- Maintain your tax-exempt status.
- Keep accurate records.
- Use effective budgeting templates.
- Determine overlapping timelines.
- Prioritize your goals.
- Ask for help.
1. Maintain Your Tax-Exempt StatusConsider your personal budget. You likely factor in some extra funds around April and May to help you pay any taxes you owe. However, your nonprofit doesn’t need to worry about these taxes. As a 501(c)(3), your nonprofit qualifies as a tax-exempt organization. Instead of paying taxes, each year your nonprofit must file a Form 990 to maintain this exempt status. =&1=& Depending on your nonprofit and varying circumstances, these repercussions could look slightly different:
- If your nonprofit’s gross receipts are less than $100,000 and you’re late filing your 990, you’ll see a $20 penalty each day the 990 is late. If you continue to not file, this penalty will continue to grow until you’ve reached $10,000 or 5% of your income.
- If your nonprofit’s gross receipts equal more than $100,000 and you’re late to file your 990, the daily penalty jumps to $100 per day with a maximum charge of $50,000.
- If your nonprofit, no matter its size, fails to file your Form 990 three years in a row, your organization will lose its tax-exempt status. This means you’ll need to reapply for tax exemption and pay filing fees again.