FAQ

https://www.thetaxadviser.com/news/2021/oct/irs-guidance-llc-tax-exempt-recognition.html

Nonprofit bookkeeping is keeping track of money for organizations that help others. It makes sure they know how much money comes in and goes out.

Nonprofits need bookkeeping to see if they are using their money well. It helps them pay bills, buy things they need, and show others how they spend their money.

A bookkeeper helps by writing down all the money that comes in and out. They also help make reports that show how the organization is doing with its money.

Nonprofits should do bookkeeping regularly, like every month. This helps them stay organized and know their money situation.

Nonprofits can use special software to help keep track of their money. Some popular tools are QuickBooks, Wave or simple spreadsheets.

Can Galloway Tax Express help with nonprofit bookkeeping? Yes! Galloway Tax Express helps nonprofits keep their money organized. We can take care of bookkeeping so they can focus on helping others.

If a nonprofit doesn’t do bookkeeping, they might lose track of their money. This can cause problems, like not knowing if they have enough money to pay their bills.

A budget is a plan for how to spend money. Nonprofits need a budget to decide how much money they can spend on things like events or supplies, so they don’t run out of money.

A donation is money that people give to help a nonprofit. Bookkeeping helps track all the donations to make sure the nonprofit knows how much they have to spend.

Receipts are pieces of paper that show what was bought and how much it cost. They are important because they help nonprofits remember what they spent their money on.

An income statement is a report that shows how much money a nonprofit made and spent over time. It helps them see if they are saving or losing money.

Bookkeeping helps keep all the money information organized, which makes it easier when it’s time to file taxes. Nonprofits need to show how they used their money to stay tax-exempt.

Yes! Volunteers can help with bookkeeping, but it’s important they know how to keep track of money correctly. Having someone who knows bookkeeping or accounting well is very helpful.

A financial report is a paper that tells how a nonprofit is doing with its money. It shows how much they have, how much they spent, and if they are saving money. Nonprofits share this report with donors and supporters.

https://www.irs.gov/charities-non-profits/automatic-revocation-of-exemption

https://www.irs.gov/charities-non-profits/annual-filing-and-forms

https://www.irs.gov/charities-non-profits/application-process

https://www.irs.gov/charities-non-profits/charitable-organizations/life-cycle-of-a-public-charity-private-foundation

https://www.irs.gov/charities-non-profits/subscribe-to-exempt-organization-update

https://www.irs.gov/charities-non-profits/types-of-tax-exempt-organizations

Nonprofit organizations have several federal tax obligations to maintain their tax-exempt status and comply with IRS regulations. These obligations include applying for tax-exempt status with Form 1023 or 1023-EZ, filing annual information returns like Form 990, 990-EZ, or 990-N, and adhering to employment tax requirements if the nonprofit has employees. Maintaining accurate records and following donor acknowledgment guidelines are also essential to complying with IRS regulations. Galloway Tax Express specializes in nonprofit tax services and can assist your organization with all these federal tax obligations. Our expert team will help you correctly file for tax-exemption, prepare and submit your annual returns, and ensure you meet all necessary employment tax and record-keeping requirements. By partnering with Galloway Tax Express, you can focus on your mission while we handle the complexities of nonprofit tax compliance.

To ensure your nonprofit organization maintains its tax-exempt status, follow these critical guidelines: 1. Operate Exclusively for Exempt Purposes: Your activities should be in line with the stated purposes in your articles of incorporation, which should align with the IRS’s category of exempt purposes, such as charitable, educational, or religious missions. 2. Maintain Detailed Records: Keep thorough records of all your financial activities, including donations, expenses, and operational costs. This will assist in preparing accurate annual filings and demonstrate your ongoing compliance. 3. File Required Annual Returns: Most tax-exempt organizations are required to file Form 990 annually. Failing to do so for three consecutive years will result in automatic revocation of your tax-exempt status. 4. Avoid Political Campaign Activity: Nonprofits, particularly 501(c)(3) organizations, must strictly avoid any participation in political campaigns on behalf of (or in opposition to) any candidate for public office. 5. Understand Unrelated Business Income Tax (UBIT): Income from activities unrelated to your exempt purposes may be subject to UBIT, and you must file Form 990-T for such income. Make sure to structure your profit-generating activities carefully. 6. Regular Compliance Reviews: Periodically review your operations and governance practices to ensure continuous compliance with IRS requirements. This includes maintaining a clear separation between the nonprofit's funds and any personal or business expenses of its leaders. Galloway Tax Express can help streamline this process by offering specialized nonprofit tax services and guidance, ensuring your organization remains in good standing. With our expertise in filing Form 990 and understanding the intricacies of nonprofit tax regulations, you can focus on your mission while we handle the compliance details.

