Nonprofit Bookkeeping & Accounting For Dummies, 2nd Edition

Chapter 16

Doing the Accounting for Tax Form 990

IN THIS CHAPTER

Selecting the right form

Avoiding unnecessary penalties

Filing according to standards

Your nonprofit organization is tax-exempt, so you’re probably wondering why I’ve included a chapter on filing a tax report. You may be surprised to find out that even though you generally don’t have to pay federal income taxes, your organization does have to file a return. Internal Revenue Service (IRS) Form 990, Return of Organization Exempt from Income Tax, is an annual information return that most tax-exempt organizations must file. Although this is a topic most people may prefer to ignore, failure to accurately complete this form leads to repercussions none of us wants. The information a tax-exempt organization provides on this form serves as the primary source of information for the public about that particular organization. Therefore, the information you provide on this form becomes the basis for how the public and the government perceive your organization.

Which version of this form your organization needs to complete depends on your organization’s gross receipts and total assets. Before getting too worried about this form, ...