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4 tips to help you prepare for the Form 990

Posted March 9, 2021 by Virginia Davidson

Nonprofit Form 990 prep

This article was originally published in 2019. It has been updated with new information.

Most federally tax-exempt organizations are required to file an annual tax return with the Internal Revenue Service called the Form 990. If you’re a development officer for a nonprofit, it’s unlikely that the responsibility for completing the Form 990 falls to you. But, it’s good to know the basics and be prepared to provide certain information that your tax preparer will need.

Know which version of the Form 990 your organization files

There are different versions of the Form 990. Your organization determines which version it needs to fill out based on its financial activity. The IRS publishes its thresholds here, but here’s an overview:

    • Organizations with gross receipts less than $50,000 annually can file a simplified version of the Form 990 called the e-postcard, though they may choose to file a full return
    • Organizations with gross receipts of less than $200,000 and gross assets less than $500,000 need to file Form 990-EZ or Form 990
    • Organizations with gross receipts greater than $200,000 and assets greater than $500,000 need to file Form 990
    • Private foundations file the Form 990-PF

 

Assemble some key information

Some versions of the Form 990 require a list of all donors who gave $5,000 or more to your organization in the past year. (Note: Be sure that your tax preparer completes forms correctly to ensure that your donors’ names and addresses are not publicly disclosed. See IRS guidance.) If you’re using Little Green Light as your donor management system, we offer instructions on how to run that report here. It’s a good idea to have this list prepared in advance so your tax preparer isn’t waiting on it. You can also check with them to see if they’re relying on you for any other required information.

 

Know the deadline for your Form 990

The date of April 15 tends to loom large when we think of tax deadlines, but the deadlines are different for the 990. The deadline is the 15th day of the fifth month following the end of your fiscal year. In other words, if your nonprofit’s fiscal year matches the calendar year, your deadline is May 15.  Find out in advance by reviewing this table of deadlines from the IRS, which also lists the extension deadline for each type of 990. If you may need to file for an extension, check out the procedures here.

 

Leave room in your schedule for the 990 preparation

Once you’ve determined your organization’s time frame for filing the Form 990, make sure you leave time in your schedule to help gather information for the 990. Doing so will help you avoid stress if and when unexpected questions arise, and will make the most of your tax preparer’s time.

 

Conclusion

The Form 990 is a required annual filing for most organizations, which gives you the opportunity to be prepared when your organization’s deadline comes around. Making room for it in your workplan and understanding what information you’ll need to provide will prevent the Form 990 from becoming an annual headache for you.

6 thoughts on “4 tips to help you prepare for the Form 990

  1. If you have to do Schedule A for the 990, then it is useful to “tag” constituents that are disqualified donors according to the IRS rules and the gift levels appropriate for your organization. This is useful since once a donor is “disqualified” for a year, then they are disqualified for all years going forward. Also tracking relationships in LGL in useful because certain relations to board members are also “disqualified” donors

  2. I believe that the IRS only requires that gifts of $1000 or more be included in the calculation for donors above $5000 annually. You can add this to the search criteria.

  3. This is a good post. When you mentioned the due date for the 990, it may be worth noting that for a 990, 990-EZ, and 990-PF that the due date can be extended 6 months by filing an extension request with the IRS.

  4. Good tips, we could have used this a few weeks back.
    It would be also helpful to show how to run a report that provides gifts equal to or greater than $5000 for last fiscal year plus cumulative giving for 3 years prior to last fiscal year for gifts equal to or greater than $7500. This is a requirement for 990 (not EZ or e-file).
    We had a difficult time trying to pull this data

    1. Hi Helen, Thanks for the suggestion – we will update our Knowledge Base instructions to provide guidance on including total giving for three prior years.

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