Do you want to help build your community or give back to society? Maybe you’d like to help raise money for public oureach or medical research. For many people, the way to accomplish this goal is to establish a nonprofit organization. Nonprofits are tax-exempt, and can provide tax deductions to its donors. Our office can help organize and manage your nonprofit organization, beginning with a determination of whether your idea is eligible for nonprofit status.
Tax-exempt status under § 501(c)(3) is available to groups organized and operated for religious, charitable, scientific, educational, or literary purposes. Once you determine the purpose of your nonprofit organization, we can help guide you through the steps necessary to properly establish and maintain your nonprofit:
- Reserving your corporate name with the California Secretary of State;
- Choosing the initial directors for the corporation;
- Preparing and filing the Articles of Incorporation;
- Obtaining a Minute Book, in order to comply with corporate formalities;
- Drafting and formally adopting Bylaws for the corporation;
- Establishing an agenda for the Board of Directors’ first meeting;
- Filing initial registration forms and a Statement of Information with the State of California;
- Obtaining an Employer Identification Number with the Internal Revenue Service;
- Applying for federal tax-exempt status under IRC § 501(c)(3);
- Applying for state tax-exempt status with the California Franchise Tax Board; and
- Helping you maintain and govern your nonprofit to preserve tax-exempt status.
Once your nonprofit organization is established, you must continue to satisfy corporate formalities and filing requirements in order to maintain tax-exempt status. For practical purposes, many of the governance requirements for tax-exempt maintenance are contained in Form 990, a document that each nonprofit must file with the IRS. There are several versions of Form 990 which require varying levels of detail.
Charities with gross annual receipts less than $50,000 may file Form 990-N, which is often a simple “e-postcard” filed electronically. Organizations with gross receipts under $200,000 and less than $500,000 in total assets may file either a standard Form 990, or the simplified Form 990-EZ. Any organization with gross receipts that equal or exceed $200,000, or total assets that exceed $500,000, must file the full version of Form 990 and any applicable schedules. A private foundation must file Form 990-PF regardless of annual receipts or total assets.
If you are interested in forming a nonprofit and don’t know where to start, or if you are currently on the Board of Directors and need competent advice or assistance with maintenance of tax-exempt status, please contact our office today. .