How We Support Non-Profit Organizations’ Tax Needs
Being a 501c3 tax-exempt organization does not mean that your NFP doesn’t need a CPA. Nonprofit organizations are subject to specific tax rules and regulations that are different from those that apply to for-profit businesses. As a result, the tax preparation needs of nonprofit organizations are unique and require specialized knowledge and expertise. We understand the critical role that nonprofits play in our communities, and we are dedicated to helping our not-for-profit clients fulfill their missions.
Tax Compliance
Some of the special needs of nonprofit organizations when it comes to tax preparation include:
- Filing Form 990: Nonprofit organizations are required to file Form 990, which is an information return that provides the IRS with information about the organization’s activities, finances, and governance. Form 990 is a complex document that requires a thorough understanding of nonprofit accounting and reporting requirements.
- Compliance with tax-exempt status requirements: Nonprofit organizations must comply with the requirements for maintaining their tax-exempt status, which includes meeting specific organizational and operational requirements. Failure to comply with these requirements could result in loss of tax-exempt status, which could have significant financial consequences for the organization.
- Understanding unrelated business income tax (UBIT): Nonprofit organizations are generally exempt from paying taxes on income earned from activities that are related to their tax-exempt purpose. However, if a nonprofit organization earns income from an activity that is not related to its tax-exempt purpose, it may be subject to unrelated business income tax (UBIT). Understanding the rules and requirements for UBIT is essential to ensuring compliance with tax regulations.
- Managing contributions and donations: Nonprofit organizations often receive contributions and donations from individuals and other organizations. The tax treatment of these contributions and donations can be complex, and it is important to ensure that they are properly accounted for and reported.
- Compliance with state and local tax regulations: Nonprofit organizations may be subject to state and local tax regulations, which can vary widely depending on the jurisdiction. Understanding these regulations is essential to ensure compliance with all applicable tax requirements.
In order to meet these unique tax preparation needs, it is essential to work with a CPA firm that has experience working with nonprofit organizations. A qualified CPA can help ensure that your nonprofit organization is in compliance with all tax requirements, and can provide guidance and support to help your organization achieve its financial goals.
Get on board!
- Initial consultation: We have an initial consultation to discuss your business’s needs, goals, and challenges. We ask questions about your business’s financial history, current operations, and future plans.
- Engagement letter: If both parties agree to move forward, we will provide an engagement letter that outlines the scope of services, fees, and other terms of the engagement.
- Gathering information: We request information and documents such as financial statements, tax returns, and other relevant records.
- Setting up software and systems: We set up any necessary accounting software or systems, such as QuickBooks, to manage the business’s financial data.
- Establishing communication protocols: We establish communication protocols, such as how often we will meet or have phone calls, and how we will share information and updates. We may also provide guidance on how to organize financial documents and records for easy access.
- Developing a plan: Based on the information gathered and your goals and needs, we develop a tax plan.
- Ongoing support: We provide ongoing support and guidance to our clients, answering questions and providing advice on financial matters. We also review the business’s financial records periodically to ensure accuracy and compliance.
How We Work
How we start our engagements and conduct them ongoing