https://www.irs.gov/charities-non-profits/tax-exempt-organization-search

https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-solicitation-state-requirements

https://www.irs.gov/charities-non-profits/exempt-organizations-affirmation-letters

https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers

To qualify for a 501(c)(3) tax-exempt status, a nonprofit organization must meet several specific criteria as outlined by the IRS. Firstly, the organization must be organized and operated exclusively for exempt purposes, such as charitable, religious, educational, scientific, or literary activities. Additionally, the organization's earnings should not benefit any private shareholder or individual, and it cannot engage in substantial lobbying or political campaign activities. Galloway Tax Express specializes in helping nonprofits navigate these requirements to secure and maintain their 501(c)(3) status. Our services include comprehensive assistance in preparing and filing the necessary documentation, ensuring that your organization meets all structural and operational criteria set by the IRS. We offer expert advice on maintaining compliance with ongoing reporting requirements to protect your tax-exempt status. Whether you're starting a new nonprofit or managing an established one, Galloway Tax Express provides the specialized support needed to streamline your tax preparation process and ensure adherence to 501(c)(3) regulations.

https://www.irs.gov/charities-non-profits/other-non-profits/social-welfare-organizations

https://www.irs.gov/charities-non-profits/charitable-organizations/wheres-my-application-for-tax-exempt-status

Starting a nonprofit organization involves several key steps, each requiring careful attention to detail to ensure compliance with federal and state regulations. According to the IRS publication "Starting a Business," the essential steps include: 1. Developing a Mission Statement: Clearly define the purpose of your organization and why it exists. 2. Forming a Board of Directors: Assemble a group of individuals who share your vision and can help guide the organization. 3. Creating Bylaws: Establish the rules and regulations that will govern the nonprofit. 4. Filing Articles of Incorporation: Register your nonprofit with the state to legally establish the organization. 5. Obtaining an EIN: Apply for an Employer Identification Number from the IRS, which is necessary for tax filing purposes. 6. Applying for Tax-Exempt Status: Submit Form 1023 or Form 1023-EZ to the IRS to be recognized as a tax-exempt entity under section 501(c)(3). At Galloway Tax Express, we specialize in nonprofit tax filing and can assist you throughout the startup process. Our services include initial consultations to understand your specific needs, assistance with state registration for your organization, and help with the application for tax-exempt status. Additionally, we offer ongoing tax preparation services to ensure that your nonprofit remains compliant with all federal and state tax regulations. By partnering with Galloway Tax Express, you can focus on your mission while we handle the complex tax requirements.

An Employer Identification Number (EIN) is a unique nine-digit number assigned by the IRS to identify a business entity, much like a Social Security number for individuals. For nonprofit organizations, having an EIN is crucial as it is used for a variety of purposes, including opening bank accounts, applying for tax-exempt status, and filing annual tax returns. When you use Galloway Tax Express's nonprofit tax services, having an EIN ensures that your tax filings and records are properly managed and submitted to the IRS, facilitating a smooth and compliant tax filing process. Our team is also available to assist with obtaining an EIN if your nonprofit is newly established or does not yet have one. This comprehensive support ensures your organization can focus on its mission while we handle the complexities of tax compliance.

https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes

https://www.irs.gov/businesses/e-file-employment-tax-forms

https://www.irs.gov/businesses/small-businesses-self-employed/self-employed-individuals-tax-center

The IRS recognizes several business structures, each with distinct legal and tax implications. The main types are: 1. Sole Proprietorship: Simple to establish, with the owner personally liable for debts. 2. Partnership: Involves two or more people, sharing profits and liabilities. 3. Corporation: A separate legal entity, providing limited liability but with potentially higher taxes and more regulatory requirements. 4. S Corporation: A special corporation that avoids double taxation, with income passing through to shareholders. 5. Limited Liability Company (LLC): Offers limited liability like a corporation but with the tax efficiencies and operational flexibility of a partnership. Galloway Tax Express specializes in startup business registration in North Carolina and can guide you through the selection process. Our experts will evaluate your business goals, financial situation, and personal liability preferences to help you choose the most suitable structure. Whether you need help with the paperwork or understanding the tax implications of each option, we streamline the process to save you time and ensure compliance with state and federal regulations. Contact us today to get started on the right foot with your new business!

