000 must also complete Section B of Form 8283, which will more than likely require an appraisal by a qualified appraiser.

Whether you are responsible for collecting donations for your charitable or nonprofit organization or considering to make a donation, ExpressTaxExempt is here to help you each step of the way and provide beneficial content for you and your organization. Also, be sure to visit ExpressTaxFilings for your personal e-filing needs as well as ExpressExtension to be granted extra time to gather all necessary information. If you need any help at all with the filing process, don’t hesitate to give us a call. We’re available Monday through Friday, 8:30 a.m. to 5:30 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.

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Why E-file with ExpressTaxExempt

The May 15 filing deadline for exempt organizations and private foundations is inching ever closer. E-filing 990 forms and extension is quickly becoming the best way for organizations and paid preparers to submit tax returns to the IRS.

If your organization still needs to file and you’re looking for an IRS-authorized, e-file provider, ExpressTaxExempt has you covered! With value-based pricing, nonprofit industry knowledge, and exclusive features, you’ll e-file confidently and securely this tax season.

Annual Tax Returns Made Simple
ExpressTaxExempt provides a user-friendly interface that guides you through the interview-style filing process with helpful tips. Information such as donation lists can be uploaded in bulk saving you a substantial amount of filing time. Schedules for Form 990, 990-EZ, and 990-PF are automatically generated based on your form interview answers. Our internal audit check ensures that every question has a response and amounts are balanced. Any mistakes we identify can be corrected before you transmit to the IRS.

Unique Filing Features
Transmit returns for multiple organizations from a single account or grant limited access to additional users for account management. Invite principal officers via a secure web portal to review completed tax form, add comments, make changes, or approve the return with an e-verify signature. Once you transmit your 990 form to the IRS, you’ll receive access to a printable copy of your return along with real-time email notification of your filing status.

Submit amended returns for approved 990 forms from previous tax years, or re-transmit rejected forms at no extra costs. Any tax return transmitted with ExpressTaxExempt is conveniently and securely stored within your account for easy access or reference later on.

Mobility & Accessibility
Small tax-exempt organizations can quickly and easily e-file using the free ExpressTaxExempt - Form 990 mobile app for iOS and Android devices. Large and mid-size exempt groups can also use the free Form 8868 mobile app to transmit extension forms and get approved for a 6-month extension of time almost instantly. You can use any desktop computer with internet access to sign in and manage your account which also includes continuing from where you last left off with the e-file process.

Support & Security
ExpressTaxExempt offers 100% US-based customer support for any questions about e-filing or your filing status. You also have the option to set up a session for in-depth, step-by-step filing assistance directly from your account with our Premium Support feature. Rest assured that your account is safe and secure with intensive, up-to-date web securities guaranteed to safeguard your private information. ExpressTaxExempt ensures that returns are sent directly to the IRS and nowhere else.

With all these benefits and features, why go through all the stress and time it takes to paper file? E-file your 2016 form 990 before the May 15 due date with IRS-authorized ExpressTaxExempt. Contact our support team of e-file experts at 704.839.2321 for any questions or help with your e-filing experience. We’re available Monday through Friday from 9 a.m. to 6 p.m. EST or reach us 24/7 via email with support@ExpressTaxExempt.com.

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How to File the Updated 8868 Extension Form

IRS Form 8868 is a tax extension form for exempt organizations and private foundations needing to increase their filing deadlines for 990 tax returns. The form separates into two sections - Part I and Part II - with each one offering a 3-month extension of time.

For the 2016 filing year, the IRS has eliminated the separate sections and now offers the 8868 form as a single filing that grants an automatic 6-month extension of time. Completing the new 2016 Form 8868 is similar as it was before; however, here are some IRS guidelines to follow when submitting an extension:


Basic Organization Details
Begin the form by adding essential information about your exempt organization or private foundation which includes the following:

• Organization Name
• Organization Address
• Employer Identification Number (EIN) or Social Security Number (SSN)

The IRS added the social security option for individuals filing the form. If you are filing on behalf of a nonprofit or private foundation, you should enter the federal employer identification number.


Return Codes/Books/Group Return
Enter the return code that represents that tax form you want to extend its filing time:

Form 990/990-EZ - 01 Form 990-T (corporation) - 07

Form 990-BL - 02 Form 1041-A - 08

Form 4720 (individual) - 03 Form 4720 (other than individual) - 09

Form 990-PF - 04 Form 5227 - 10

Form 990-T (sec. 401(a) or 408(a) trust) - 05 Form 6069 - 11

Form 990-T (trust other than above) - 06 Form 8870 - 12

You need to enter the full name of the person or officer that manages the organization’s books or financial statements along with the organization’s phone number, fax number, or both. You also have a choice to indicate whether the organization does not have an office or place of business within the United States.

