Once tax-exempt status is approved by the Internal Revenue Service, a nonprofit must continue annual reporting along with the yearly filing of Form 990.
Filing Form 990
For nonprofit organizations with an operational budget of less than 25,000 dollars per year, Form 990 does not have to be filed. Though an NPO’s operations may function for a long time without ever reaching this level of income, as soon as the 25,000 dollar mark is reached, the NPO must begin filing.
Private foundations are required to use the 990PF form, but the 990EZ form is available to any public charity that has a revenue (from all sources) between 25,000 and 100,000 dollars. Larger public charities that take in over 100,000 dollars must use a 990 form.
Along with financial statement information, detailed information on expenditures and income is also required. Any changes that were made to the nonprofit organization within the preceding year should be reported at this time. Unlike personal income tax returns, Form 990 is due annually on May 15th.
Many organizations use a professional accountant to assist them with filing Form 990. It can be done, but requires good records, patience and attention to detail. For the organization that needs extra time to file, Form 8868 may be used to request a 90-day extension (IRS-557, 2005).