According to the IRS guidelines, the primary factors to consider are categorized into three main areas: 1. Behavioral Control: Does your business have the right to direct and control how the worker does the task for which they are hired? If you have extensive control over the work process, the worker is likely an employee. For example, if you train the worker and dictate work hours, they would generally be considered an employee. 2. Financial Control: Does your company control the business aspects of the worker's job? This includes things like how the worker is paid, whether expenses are reimbursed, and who provides tools/supplies. Independent contractors typically have a significant investment in their work facilities and can realize a profit or incur a loss. 3. Relationship Type: Examining the relationship between the business and the worker is key. Factors include written contracts, whether the company provides employee-type benefits (such as insurance or pension plans), and the permanency of the relationship. Employees tend to have a more permanent work relationship, while independent contractors usually work on a temporary or project-by-project basis. Misclassification can lead to penalties and back taxes, so it's essential to get it right. If you need assistance with worker classification or other tax-related queries, Galloway Tax Express is here to help. We provide comprehensive support to ensure your nonprofit or startup adheres to all IRS guidelines and regulations. For more detailed information, you can also refer to the IRS' guide on Independent Contractor vs. Employee, available (https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee). Feel free to reach out to us for personalized advice tailored to your specific situation.

https://www.irs.gov/businesses/small-businesses-self-employed/business-tax-credits4

https://www.irs.gov/businesses/small-businesses-self-employed/deducting-business-expenses

https://www.irs.gov/businesses/small-businesses-self-employed/filing-and-paying-your-business-taxes

https://www.irs.gov/businesses/small-businesses-self-employed/recordkeeping

https://www.irs.gov/businesses/small-businesses-self-employed/industries-professions

What is a small business? A small business is a company that is not too big. It usually has a few employees and makes a certain amount of money each year. Small businesses can be anything from a bakery to a toy store!

Why are small businesses important? Small businesses are important because they create jobs and help our communities. They make things people need and want, and they often support local events and charities.

A: To start a small business, you need a good idea, a plan, and some money to get going. You should think about what you like to do and how it can help others. You can learn more about starting a small business on SBA.gov.w can I start a small business? To start a small business, you need a good idea, a plan, and some money to get going. You should think about what you like to do and how it can help others. You can learn more about starting a small business on SBA.gov.

Form 990 is a special paper that nonprofit organizations fill out to tell the government about their money. It shows how much money they made and spent.

Nonprofits need to file Form 990 to show they are using their money to help others. It helps keep them honest and shows people they can trust the nonprofit.

Most nonprofits that make over $50,000 a year have to file Form 990. Smaller nonprofits might have to fill out a simpler form called Form 990-EZ. Furthermore, all nonprofits benefit from filing Form 990-EZ.

Form 990 is usually due on May 15 each year. If a nonprofit needs more time, they can ask for an extension.

If a nonprofit doesn’t file Form 990, they can lose their tax-exempt status, which means they may have to pay taxes like a regular business.

Galloway Tax Express can help nonprofits fill out and file Form 990 correctly. We make sure everything is done on time and helps avoid mistakes!

What information do I need to fill out Form 990? To fill out Form 990, you need information about how much money you made, how much you spent, and what programs you have. You also need details about your board members.

Yes! Nonprofits can share their Form 990 with donors to show how they use their money. This helps people feel good about donating.

Nonprofits should keep copies of Form 990 for at least three years. This helps in case anyone has questions about their money later.

Form 990 is public, which means anyone can see it. This helps keep nonprofits honest, and people can check how their money is being used.

It’s not required to have an accountant or nonprofit tax professional, but it can be helpful! An accountant or nonprofit tax professional knows a lot about money and can help make sure everything is done right.

Form 990 is for larger nonprofits. Form 990-EZ is for smaller nonprofits, and Form 990-N, called the e-Postcard, is for very small nonprofits that make less than $50,000 a year.

Can I file Form 990 online? Yes! Nonprofits can file Form 990 online through the IRS website or using special software designed for taxes.

After filing, you will get a confirmation from the IRS. You can also check the IRS website to see if they have your Form 990 on file, which can post months from when you file.

You can find help on the IRS website IRS Form 990 or ask a nonprofit tax professional like Galloway Tax Express for help!