Why Do 501c3 Nonprofit Organizations Need to File Form 990?

Why Do 501c3 Nonprofit Organizations Need to File Form 990?

As the tax season comes about, nonprofit organizations often find themselves confused about what they need to file, the type of books they need to maintain, audit requirements, and more. On the other hand, nonprofit bookkeeping services are busy helping their clients collect all the necessary documents, particularly those needed for Form 990.

The deadline for Form 990 is the 15th day of the 5th month of the 501c3 nonprofit organization’s fiscal year. For normal tax years, this means November 15 of every year, and for calendar years, it would fall on May 15.

501c3 Nonprofit Organization Form 990 Requirements

Preparation of Form 990 is best left to nonprofit bookkeeping services to ensure nothing is missed; this is because of the extensive requirements for the form. Here are the requirements for you to consider:

  1. A reconciled bank statement, credit card statement, and investment accounts. The accounting records of the organization must reflect every activity as per the statements.
  2. An accounts receivable report.
  3. An accounts payable report.
  4. A comparison of these reports as per the Statement of Financial Position (SOFP) or balance sheet.
  5. Fixed asset listing
  6. Disclosure for any new asset purchased or disposed during the financial year.
  7. All grant documents along with a detailed review of portions still available or those portions reserved for specific tasks.
  8. A detailed overview of all income sources.

These may seem like simple requirements but, as your nonprofit grows, discrepancies are most likely to grow. You may need professional help and other things depending on the state you operate in.

Remember, any material issue in these statements may lead to fines/penalties, reviews, tax audits, or, worse, license suspension. Good Stewart Financial Company is here to help you make sure everything is recorded properly and accurately and to ensure smooth financial operations on your part. Give us a call for a quick consultation and to see how we can help!