Important May 15 deadline for nonprofits

Published 4:00 am Sunday, April 26, 2015

The much-publicized April 15 tax deadline has come and gone. But for many charities, May 15 is just as important. That’s the deadline for calendar-year nonprofit annual returns, and missing it could be a serious problem for your charity.

    Why? Failure to file required returns for three years in a row can lead to automatic revocation of your tax-exempt status. The consequences of this are severe – donors can no longer deduct contributions to your organization, and your organization might be taxed as a corporation.

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    With some exceptions, such as qualified churches and certain other religious organizations, every nonprofit is required to complete Form 990, 990-EZ, or 990-N. Private foundations must file Form 990-PF.

    The good news is that filing your charity’s return might be easier than you think. A nonprofit with annual gross receipts of $50,000 or less can file Form 990-N, known as the “e-Postcard.” Form 990-N has eight questions and is filed electronically. Nonprofits with gross receipts of less than $200,000 and assets under $500,000 can use Form 990-EZ. Larger organizations must use the standard Form 990. If your charity runs a business to help raise funds, you may also need to file Form 990-T to report and pay tax on income from those sales.

 

    David Compton is a Certified Public Accountant with offices in Meridian and Birmingham, Ala.