What do nonprofit organizations need to know about the new Form 990?
The IRS has revised the Form 990 effective for the 2008 tax year (returns to be filed in 2009). This is the first major revision in almost 30 years to the annual information return filed by most U.S.-based tax-exempt organizations. According to the IRS, the redesigned 2008 Form 990 should "enhance transparency, promote tax compliance, and minimize burden" for reporting organizations.
The new Form 990 includes an 11-page core form and 16 schedules, many of which are entirely new. Here are some highlights of the important changes:
All charities must file at least some version of the Form 990 each year. Under the old rules, charities with annual gross receipts under $25,000 did not need to file a return. Now these organizations will be required to file the new Form 990-N, or "e-Postcard," to report basic information on the organization.
The revised Form 990 encourages nonprofits to explain their mission, their program accomplishments, and provide more information that is not strictly financial.
There are new or expanded reporting requirements related to topics like governance, compensation, related organizations, joint ventures, endowments, and revenue sources.
The new Schedule G is used for reporting fundraising activities in detail, including professional fundraising services, fundraising events, and gaming.
Revenue now must be reported under a number of categories such as federated campaigns, membership dues, fundraising events, grants, and other contributions. Non-cash contributions (or in-kind gifts) totaling more than $25,000 are reported separately on the new Schedule M.
The following web sites include useful resources for learning more about the changes to Form 990 and how they will affect your nonprofit:
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