If the extension is for a group return, the IRS requires you to enter the organization’s 4-digit Group Return Number (GEN). You can select if the extension is for the whole group or part of the group. If it’s for part of the group, you should attach a list of names and EINs of those organizations.

Tax Year Period
On Line 1, enter the extended due date which is six months after the initial filing deadline. For example, if your due date is June 15, then your extended date is December 15. Then, you can choose if the extension is for a calendar year or fiscal year. If it’s for a calendar year, then enter the numerical year, i.e. 2016. For fiscal tax years, enter the begin date followed by the end date, i.e. March 1, 2016, to February 28, 2017.

Important: The updated Form 8868 only applies to tax year 2016 and upcoming tax years in the future. If you happen to be filing an extension for 2015, you’ll need to revert to the 2-part form.

For organizations filing for a tax year period less than a full 12 months, you can indicate the reason why on Line 2.


Tax Liabilities
Line 3a, b, and c are for exempt organizations and private foundations with tax amounts owed to the IRS. Enter any tentative taxes minus nonrefundable credits on Line 3a. List refundable credits, estimated tax payments made, and any prior year overpayments as a credit on Line 3b. Subtract your total sum of 3b from 3a to get your “Balance due.” on Line 3c - that’s the amount you have to pay either through EFTPS or with a check or money order.

E-file Tax Extensions
E-filing Form 8868 to the IRS is the best way for both individuals and tax professionals. By using IRS-authorized, e-file services like ExpressTaxExempt or ExpressExtension, you can typically complete and transmit a 2016 8868 form in less than 10 minutes. The IRS processes e-filed forms much quicker than paper filing, so you’ll receive confirmation and a copy of your extension soon after transmitting. And with e-filing, you usually have until Midnight local time of the deadline date to submit your form.

For any questions about your organization’s information, tax year period, tax liabilities, or Form 8868 return codes, you can contact the IRS Tax-Exempt Hotline at 877.829.5500. If you’re interested in e-filing your extension form, you can reach ExpressTaxExempt at 704.839.2321 or via email with support@ExpressTaxExempt.com.

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What to Do For the May 15 Deadline

There’s about a month left before the May 15 filing deadline for tax-exempt organizations. The due date only applies to groups who operate on a calendar tax year which is from January 1 to December 31.

If this is your first time filing for a nonprofit or charity, or you just can’t remember exactly how to file a 990 form, here are a few tips to get you prepared.

Get Proper Documents Together
Before you even begin with the first page, you need to have the right information readily available or else you’ll waste time looking for papers rather than completing your return. Depending on which 990 form you need to file, you may have to report various details such as revenue and expense amounts, program services, a list of employees, financial statements, governance and more.

Some sections of a 990 tax return require additional information from a Schedule which you attach to your form. Schedules allow you to submit extra details about certain activities conducted by your organization - some schedules may apply to you such as Schedule B for contributions while others may not. For instance, Schedule H is only for hospitals and Schedule N is for terminated tax-exempt groups.

Types of 990 Forms
The IRS offers four main types of 990 forms - certain kinds serve as simpler options to the original 990 long form. Choosing the most appropriate return will save you precious amounts of filing time:

• Form 990-N (e-Postcard) - For organizations reporting gross receipts less than $50,000
• Form 990-EZ (Short Form) - For organizations reporting gross receipts less than $200,000 and total assets less than $500,000
• Form 990 (Long Form) - For organizations reporting gross receipts equal to or greater than $200,000 and total assets equal to or greater than $500,000
• Form 990-PF - For organizations identifying as an exempt private foundation, taxable private foundation, or a nonexempt charitable trust treated as a private foundation

Extension Form 8868
For any reason, if you are not ready for the May 15 deadline, you can extend your filing due date by submitting IRS Form 8868. The 8868 form allows you to increase the time you have to file a 2016 990 form by six months. You are responsible for submitting an extension request before your original due date - any later and the IRS will automatically reject it. There is no explanation required for filing an extension; however, if your organization owes any tax liabilities, it still must be paid by the original filing deadline.

Paper Filing vs. E-filing
Electronic filing is becoming the most preferred method for tax-exempt organizations and tax professionals to send 990 forms to the IRS. With paper filing, you’re sacrificing a significant amount of time to physically prepare financial statements, search and complete schedules, and mail the tax return without any confirmation from the IRS.

E-filing a 2016 Form 990 requires less time to process and is much easier to prepare. Transmitting a 990 tax return with an IRS-authorized, e-file provider - such as ExpressTaxExempt.com - offers more security than postal mailing, and you can receive instant confirmation of your filing status. The IRS also recommends exempt organizations to e-file rather than paper filing.

