QuickStart guide

990EZ Filing Instructions (in progress — for future release)

Sandra Pfau Englund

Oct 07, 2019

This document is designed to be a how-to manual for drafting the 990EZ. There are multiple ways to complete the form. We are going cover our approach, while also highlighting some of the common mistakes we see.

If your organization files the 990 FULL, please use our webinar as your guide and primary resource.

Form 990EZ can be downloaded from the IRS website, or by doing a general internet search for IRS Form 990EZ. Accounting software is not required, but it can help to catch a lot of the immediate mistakes that result in a rejected return. For this reason, we recommend Form990.org.

The 990EZ itself is 4 pages long. There are 16 different attachments called Schedules which run alphabetically, A – R. Booster clubs generally only need to be concerned about Schedules A, B, G, and O.*

* This is important to remember, as the most common mistake our members make is forgetting to attach the Schedules. See below for an informed explanation:

• Schedule A – Financial history and public charity test.
• Schedule B – Individual donations of over $5,000.00.
• Schedule G – Fundraising income if over $15,000.
• Schedule O – Notes for various parts of the 990EZ.

How to use this manual

This manual is organized to guide you through per each section of the 990EZ. First there will be an explanation of the section, then it will explain line by line what each question is asking. We will also instruct when an answer will trigger a Schedule to be completed.

There are various items that are marked with an asterisk (*). Please pay careful attention to the disclaimer section at the end of the manual.

Accounting method

This manual takes the assumption that whoever is using it is on a cash-based accounting system – meaning that the only transactions to be concerned with are what has hit the bank account during the fiscal year. Cash-based accounting would not include an invoice that came in 3 days prior to the close of a fiscal year but did not posy until two days after FYE. Please see the [definitions; link to be provided] page for more help.

Part I: Revenue, Expenses, and changes in Net Assets

The first section of the 990 is the basic information about the organization. It should include the organization’s name, address and EIN number. It is important to read the boxes on the left-hand side and check anything that is appropriate. On the right-hand side you will mark that your organization is a 501(c)(3); it is NOT a group return. The Group Exemption Number is 5271.

<img src="" alt="990ez filing instructions">

Revenue, Lines 1-9:

The first section is in regards to gross revenue. Revenue is different than receipts. Gross receipts are what determine what tax form should be filed. These are the total amount of money that come into the organization. The easiest way to think about this is total deposits that were made. The only real exception to the rule is money that was withdrawn for a cash box, then deposited again.

Gross revenue (G) refers to gross receipts (R) – fundraising costs (F) – merchandise sales (M) – asset sales (A).

G = R - F - M - A

Line 1 – Contributions:

A contribution is a donation or grant that is given to the organization with nothing in return. Take the example of a concession stand that is selling merchandise. On the concession stand there is a bucket (donations) for people to drop money in that may not want to purchase anything, however, still have the desire to give. This practice is considered a contribution. Contributions/donations are money or grants given with no expectation of a return.

Line 2 – Program Service Revenue:

Program service revenue can be treated in one of two ways: the programs can either be notated on line 2 or on line 8 where you will also make a note in Schedule O. It refers to income that is related to the organization’s exempt purpose.

These are occurrences like banquets, field trips, competitions, and other similar activities. This does get into a grey area because money taken from the members for a field trip can also go under line 3.

Line 3 – Membership dues:

These are funds paid by the members. There are two different situations we see with our members – the first is membership fees*. This is the fee required to be an acting member, usually paid at the beginning of the school year or season.

The second type is money taken from the members mid-year to make a single payment for all the students for a hotel, bus, competition, or the similar.

The first type will always be a membership fee, while the second type is a little more flexible and can go under membership fees or on line 8 (make a note in Schedule O).

Line 4 – Investment income:

The easiest way to think about this is money related to a bank. It is not uncommon to have money sitting in a savings account. In these cases, the interest earned should be input on this line. Some of our members use a credit card with a rewards system, that may go here as well. It is unlikely that this will cause problems for any of our clients. If this line is over $1,000 per fiscal year, it is considered taxable income*.