All the time and research needed to gather records, compile information, and fill out forms necessary to complete a Form 990 can be extensive. Understanding the proper form to use for your organization could be one less thing to worry about and possibly be a time saver. So here is a short guide that can be used to determine the Form 990 that is best suited for your Organization.
To start, a Form 990 is an information return tax-exempt organizations, nonexempt charitable trusts, private foundations, and the like annually must file with the IRS. The IRS uses the returns to understand the organization’s purpose, finances, activities, governance, and any other information relevant to the organization’s determination status. There are a variety of 990 forms to choose from, so here are a few tips to help you decide.
The 990-N (commonly known as e-Postcard forms) is considered the simplest form you could file. These “forms” are generally available for tax-exempt organizations with annual gross revenues of $50,000 or less to report. The 990-N requires a one-time registration through IRS.gov and electronic filing only. Due to its simplistic filing which includes only asking a few questions, there is no paper form. Supporting organizations and Section 527 (political) organizations are not allowed to file a Form 990-N and must instead file the Form 990-EZ or Form 990.
Forms 990-EZ (also known as short forms) are available for tax-exempt organizations, nonexempt charitable trusts, and section 527 political organizations with gross revenues of $200,000 or less and total assets of $500,000 or less to report at the end of the fiscal year. The usage of this form is not permitted by:
- 501(c)(29) and 512(b)(13) organizations, or
- Private Foundations
The “full” Form 990 is much more extensive than the Form 990-EZ and requires a significant amount of information. These forms are available for:
- Tax-exempt organizations
- Nonexempt charitable trusts, and
- Section 527 political organizations
This form is required when annual gross revenues are over $200,000 and/or total assets are over $500,000.
Form 990-F returns are required for Private Foundations.
Form 990-T is used to disclose and pay taxes on income over $1,000 the organization received from unrelated trade or business activities. This form is file with either the applicable 990, 990-EZ or 990-N.
When deciding which forms to use don’t hesitate to bring your accountant into the conversation. For more information on how Henry+Horne can help with your finances, head over to the Accounting Services page.