If you have any intensive tax questions regarding your organization’s revenue, expenses, or activities, you should contact your local tax professional or the IRS Tax-Exempt Hotline at 877.829.5500. For concerns or assistance with e-filing, you can reach out to ExpressTaxExempt at 704.839.2321 or with support@ExpressTaxExempt.com.

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Report Entire Contribution Lists in Minutes!

One of the most tedious tasks when filing Form 990 or a 990-EZ is entering list after list of donor information and their contribution amounts.

Many tax-exempt organizations receive hundreds of donations from individuals and groups each year and reporting them one by one consumes too much time.

IRS-authorized ExpressTaxExempt offers features which streamline your filing experience so you can e-file Form 990 as quickly and smoothly as possible. One of those features is our Bulk Upload option designed for exempt organizations who take in many donations throughout the tax year.

Upload Every Contribution at Once
Mid-size and large organizations have the option to upload their received donations by using the “Bulk Upload” button from the “Contributions, Gifts, Grants, and Similar Amounts Received” section.

By bulk uploading your organization’s contributions, you can continue filling out the rest of your tax return while ExpressTaxExempt loads all the donor information into your account.

Simple Steps to Upload
Uploading your contribution lists is quick and easy with these steps:

1. 1. Download pre-made excel template
2. 2. Enter your donation entries in the template and save
3. 3. Upload your saved excel file from your computer

You can also upload your own contribution spreadsheet if you have one already completed. Make sure your column headings match the required information that our application asks.

Schedule B Filings
ExpressTaxExempt automatically generates your Schedule B and pre-loads your contributions onto it. Remember, the IRS General Rule states to only list singular donations that are at least $5,000. And while you can enter or upload every contribution, our service will only place the entries that are $5,000 or greater as per IRS rule.

Contact our live US-based team of e-file professionals for any questions or need assistance with reporting contributions for your 2016 Form 990. We’re available at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or send an email 24/7 to support@ExpressTaxExempt.com.

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Invite Reviewers & Additional Users This Tax Season

The tax season is nearly upon us with the IRS filing deadline for exempt organizations just a little over a month away. Before the stress starts to settle in, ExpressTaxExempt offers you convenient ways to get some help directly from your tax-exempt group without hauling multiple form copies.

Manage Additional Users
Once you’ve entered your organization details, you can create user accounts for members or key employees with limited access to oversee your 2016 Form 990. Create your additional accounts with these steps:

1. 1. Click the “My Account” tab
2. 2. Click “Manage Additional Users.”
3. 3. Click the “Add Additional User” button
4. 4. Enter the user’s details (name, phone number, email) and select the type of access
5. 5. Click “Create User” button

Your additional user will receive an email containing a password which they can use along with their email address to log into your account.

Important: There are two types of access you can set for your users - “View” and “Edit.” “View” allows users to see everything in your account without the ability to make any changes. “Edit” can grant your users limited permissions such as paying and transmitting to the IRS or receiving notification emails.

Manage Reviewers and Approvers
After generating your Form 990 copy, you can invite board members or other officers to review your return before e-filing your 990 form to the IRS. These requests grant access to a secure web portal where members can add comments, make suggestions, or verify with electronic signatures. Send your invitations with these steps:

1. 1. Click the “My Account” tab
2. 2. Click “Manage Reviewers and Approvers.”
3. 3. Click the “Add User” button
4. 4. Enter user’s details and select the tax year of the 990 form
5. 5. Click “Share Return” button

Your recipients will get an email containing a link to the secure portal and a password to log in. Unlike additional users, your reviewers won’t have access to your account - they can only see the copy of your completed return.

If you have any questions about adding users or inviting reviewers from your account, contact our live US-based support team at 704.839.2321, or with support@ExpressTaxExempt.com. Eliminate tax season stress completely with our in-depth filing assistance by scheduling a Premium Support session before the May 15 deadline directly from your ExpressTaxExempt account.

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Politics and Charitable Nonprofits

Amidst our nation’s current political climate, the National Council of Nonprofits reports that nonpartisanship, an essential principle of charitable nonprofits, has fallen under scrutiny with our country’s leaders in Washington, D.C.

The organization is asking for all those concerned with the prosperity and efficiency of the nonprofit community to express support for increased protection by signing the Community Letter in Support of Nonpartisanship.

Nonpartisanship defines as being free from any party affiliation or designation. And though the IRS allows political participation from exempt organizations, there are strict regulations regarding lobbying and its expenditures. According to the National Council of Nonprofits, Congress is introducing bills that could repeal or substantially weaken current protections making charitable organizations more susceptible to endorse or oppose candidates running for an elected office.

The detrimental issue the Council points out is that being more impressionable towards political activities will redirect funding from an organization’s charitable mission to supporting election campaigns. Such legislation could also expose nonprofits and foundations to demands from candidates for political endorsements and contributions which will take funds from charitable work and eventually afflict the public trust of exempt organizations.

