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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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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Are Donations to Animal Rescue Shelters Tax Deductible?

Like with many other nonprofits or charities, if you make a donation, you can typically deduct the value of your contribution from your annual tax bill.

To do so, the nonprofit group you’re giving to must be officially recognized by the IRS as a section 501(c)(3) organization. You can check an organization’s tax-exempt status by searching the IRS Exempt Organization Select Check.

Are Donations to Animal Rescue Shelters Tax Deductible?

When you’re filing, you will also need to itemize the amount of your donation - this may not be worth the extra effort if you only gave a little here and there. But if you gave a significant amount throughout the year, it is best to itemize the deduction on your personal tax return.

Here are 3 things to consider when donating to an animal rescue shelter:

1. Pet Adoption vs. Donation

A common misconception most people make is thinking that payment for adopting from an animal shelter is the same as making a donation. Only donations in which the donor receives no goods or services in return can count towards a deduction.

In this case, you’re giving money in exchange for your pet - that's more of a service charge rather than a charitable contribution. However, if you paid over the cost of adoption or gave a gift outside of the adoption transaction, that counts as a valid charitable contribution.

2. Donation Value

If you’re donating items, you’ll need to estimate the fair market value for each of those items. There’s no one particular method for finding fair market values - you can look through local shops or online stores to figure out prices of similar items in the open market. For special unique gifts, such as a hand-woven, nap basket for kittens, you can get it appraised for the market value.

3. Written Proof of Donation

When you’re donating to an official 501(c)(3) organization, it’s common practice to receive a physical receipt for your donation. If your total contribution amount is at least $250, the IRS requires you to submit proper documentation along with your tax return. Like other receipts from nonprofits or charities, it should contain the description of the contribution and the amount along with the name and address of the organization.

If you received a gift or benefit from the animal shelter in return for your donation, include a description of the gift on the written receipt. Any reciprocated gifts with a monetary value should be subtracted from the amount of your contribution when reporting. A paper certificate or “Thank You” card typically don’t have cash values, but a coupon or gift card does.

Animal rescue shelters can report received contributions over $5,000 to the IRS by using a Schedule B along with their Form 990 or 990-EZ tax return. Taxpayers that want to claim an itemized deduction for their donations to an animal shelter can complete a Schedule A with their IRS 1040 form.

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Are Public Libraries Considered Nonprofit Organizations?

In general, public libraries do not receive 501(c)(3) exemption status from the IRS; however, tax officials recognize them as a governmental unit under the 501(c)(3) Internal Revenue Code which allows exemption from federal taxes.

For grant applications from foundations or charitable organizations, government entities usually need to provide proof of its tax-exempt or charity status.

Are Public Libraries Considered Nonprofit Organizations?

Tax-Exempt Status for Libraries

A public library can use its federal taxpayer identification number, commonly known as its Employer Identification Number (EIN), to identify itself. The IRS can also distribute a “governmental information letter” upon request which proves the library’s exemption from federal taxes. The letter also explains how the entity is applicable for deductible contributions and income exclusion.

When a new public library gets commissioned by an administration of public education, it is automatically exempt from state taxes and typically doesn’t pay federal taxes because of its governing entity status. In particular circumstances, a library can request to qualify as a 501(c)(3) organization instead of a government entity but has to submit a Form 1023 to receive a determination from the IRS.

While operating as a government entity, libraries can enlist another 501(c)(3) organization to accept funds or donations on its behalf - these nonprofit organizations are typically friends groups, community foundations, or library associations. They use public contributions and grants towards charity, education, the promotion of literature, and related administrative costs. Among other activities, these exempt organizations' charitable efforts are for improving public libraries, promoting literacy, and awarding scholarships.

Please Read: File Form 990-N, 990-EZ, 990, 990-PF Securely

Tax Deductible Contributions for Public Libraries

Public libraries and their associations are eligible to receive tax-deductible charitable contributions. The IRS requires a receipt written to donors who contribute over $250. You can give receipts or a “thank you” for lesser amounts if you choose, but the primary reason is for those planning to deduct their donation from their tax bill.

The tax receipt should contain the following information:

• Name and address of the organization
• Date the contribution was given
• The amount of a cash contribution or the description of a non-cash donation
• A statement of goods or services that are given in return for a contribution, if necessary

If there’s a donor that gives numerous small donations throughout the year, and their total amount is over $250, they will also need a written receipt for tax purposes. 501(c)(3) organizations or associations that are accepting contributions on behalf of a library will need to report individual donations of $5,000 or greater on Schedule B of their Form 990.

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How to Donate Tax Deductible Books to Libraries

One way to reduce the clutter around your office or home is to donate any old books you have to your local library - not only are you giving to a great cause, but you could also be lowering your annual tax bill.

Because the federal government classifies most libraries as nonprofit educational institutions, they are qualified charities that can receive tax-deductible, charitable contributions.

You can find information about your local library’s tax-exempt status through the IRS charity database, or speak with the library’s administrator. Here are some tips about donating books to a qualified, tax-exempt library:

Valuation of Books
Under normal circumstances, the IRS allows you to deduct the fair market value of your donated books. There aren’t many federal rules about what comprises a fair market value of an item; it’s typically an agreed price in the open market that’s considerably lower than the original value.

You can search second-hand shops or online stores to find prices for similar used items. In exceptional cases, your book may be worth more than fair market value. For instance, the author signed the cover or a page. You may want an appraisal for the book’s actual value.

