The 990ez form, also known as the “Short Form Return of Organization Exempt from Income Tax,” is a simplified version of the standard 990 form used by smaller non-profit organizations to report their financial activities to the Internal Revenue Service (IRS). This form is designed for organizations with gross receipts of less than $200,000 and total assets of less than $500,000. In this article, we will delve into the details of the 990ez form, including who is eligible to file, what information is required, and how to complete and submit the form accurately and efficiently. Whether you are a non-profit leader or a tax professional, understanding the 990ez form is essential for maintaining compliance and transparency in the non-profit sector.
Table of Contents
- Understanding the 990-EZ Form
- Eligibility Requirements for Filing a 990-EZ
- Step-by-Step Guide to Completing the 990-EZ Form
- Common Mistakes to Avoid When Filing a 990-EZ
- Q&A
- To Conclude
Understanding the 990-EZ Form
The 990-EZ form is a condensed version of the standard 990 form used by tax-exempt organizations to report their financial information to the IRS. It is designed for smaller organizations with gross receipts of less than $200,000 and total assets of less than $500,000. This form is also known as the “Short Form Return of Organization Exempt From Income Tax.”
Filling out the 990-EZ form can seem daunting, but it’s important to understand the different sections and what information is required. The form is divided into four parts:
– Part I: Revenue, Expenses, and Changes in Net Assets or Fund Balances – This section requires information on the organization’s revenue, expenses, and changes in net assets or fund balances for the tax year.
– Part II: Balance Sheets – This section asks for information about the organization’s assets and liabilities.
– Part III: Statement of Program Service Accomplishments – Organizations must describe their mission and the programs they conducted to achieve it during the tax year.
– Part IV: List of Officers, Directors, Trustees, and Key Employees – This section requires information about the people who are in charge of the organization.
Here’s an example of what a completed 990-EZ form might look like in a table format:
| Part | Description |
|---|---|
| I | Total Revenue: $150,000, Total Expenses: $100,000, Net Assets: $50,000 |
| II | Assets: $400,000, Liabilities: $100,000 |
| III | Mission: To provide meals to the homeless, Program Service Expenses: $75,000 |
| IV | President: John Doe, Treasurer: Jane Smith |
It’s important for organizations to accurately complete the 990-EZ form to maintain their tax-exempt status and to be transparent about their financial activities. If you need assistance with filling out the form, consider seeking help from a tax professional or the IRS.
Eligibility Requirements for Filing a 990-EZ
If you are a small tax-exempt organization, you may be eligible to file Form 990-EZ, Short Form Return of Organization Exempt from Income Tax. This form is a simplified version of the full Form 990 and is designed for organizations with gross receipts of less than $200,000 and total assets of less than $500,000.
To be eligible to file Form 990-EZ, your organization must meet the following criteria:
- Gross receipts must be less than $200,000 for the tax year.
- Total assets must be less than $500,000 at the end of the tax year.
- Your organization must not be a private foundation or a supporting organization as described in section 509(a)(3).
- You must not have any unrelated business income that would require you to file Form 990-T.
It’s important to note that even if your organization qualifies to file Form 990-EZ, you may still choose to file the full Form 990 if you prefer. Additionally, some states may require the full Form 990 regardless of your organization’s size. If you are unsure about your eligibility or which form to file, it’s always a good idea to consult with a tax professional.
| Gross Receipts | Total Assets | Form to File |
|---|---|---|
| Less than $50,000 | N/A | 990-N (e-Postcard) |
| Less than $200,000 | Less than $500,000 | 990-EZ |
| $200,000 or more | $500,000 or more | 990 |
Remember, staying compliant with tax filing requirements is crucial for maintaining your organization’s tax-exempt status. Make sure to review the eligibility criteria carefully before filing to ensure you are using the correct form.