Ultimately, the Council states that the proposed changes are entirely unnecessary. They assure that there are already many legal ways for a nonprofit’s staff, board members, and volunteers to express their individual views on public policy issues. If you or any other nonprofit, charity, private foundation, or religious groups are interested in showing support or signing the Support of Nonpartisanship letter, you can visit GiveVoice.org or the Protecting Nonprofit Nonpartisanship website.

For any other questions or concerns about how lobbying and political activities can affect your organization, contact a local tax professional or reach out to the IRS Tax-Exempt Hotline at 877.829.5500.

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Revenue, Expenses, & Grants from Program Services

The IRS requires large and mid-size exempt organizations to describe three of their most major program services when reporting Form 990 or 990-EZ tax returns.

These services typically measure or rank by the total expenses spent by the organization. If a tax-exempt group has less than three program services, they can just describe the activities of each available service.

Descriptions of program services can include many variables such as how many clients the organization served, days of care provided, publications issued, or the number of sessions held. Along with stating the objective of the service, the IRS also needs to know all revenue, expense, and grant amounts associated with each program.

Revenue
Section 501(c)(3) and 501(c)(4) organizations are responsible for reporting any income coming directly from activities of each program service. Fees for services or sales from goods related to each activity are all considered revenue. These amounts should include the program service revenue listed on Part VIII, Column A, Line 2 of the 990 form; it can also contain other amounts from Part VIII, Line 1 through 3 such as related or exempt function revenue.

Important: Revenue should also include any unrelated business income from activities exploiting an exempt function - advertising in a journal would be an example. You shouldn’t combine any charitable contributions and grants as revenue coming from program services.

Expenses & Grants
For each program service listed on Part III, Line 4a through 4c, 501(c)(3) and 501(c)(4) organizations have to enter total expenses that you reported on Part IX, Column B, Line 25. And list the total grants and allocations within those expenses that are marked on Part IX, Column B, Line 3 through 11 of the 990 form.

Other Program Services
If you have more than three significant program services, you can continue to report on the Schedule O. The IRS won’t require a detailed description of these other services like it did the first three. But you are responsible for listing the total revenues and expenses - including grants - exactly how you did with your organization’s larger program services.

With IRS-authorized ExpressTaxExempt, organizations can easily enter information about their program services in minutes. Our 990 form e-file application also generates any additional services onto your Schedule O and allows you to enter revenue, expenses and grant amounts for each entry.

Speak with your local tax professional or advisor if you have any detailed questions about your organization’s program services. For any questions or assistance with reporting your program activities with our e-file service, contact our US-based customer support team at 704.839.2321 or email us with support@expresstaxexempt.com.

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Intangible Religious Benefits from Charitable Contributions

The IRS has rules of recordkeeping and substantiation for donors giving charitable contributions along with disclosure rules for charities receiving those donations. Individuals or groups that donate to exempt organizations can typically write-off those tax-deductible donations on their annual return; however, there are a few other things required.

Deduction Requirements from Contributions

Donors must obtain a bank record or written receipt from the organization for any monetary contributions to claim the amount on their federal income tax returns. A written acknowledgment is also mandatory for any single contribution of $250 - cash or noncash - given to a nonprofit or charity. And charitable organizations should provide written proof to donors who receive over $75 of goods or services in return for the contribution.

Goods and Services
Written acknowledgments for goods and services exchanged for donations must contain a description of what the organization provided and an estimated monetary value of items or services given to the donor. Contributors should also subtract the estimated amount from the total fair market value of the donation to know the deduction value. Goods and services typically include cash, benefits, property, services, or privileges. There are exceptions - one of which is intangible religious benefits.

Intangible Religious Benefits
The IRS does not require a description or value of goods included with a written acknowledgment from faith-based organizations that only provide intangible religious benefits to donors. The statement needs only to say the organization provided such benefits. A tax-exempt organization operating exclusively for religious purposes can only grant this type of benefit; it’s usually something that you can't sell as a consumer transaction.

Examples of intangible religious benefits include admission to religious ceremonies or a de minimis tangible benefit such as wine used for religious services. Benefits that the IRS doesn’t consider intangible or faith-based include education towards a recognized degree, consumer goods, or travel services.

Religious organizations, such as churches, don’t typically need to file annual 990 returns with the IRS. But if they choose to do so, they must submit a complete return which may require a Schedule B for contributions equal to or greater than $1,000 and were used exclusively for religious purposes. You should also list donations used outside of religious purposes that are over $5,000.

If you have any questions regarding substantiation and disclosure requirements or about intangible religious benefits, we recommend seeking a tax professional for assistance. You can inquire about Schedule B and Form 990 information by calling the IRS Tax-Exempt Hotline at 877.829.5500.

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