Picture this: Your nonprofit’s tax forms are due, and you’re in a caffeinated frenzy trying to get everything together in time. With the deadline looming and a headache coming on, you’re still frantically Googling how to fill out and file the specific form you need to turn in.
If this scenario feels a little too close to home, you’re not alone. Most nonprofit professionals have been in this boat before. After all, very few people look forward to tax season.
And just because nonprofits qualify for tax-exempt status, that doesn’t mean tax season gets any easier. Nonprofits that are registered as 501(c)(3) organizations are required to continuously file tax forms in order to maintain that precious tax-exempt status. This status is what allows you to reinvest all of your revenue back into your cause (rather than paying it in taxes), or to take advantage of special nonprofit-specific opportunities like applying for a Google Ad Grant. This means that when it comes to this year’s tax season, your nonprofit will need to know which 990 form to file and how to file it.
Luckily, there are plenty of software solutions out there that can make the process of filing your form much less stressful than the scenario described above. In this guide, we’ll walk you through everything you need to know about nonprofit tax filing and recommend Form 990 software providers that can make the process even easier. Specifically, we’ll cover:
- Introduction to Form 990 Tax Documents
- 3 Benefits of Investing in Form 990 Software
- Key Features to Look for in Form 990 Software
- Our Form 990 Software Top Picks
Tax season doesn’t have to be something you dread, and with some know-how and the right tools, you can make it much easier for yourself. If you’re ready to sleep soundly the night before your nonprofit’s tax forms are due, this is the guide for you! Let’s jump in.
Introduction to Form 990 Tax Documents
Even within the shared 501(c)(3) status of nonprofit organizations, there is still a degree of nuance in the tax filing process. Different nonprofits qualify to file different versions of the Form 990 depending on their gross receipts throughout the year.
The different options include the 990-N, 990 EZ, Standard 990, 990 T, and 990-PF forms, and figuring out which form your organization qualifies to file can sometimes be one of the roadblocks to a hassle-free tax season. In this section, we’ll walk you through each form so you know which one your organization needs to file.
The 990-N form (also known as the 990 postcard) is the easiest form to fill out and file. It’s an electronic-only form with just eight questions. Your organization qualifies to file a 990-N form if you had gross receipts of less than $50,000 over the financial period. Some organizations can’t file a 990-N, such as church-affiliated or politically-affiliated organizations.
To read more about the restrictions and limitations for what types of organizations can file a 990-N form, check out this IRS user guide.
The 990 EZ form is a four-page form that is a step above the 990-N form and the little brother to the Standard Form 990. Organizations that qualify to fill out a 990 EZ form are those with gross receipts greater than $50,000 but less than $200,000. To qualify, these organizations must also have less than $500,000 in total assets.
Check out File 990’s comprehensive guide to the 990 EZ form to learn more.
The qualifications for filing the standard 990 form are fairly straightforward. Your organization will fill out a 12-page standard form if you have greater than $200,000 in gross receipts or greater than $500,000 in total assets.
If your organization earns more than $1,000 in gross income from an unrelated business during the financial period, you will need to file a 990-T form.
Note that if you need to file the 990-T form, you still have to file your normal 990 form as well — whether that be a 990-N, 990 EZ, or Standard 990 form.
The 990-PF form is a specialized form. Only organizations that are registered as private foundations are required to fill out a 990-PF form. They’re required to do so regardless of financial status. The 990-PF form requires information about your organization’s assets, financial activities, trustees and officers, and grants awarded during the financial period.
Form 990 Bonus Tip
Did you know that the IRS requires all nonprofits to make their Form 990 available to the public? This helps organizations stay accountable to their donors, volunteers, sponsors, and constituents. Remember that because of the public nature of these documents, you should avoid putting personal information on them.
3 Benefits of Investing in Form 990 Software
The importance of filing the correct tax form and meeting your respective deadlines are clear. But many nonprofit professionals prefer to rely on the help of Form 990 software to make sure the job gets done right. Form 990 software, also known as an e-filer, can help eliminate guesswork and ensure your forms get to the IRS on time.
However, some nonprofit organizations may wonder whether investing in an e-filer is worth it. Let’s dive deeper into three benefits of leveraging this software.
1. Form 990 software can help you fill out your form completely and correctly.
The government doesn’t necessarily want to let organizations go without paying taxes. After all, taxes are the federal government’s primary source of revenue. This means filing your Form 990 is your chance to prove to the government that your organization deserves to maintain your tax-exempt status, freeing up the money your organization pulls in to be allocated for your cause.