Step-by-Step Guide to Completing the 990-EZ Form
Filing your 990-EZ form can seem like a daunting task, but with this guide, we’ll break it down step-by-step to make it as easy as possible. First, gather all the necessary information you’ll need to complete the form. This includes your organization’s legal name, address, Employer Identification Number (EIN), and a list of your officers, directors, and trustees. You’ll also need financial statements such as your profit and loss statement and balance sheet.
Next, fill in the required information on the form. Start with Part I, which asks for information about your organization’s revenue and expenses. Be sure to carefully read the instructions for each line item to ensure you’re filling in the correct information. Then, move on to Part II, which asks for information about your organization’s balance sheet. Again, be sure to read the instructions carefully.
| Part | Information Needed |
|---|---|
| Part I | Revenue and Expenses |
| Part II | Balance Sheet |
Finally, review and sign the form. Before submitting, make sure to double-check all the information you’ve entered for accuracy. Once you’re confident everything is correct, sign and date the form. You can then submit the form electronically through the IRS website or mail it to the appropriate address. Don’t forget to keep a copy of the form for your records.
Common Mistakes to Avoid When Filing a 990-EZ
When filing a 990-EZ form for your non-profit organization, it’s essential to be meticulous to avoid common mistakes that can lead to delays or even penalties. Here are some key things to watch out for:
Incorrect or Incomplete Information: Ensure that all the information provided on the form is accurate and complete. Double-check your organization’s name, address, Employer Identification Number (EIN), and all other details. Missing or incorrect information can lead to processing delays or even the rejection of your form.
Not Reporting All Sources of Income: It’s important to report all sources of income, including donations, grants, and fundraising proceeds. Failing to report all income can result in penalties and interest charges. Make sure to keep thorough records throughout the year to make this process easier.
Here’s a simple table to help you keep track of what needs to be reported:
| Income Type | Details |
|---|---|
| Donations | Report all cash and non-cash donations |
| Grants | Include grants from both government and private sources |
| Fundraising | Report proceeds from events, sales, and other fundraising activities |
Failing to Attach Required Schedules: While the 990-EZ is a simplified form, some organizations may still need to attach additional schedules. Review the form instructions carefully to determine if any schedules are required for your organization. Forgetting to attach necessary schedules can result in an incomplete filing.
To avoid these mistakes, consider seeking the assistance of a professional tax preparer who has experience with non-profit tax filings. They can help ensure that your 990-EZ form is filed accurately and on time.
Q&A
Q: What is a 990ez form?
A: The 990ez form is a shortened version of the IRS Form 990, which is used by tax-exempt organizations to report their financial information to the Internal Revenue Service.
Q: Who is eligible to use the 990ez form?
A: Certain tax-exempt organizations with gross receipts less than $200,000 and total assets less than $500,000 can use the 990ez form.
Q: What information is required to complete the 990ez form?
A: The form requires organizations to provide details about their revenue, expenses, assets, and activities, as well as information about their governance and compliance with tax laws.
Q: Are there any restrictions on who can use the 990ez form?
A: Yes, certain types of organizations, such as private foundations and public charities with gross receipts over $50,000, are not eligible to use the 990ez form.
Q: How does the 990ez form differ from the full Form 990?
A: The 990ez form is shorter and less complex than the full Form 990, making it a more streamlined option for smaller tax-exempt organizations to report their financial information.
Q: What is the deadline for filing the 990ez form?
A: The deadline for filing the 990ez form is the 15th day of the 5th month after the organization’s fiscal year ends.
Q: What are the consequences of not filing the 990ez form on time?
A: Failure to file the 990ez form on time can result in penalties and potential loss of tax-exempt status for the organization.
To Conclude
In conclusion, the 990ez form is an essential document for non-profit organizations with gross receipts of less than $200,000 and total assets under $500,000. By providing detailed financial information to the IRS, non-profit organizations can maintain their tax-exempt status and demonstrate transparency to their donors and the public. While it may seem complicated at first, understanding and properly completing the 990ez form is crucial for compliance with federal regulations and maintaining the trust of stakeholders. Hopefully, this article has provided a clearer understanding of the 990ez form and its significance for non-profit organizations.