Proper Recordkeeping
Like many other deductions, you need to provide proof to claim the credit. According to experts, if your contribution is less than $250, the library should give you a receipt displaying its name and address, the date you contributed, and a description of your donation. Your personal record should list the description along with how much you paid for the books and their fair market values.

With donations over $250, your receipt from the library needs to include any benefits or gifts given in return for your contribution. If your “Thank You” gift has monetary value, the IRS requires you to deduct the amount from the value of your donation. And any contributions totaling over $5,000 in books requires an appraisal for the fair market value.

Itemize Your Deduction
To properly claim a deduction for your book donations, you must itemize what you gave. Choosing standard deductions depends on your filing status and the standard changes for inflation each year - you typically want to itemize deductions if the amount is going to be larger than standard. But the choice is ultimately up to you - if you only donated a couple of novels that were just lying around, it may not be worth the extra effort to itemize.

Reporting Donations and Contributions
Taxpayers can report the value of their book donations on Schedule A, Line 17 of their personal tax return. If you’re donating a substantial monetary value, you may need to file additional forms and include an appraisal signature. For libraries reporting their received contributions, you can list donations worth $5,000 or more from any one donor on the Schedule B of your annual 990 form.

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Tax Deductible Contributions to Nonprofit Schools

Taxpayers can claim deductions towards their annual tax bill from donations they make to recognized 501(c)(3) organizations. Qualified 501(c)(3) groups typically include nonprofit schools operating solely for literary and education purposes.

But if the school significantly participates in activities that are unrelated to its charitable purposes, then the donation may not be tax deductible.

Here are some relevant guidelines from the IRS about donating contributions to your local nonprofit schools:

Value of School Donations
When filing your personal taxes, you can deduct the monetary value of cash or items you donated to a nonprofit school during the tax year. The process requires you to determine the fair market value of the donation on the day you gave it away.

There are various ways to find the valuation based on the type of item, and while the IRS won’t endorse one method over the other, they firmly state that the value must accurately indicate pricing that the item could sell for in an open market. An example would be donating clothes - you could check local thrift shops to find out how much the clothes would sell for or find prices from online stores selling similarly conditioned clothing.

Receiving Benefits from Nonprofit School
If the school gives you a gift or some benefit in return for your contribution, then the IRS requires you to reduce the value of your donation by the value of the gift you received from the school. The gift may be something of little to no monetary value such as a certificate, card, or plaque - in such a case, you won’t have to reduce your donation. But if the school happens to give you a $50 shopping card, you’ll need to subtract that amount from the value of your contribution.

Proof of Contribution and Penalties
Beware of filing overvalued charitable contributions. The IRS charges 20% of the underpaid tax from a valuation that exceeds 150% of its actual value and 40% from valuations exceeding 200% of normal value.

Furthermore, the IRS can deny your deduction if you don’t have proper documentation. You are responsible for maintaining a record of all your contributions - cash or items. You should have a description of the contribution and the name of the organization that received it. If your donation was cash, you should provide a bank statement, canceled check, or receipt. For large cash contributions, usually over $250, the IRS requests a written acknowledgment or receipt from the organization before deducting the donation.

Claiming tax deductible contributions towards nonprofit schools is only possible through itemizing your personal expenses. Taxpayers can claim itemized deductions on Schedule A of IRS Form 1040 if total deductible expenses are greater than standard deductions for the tax year. And for schools needing to report received contributions, you can do so by submitting a Schedule B with your IRS 990 form.

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Need to File Schedules? ExpressTaxExempt Has You Covered!

E-filing IRS Form 990 or a 990-EZ by itself is a formidable, time-consuming task, but based on your type of exempt organization and its activities; you may need to complete additional forms called Schedules.

ExpressTaxExempt.com automatically generates schedules from the information you provide about your nonprofit or charity. The process is seamless - all you’re required to do is complete the form interview, and at the end, you’ll find all your entries preloaded onto the appropriate schedule.

What are Schedules?
To briefly describe it, Schedules are various disclosure and compliance forms. They vary with each organization depending on type and activities - some tax-exempt organizations may have to file a couple while others could file many more.

Each schedule has a particular title and asks for an assorted set of information. They each supply the IRS with specific and detailed information about specialized activities conducted by your organization. You can find a complete list 990 schedules on our website.

• List of IRS Form 990 Schedules
• List of IRS Form 990-EZ Schedules

E-filing Schedules with ExpressTaxExempt
As mentioned earlier, our service automatically creates and loads information on the required schedule based on the answers from your form interview. If your answers don’t need exhaustive information, then the corresponding schedule isn’t generated. In short, you don’t have to stress over which schedules to file or not with ExpressTaxExempt.com.

Here’s an Example:
Let’s say your organization received donations throughout the year. In the form interview, you answer “Yes” to receiving contributions; then you proceed to list them. On the 990 form, you’ll see a check mark for having contributions along with the total amount received.

You’ll find the detailed information such as Name, Address, Type of Contribution, and Amounts on your Schedule B, which is the Schedule of Contributors. If you didn’t get any donations, answer “No” in the form interview, which prevents a Schedule B from generating along with any detailed questions about contributions - this process is the same for each available schedule.

ExpressTaxExempt.com makes e-filing Schedules easy, but if you have any questions about your form interview or schedules in general, feel free to contact our U.S. - based customer support team. We’re available at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. We can also be reached 24/7 with support@ExpressTaxExempt.com.

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