Row of colorful binders with filings from previous years

Filing Form 990

by Sandra Pfau Englund on Jan 24, 2019 12:46 pm

Time for a quiz. True or false – 501(c)(3) tax-exempt organizations do not have to file a tax return?

False! Tax-exempt organizations do not have to pay taxes on the money that they raise, but the IRS still wants to keep its eye on these groups, including how much money they are raising and what they are spending it on.

It wasn’t always this way, however. Reporting your income as a 501(c)(3) wasn’t required until Congress passed the Pension Protection Act of 2006 (https://www.gpo.gov/fdsys/pkg/PLAW-109publ280/pdf/PLAW-109publ280.pdf) making it mandatory that the IRS collect financial information from all tax-exempt organizations. Much of the reason was to keep an updated record of these organizations – things like address changes and contact information – and allow the IRS to delete inactive organizations from its master list of tax-exempt organizations.

What is Form 990 and when is it due?

When you and I file our personal taxes, we use some variation of Form 1040; a for-profit corporation files Form 1120. A tax-exempt group files a Form 990 and there are three types: 990N, 990EZ, or 990 full. All 990’s, no matter which you file, are due on the 15th day of the 5th month following the end of your fiscal year. For example, if your fiscal year runs January to December, your 990 tax return is due on May 15th; if your fiscal your runs from June to July, your 990 return is due December 15. Failure to file a 990 by its due date for three consecutive years will result in the IRS revoking your tax-exempt status.

Which form do I file?

The determining factor for which form to file is your gross income - the total amount your organization receives from all sources during its fiscal year, without subtracting any expenses.

  • If your organization raises $50,000 or less, you file Form 990-N, also known as e-Postcard.
  • For organizations with gross receipts above $50,000 but less than $200,000, and total assets are less than $500,00, form 990-EZ is used.
  • A Full 990 is required if the gross receipts are over $200,000, or your total assets are over $500,000.
What other information is reported on the 990?

The IRS wants to ensure the organization is worthy of sustaining its tax-exempt status. The form 990 requests information on how the organization is operated, the names of the officers, and anyone involved in its supervision. It’s in your best interest to keep a keen eye on your expenses, documenting if the purpose the expense supports your tax-exempt purpose or was a fundraising or administration expense.

So, the next time you hear someone say, “I don’t need to file a tax return because we are tax-exempt”, you can tell them in your deepest, darkest, scariest voice, “No one hides from the IRS. Not even tax-exempt organizations.”

FEATURED BLOG

Running an Effective Meeting

Sandra Pfau Englund

Aug 30, 2019

Booster club bylaws often reference Robert’s Rules of Order as the “rules” for managing a meeting. Have you ever read Robert’s Rules? It’s a good way to get a good night’s sleep!

O.k., so, having no rules leads to muddled, oftentimes chaotic meetings. On the other hand, using strict Robert’s Rules of Order can result in confusion or imbalance, dominated by those very few who understand Robert’s Rules. According to Sandra Englund, founder of Parent Booster USA, it’s far better to use a simplified form of parliamentary procedure. Using Sandy’s Simple Parlipro for Nonprofit Organizations, you provide a solid framework for your meeting that encourages everyone to participate and stops any one person from controlling it.

Meetings should not be all about the rules. According to David Gillig, Senior Vice President of Children's Hospital and Health Center in San Diego, a meeting should be 80% inspiration, learning and fun, and 20% business. Busy parents are more likely to attend if they feel as if they will gain something for themselves, and their kids, out of the meeting. We recommend that you start the meeting with something fun or educational — our parent engagement blog talks more about this.

Place reports at the end of the meeting; consider providing digital or written copies of reports that parents can read outside of the meeting. No one wants to sit through standard reports. One exception is financial reports. Always include the treasurer’s report. The treasurer’s report should include a written budget and a report that shows how money was raised and spent. Making bank statements available is a good way to help ensure accountability. You can read more on financial accountability here.

It’s good practice to put start times for each item on the agenda. This helps ensure that the meeting stays on track and flows effectively. It’s particularly important if you are discussing any controversial issues in which it is more likely that someone will filibuster! Having a rule that each person gets an opportunity to speak once, before anyone is given a second opportunity to speak, helps encourage more participation.

Below is a sample agenda to help you get the most out of your booster club meetings. Start your meeting by reviewing the agenda. This is where you can explain the “rules” you’ve set for the meeting, including for example, that you will work to stay on-time to help ensure that the meeting starts and ends accordingly. You can also mention here, or just before the Q&A time with the principal, that each person will be provided the opportunity to speak once before anyone speaks for a second time. The report time is kept brief to allow the bulk of time to be given to the information provided by the principal. Minutes need approved; although a little unusual, we included approving the minutes at the end to allow more time for the more important matters up front.

ABC Booster Club
Agenda
[DATE]
1. Call to order & Review of Agenda 6:00p
2. Guest speaker – Principal Melissa Everly discusses school remodel plan 6:05-6:25p
3. Q&A 6:25-6:35p
4. Financial report 6:35-6:45p
5. Other reports 6:45-6:55p
6. Approve minutes from prior meeting 6:55p
7. Next Meeting 6:59p
8. Adjourn 7:00p

Planning and structuring your meeting for success if the key to having an effective meeting.

YOU SUPPORT THEM, WE SUPPORT YOU

With PBUSA membership, we file all the IRS and state paperwork. We keep your booster club up and running year after year.

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