Does my nonprofit corporation have to file taxes?

If you are the owner of nonprofit corporation in New York, you may be wondering just how to approach common tax issues. Filing taxes in an accurate manner is extremely important for nonprofits, as failure to do so can have a dire impact on the future of your enterprise.

The Internal Revenue Service provides some crucial information on what is expected of those filing on behalf of nonprofits. Nonprofits typically file Form 990 on a yearly basis. This form provides the IRS with important information about your nonprofit and its operations. Form 990 must be filed no later than five months after the end of your organization’s accounting period, and is required by the fifteenth day of that month or it will be considered late.

Failing to file Form 990 can have a range of serious consequences. The most significant penalty comes about after three consecutive years of not filing. In this case, your organization’s tax exempt status may be revoked, which would entail payment of taxes on an annual basis. If this occurs, you will need to request a reinstatement of your nonprofit’s exempt status. Less serious penalties include a fine of $20 per day for late filings, which can also be levied against returns considered incomplete by the IRS.  

However, there are certain situations where filing Form 990 is not required. Governmental entities and political organizations can be exempt from filing informational returns. Churches and other organizations affiliated with religion may also be exempt from filing. The amount of gross receipts your organization collects can also play a role. If your nonprofit totaled $50,000 or less, you may be required to file an electronic return or e-postcard (known as Form 990-N). 

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