Instructions for Form 990 Return of Organization Exempt From Income Tax 2023 Internal Revenue Service

Because the free admission is a privilege that can be exercised frequently and is offered in both benefit packages, and the value of the T-shirts is insubstantial, Museum J’s disclosure statement need not value or mention the free admission benefit or the T-shirts. However, because the 25% gift shop discount to K’s employees differs from the 10% discount offered in the basic membership benefits package, J’s disclosure statement must describe the 25% discount, but need not estimate its value. If a taxpayer makes a payment to a charitable organization in a fundraising campaign and receives benefits with an FMV of not more than 2% of the amount of the payment, or $125, whichever is less, the benefits received have insubstantial value in determining the taxpayer’s contribution. A donee organization reports all income from donated qualified intellectual property as income other than contributions (for example, royalty income from a patent). A donee isn’t required to report as contributions on Form 990 (including statements) any of the additional deductions claimed by donors under section 170(m)(1). An organization described in section 170(c) (except a private foundation) that receives or accrues net income from a qualified intellectual property contribution must file Form 8899, Notice of Income From Donated Intellectual Property.

Instructions for Form 990

• For each amount entered on lines 11a, 11b, and 11c, the organization must also enter a corresponding business activity code from Business Activity Codes, later.
• D is also a partner in an accounting firm with 300 partners (with a 1/300 interest in the firm’s profits and capital) but isn’t an officer, director, or trustee of the accounting firm.
• On lines 1a through 1f, report cash and noncash amounts received as voluntary contributions, gifts, grants, or other similar amounts from the general public, governmental units, foundations, and other exempt organizations.
• Program service revenue includes income earned by the organization for providing a government agency with a service, facility, or product that benefited that government agency directly rather than benefiting the public as a whole.
• Filing a 990 form for your tax-exempt nonprofit organization may be annoying, but doing so regularly is in the best interest of your organization.
• Make an entry (including -0- when appropriate) on all lines requiring an amount or other information to be reported.

If the tenant’s activities are related to the organization’s exempt purpose, report rental income as program service revenue on Part VIII, line 2, and allocable occupancy expenses on line 16. However, if the tenant’s activities aren’t program related, report the rental income on Part VIII, line 6a, and related rental expenses on Part VIII, line 6b. Enter amounts for information technology, including hardware, software, and support services such as maintenance, help desk, and other technical support services. Also include expenses for infrastructure support, such as website design and operations, virus protection and other information security programs and services to keep the organization’s website operational and secured against unauthorized and unwarranted intrusions, and other information technology contractor services.

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Include payments by the organization to professional fundraisers of fundraising expenses such as printing, paper, envelopes, postage, mailing list rental, and equipment rental, if the organization is able to distinguish these expense amounts from fees for professional fundraising services reportable on line 11e. Enter the four largest dollar amounts on lines 24a through 24d and the total of all remaining miscellaneous expenses on line 24e. Don’t include a separate entry for “miscellaneous expenses,” “program expenses,” “other expenses,” or a similar general category on lines 24a–d.

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For example, a director who votes against giving an excess benefit would ordinarily not be subject to this tax. Activities undertaken to induce potential donors to contribute money, securities, services, materials, facilities, other assets, or time. Fundraising activities don’t include gaming, the conduct of any trade or business that is regularly carried on, or activities substantially related to the accomplishment of the organization’s exempt purpose (other than by raising funds). Enter the types and amounts of expenses which weren’t reported on lines 1 through 23. Include expenses for medical supplies incurred by health care/medical organizations.

If the organization is unable to distinguish between these amounts, it should report all such fees and amounts on line 11e. Section 501(c)(3), 501(c)(4), and 501(c)(29) organizations must report the total compensation and other distributions provided to disqualified persons and persons described in section 4958(c)(3)(B) to the extent not included on line 5. A payment by a governmental agency to a medical clinic to provide vaccinations to the general public is a contribution reported on line 1e. A payment by a governmental agency to a medical clinic to provide vaccinations to employees of the agency is program service revenue reported on line 2. On line 2f, enter the total received from all other sources of program service revenue not listed individually on lines 2a through 2e. 1771, Charitable Contributions—Substantiation and Disclosure Requirements, for more information on insubstantial membership benefits that need not be valued or reported.

• If the organization receives its mail in care of a third party (such as an accountant or an attorney), enter on the street address line “C/O” followed by the third party’s name and street address or P.O.
• Not just the “form” of the expense–like payroll, utilities, rent, or office supplies– but also the “function” of those expenses, meaning the purpose that expense serves in your organization.
• If “Yes,” complete and file Form 4720, Schedule K, to calculate and pay the tax.
• Parts I through XII of the form must be completed by all filing organizations and require reporting on the organization’s exempt and other activities, finances, governance, compliance with certain federal tax filings and requirements, and compensation paid to certain persons.
• 4302, A Charity’s Guide to Vehicle Donation; and the Instructions for Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes.Substantiation and disclosure requirements for charitable contributions.

Line 16 applies to private colleges and universities subject to the excise tax on net investment income under section 4968. All other organizations, including state colleges and universities described in the what does 990 mean first sentence of section 511(a)(2)(B), aren’t subject to this tax, and therefore check the “No” box on line 16, and go to Part VI. A private college or university will be subject to the excise tax on net investment income under section 4968 only if four threshold tests are met. Because the donor’s payment exceeds $75, the organization must furnish a disclosure statement even though the taxpayer’s deductible amount doesn’t exceed $75.

A six-month extension is available by filing IRS Form 8868 by the original due date of the return. If you’re struggling to produce financial statements that you can rely on or your internal team isn’t experienced enough to provide strong financial guidance, maybe it’s time to consider outsourcing your accounting and bookkeeping process to professionals. When learning how to read IRS 990, Part IX tells donors the story of how you spend the revenue you receive.

• The amount reported on line 10a must equal the total of Schedule D, Part VI, columns (a) and (b).
• Go to IRS.gov/Coronavirus for links to information on the impact of the coronavirus, as well as tax relief available for individuals and families, small and large businesses, and tax-exempt organizations.
• For a more detailed description of program service revenue, refer to the instructions for Part IX, column (B).
• Officers can include a president, vice president, secretary, treasurer, and, in some cases, a Board Chair.

See also Line 5, later, for additional individuals who must be reported on Schedule J (Form 990), Part II. If the organization files Form 990 based on a fiscal year, use the fiscal year to determine the organization’s “current” officers, directors, and trustees. Whether or not the organization files Form 990 based on a fiscal year, use the calendar year ending with or within Bookkeeping for Veterinarians the organization’s tax year to determine the organization’s “current” key employees and five highest compensated employees.

Enter how is sales tax calculated -0- if the organization didn’t file any such forms for the calendar year ending with or within its tax year, or if the organization is filing for a short year and no calendar year ended within its tax year. In addition, the organization must generally report activities of a disregarded entity or a joint venture on the appropriate parts or schedules of Form 990. For special instructions about the treatment of disregarded entities and joint ventures for various parts of the form, see Appendix F. In general, the aggregate compensation that is reported (or required to be reported, if greater) in box 1 or 5 of Form W-2 (whichever amount is greater); box 1 of Form 1099-NEC; and/or in box 6 of Form 1099-MISC, for the calendar year ending with or within the organization’s tax year.