If you don’t fill out your Form 990 completely, or the information on it is incorrect, you could receive a Letter 295C returning your form due to the missing information.
That’s where an e-filer comes in. Form 990 software works by asking your organization’s finance manager a series of questions about your organization to auto-fill the necessary parts of the 990 form you need to file. This means fewer mistakes, less stress about your status, and more time to focus on the work that matters to your organization the most.
2. Form 990 software keeps your information secure.
In today’s world, you can never be too careful with sensitive information, whether you’re collecting donations with an online platform or filing your taxes. Filing your Form 990 will require you to work with your organization’s sensitive information, and as a responsible nonprofit professional, you should do all you can to prioritize the security of that information.
An e-filer certified by the IRS will protect the information you input on your tax forms, and ensure secure processing when you submit the forms to the IRS. Avoid using any “free” or suspicious-looking online tax services that neglect security and put you and your organization at risk.
3. Form 990 software can help you file your tax forms on time.
No matter what form your nonprofit is responsible for filing, make sure to mark your calendar so that you meet your deadline. Missing your filing deadline can result in a range of consequences from the IRS, from $20 late fees per day it’s late to losing your tax-exempt status altogether.
Since the last thing you want to do is put yourself on track to not being able to further your cause, being strict with your deadlines is crucial. There are two that you need to mark on your calendar:
- The Form 990 deadline: Unlike the individual U.S. taxpayer deadline scheduled during April, your organization actually has its own personalized deadline. This is determined by when your fiscal year ends, and you need to file your 990 form by the 15th day of the 5th month after the end of that fiscal year. If your organization’s fiscal year matches the calendar year, your deadline would be May 15.
- The Form 990 extension deadline: Meeting the original Form 990 deadline is ideal (because who wants to have taxes hanging over their head for longer than is necessary?), but not all is lost if you know your organization needs more time. If that is the case, you’ll need to file a Form 8868 by your original Form 990 deadline. When your extension is approved, you’ll have an additional six months from your original deadline to get your forms in to the IRS. Be aware that you cannot ask for an extension with the Form 990-N (990 postcard).
Having these deadlines on the calendar can motivate you and your team to prepare for tax season well in advance. Even better, a nonprofit tax software solution can send you a reminder after your nonprofit’s first filing. This will help you make sure you get the correct 990 form submitted on time going forward. These reminders are often emailed and sent automatically to your treasurer or finance manager.
The overarching benefit of relying on an IRS-certified e-filer is the stress it will save you come tax season. Form 990 software saves you time and money that could otherwise be spent on costly penalty fees. In the end, Form 990 software empowers you to get back to the real work of your nonprofit instead, whether that’s planning ahead for your end-of-year campaign or cultivating relationships with major donors.
Key Features to Look for in Form 990 Software
When you file your tax forms using Form 990 software, it’s imperative that you conduct some research before committing to a software solution. After all, you’ll ideally be filing using that software for years to come. You’ll want to make sure you choose the best solution to meet your organization’s needs.
Let’s explore the key features to look for in your software options.
The first priority for your nonprofit should always be security. You need to be sure that all of your important tax information is filed through a secure submission process.
Before submitting any of your financial information to an online provider, be sure that you’re using an authorized e-filer. If you’re unsure whether your e-filer is legitimate, double check with the IRS.
IRS authorization ensures that your nonprofit’s information will go straight to the IRS and that it will be in good hands. Also, check to make sure the information you submit is safe in the e-filer’s network. Look for one with bank-level security.
The whole point of using nonprofit tax software is to make filing tax information easier for your organization. Make sure the solution you’re considering is easy to use!
Generally, the best Form 990 software on the market will ask users a series of simple questions and then fill out the form based on the user’s responses, making filing a piece of cake.
Filing to maintain your tax-exempt status is a method of saving money for your nonprofit that can then be used to serve your constituents. So why would you overpay to save that money?
Look for a nonprofit tax software solution that offers straightforward and dynamic pricing so that you know exactly what your nonprofit will pay before you invest. This will help you factor the cost of your solution into your organization’s budget.
Most nonprofit professionals wind up having (at least) a couple of questions about their tax software or their forms. However, the majority of software providers are not authorized to explicitly offer advice about your tax filing. When you look for a provider, make sure to find one with:
- Contact information for software questions: When you come across questions about the software itself, you should be able to easily call, email, or otherwise contact your provider.
- A referral network of accountants: Even if your software provider can’t answer specific questions about tax information, they may have references that can answer those questions. Plus, those references won’t only know general nonprofit tax information, but they’ll also be familiar with the software you’re using — win/win!
Keep in mind that you can always get answers to your questions right from the source too! The IRS provides information on their website about nonprofit tax filing, or you can always call them at 1-(800)-829-4933.
Component / Chapter Filing Management
Some nonprofits have dozens or even thousands of chapters and components that have to file their own tax forms come tax season. This can be a lot to manage on your own.
Look for an e-filer that will track the filing status of each of your organization’s components. The right e-filer can let you know which components are at risk of losing their tax-exempt status so you can assist them in getting their forms filled out and turned in. Some e-filers will even send reminder emails to all of your components to assure that everyone knows when it’s time to file.
A solution with all of these features will be well worth the investment. Do thorough research before investing in an e-filer so you can learn all about what it has to offer.
Our Form 990 Software Top Picks
Are you unsure of where to start looking for an e-filer that is right for your organization? Check out this list of recommendations. Then, you’ll be well on your way to a stress-free tax season!
The Best Form 990 Software: File 990
File 990 is a safe and secure tool that helps your nonprofit file its 990-N or 990 EZ form. When you first log into the software, all you’ll need to do is enter in your nonprofit’s Employer Identification Number (EIN).
From there, File 990 will pull information from the IRS database based on your EIN and then ask a series of questions to help you fill out the remainder of the form.
This software offers features such as:
- Email reminders to file your 990 form based on your saved fiscal period.
- Bank-level security to keep your organization’s information safe.
- Trackable failed returns.
- Instant verification of accepted returns.
File 990 Pricing
File 990 believes in a straightforward, transparent approach to pricing. You can file your 990-N form for $49.99 per filling or your 990 EZ form for $69.99 per filing. File 990 also offers enterprise pricing for large organizations.
TaxAct offers a wide variety of forms that many different organizations can use. They provide simple guidance through the process of filing your 990 form.
This provider is perfect for organizations that have political and religious affiliations (who may not be eligible for 990-N or 990 EZ forms) because TaxAct offers such a wide variety of forms.
TaxAct also offers features such as:
- Printable backup copies of tax forms.
- Alerts for errors or omissions in your filing.
- Bookmark capabilities to save questions to return to later.
TaxAct’s software is $109.95 to download.
Aplos offers a complete suite of financial management software that can help your nonprofit file your 990 form as well as create budgeting plans.
Aplos is a great IRS-authorized e-filer for nonprofits who already use Aplos for their other financial management needs.
This nonprofit tax software offers features such as:
- Receipt and acceptance confirmations.
- Status checks by entering your nonprofit’s EIN into their database.
- 990 tags that you can use in your accounting books to mark specific transactions for easy 990 reporting.
Contact Aplos for information about pricing.
ExpressTaxExempt offers filing for a variety of forms without requiring a subscription or download.
ExpressTaxExempt is a fantastic e-filer for nonprofits who need to file additional forms other than their 990-N or 990 EZ forms.
This nonprofit tax software offers features such as:
- Filing options for 990-PF, 990-T, and 8868 forms.
- Top-notch customer service.
- Transparent pricing.
Filing a Form 990-N with ExpressTaxExempt costs $19.90 per return, and filing a Form 990 EZ costs $99.90 per return.
As you work to find the right e-filer for your organization, consider your budget and your organization’s unique needs. This will help you find Form 990 software that you can use to file your tax forms for years to come, ensuring you’re able to keep moving your mission forward.
Form 990 software is designed to help ease the burden of tax season for nonprofit organizations. And when tax season is stress-free, you’ll have an easier time filing the right form on time and maintaining your tax-exempt status. This status is critical, because it enables you to keep doing good in the world, from hosting fundraising events to finding meaningful ways to thank your donors. Your Form 990 software can help you never forget to file again, and will ensure your Form 990 is always complete before it goes to the IRS.
Nonprofit software solutions, like Form 990 software, can help your organization streamline its operations and succeed in its work. To learn more about nonprofit software options, check out these resources:
- Top 18+ Fundraising Software Solutions for Your Nonprofit. Fundraising drives your mission. Learn about the top fundraising tools that can help you pull in more support.
- 11 Best Online Auction Software & Bonus Tools. Getting ready to host an online auction? Prepare for a lucrative fundraising event by checking out these essential tools.
- Matching Gift Software Vendors: The Comprehensive List. Matching gift software empowers your organization’s donors to increase their impact. Check out this list of software vendors to get started.