All tax-exempt organizations must file a 990 series return with the IRS in order to remain compliant with the IRS and maintain their tax-exempt status. There are a variety of 990 forms intended for organizations of different sizes and types. This article will examine one of these 990 variants, Form 990-EZ.
What is Form 990-EZ?
Form 990-EZ is a shortened version of the long Form 990. It allows smaller nonprofits to report their annual information to the IRS without having to file a form with extra information.
The information reported on Form 990-EZ allows the IRS and the public to ensure that the organization is not abusing its tax-exempt status and to be informed of the organization’s activities and progress.
Depending on the type of organization and its financial activities, the filers may also need to fill out additional documents called Schedules. Additional Schedules may ask for in-depth details about information provided in the 990-EZ.
Who should file Form 990-EZ?
Form 990-EZ is a return form used by tax-exempt organizations under sections 501(c), 527, or 4947(a)(1) of the Internal Revenue Code whose,
- Gross receipts are less than $200,000 and greater than $50,000 during their tax year and,
- Assets are less than $500,000
What information do I need to file Form 990-EZ?
When you file Form 990-EZ Online, you’ll need to provide a lot of details required by the IRS. Starting from the financial data such as revenue and expenses to program services, all the information which you report on your 990-EZ return must be accurate. Here is a summary of the information required information
- Basic organization information such as name, address, and EIN
- Financial information such as revenue, expenses, assets, and liabilities
- Program service accomplishments
- Other IRS filings and tax compliance requirements
- Key personnel, governing body, and management details
When is the filing deadline?
Form 990-EZ is due on the 15th day of the 5th month following the end of the organization’s tax year. So, for organizations that follow the calendar tax year, the deadline to file 990-EZ for the 2022 tax year is May 15, 2023.
If this date falls on a weekend or holiday, the deadline will be pushed to the next business day.
In case the organization needs more time to file, a 6-month extension on the deadline can be obtained by filing Form 8868 before the original deadline.
Are there penalties for a late form?
Yes! Nonprofits can be penalized for filing a late form. Each day the form is late, a penalty of $20 will be incurred. This penalty cannot exceed $11,000 or 5% of the organization’s gross receipts for the tax year.
Larger nonprofits with gross receipts exceeding $1,129,000 can be penalized $110 a day with a maximum penalty of $56,000.
How can I file Form 990-EZ?
The IRS mandates that all 990 forms must be filed electronically. This means you will have to find an e-file provider to transmit your form through. The IRS authorizes certain programs through its e-file authorization program, so the best way to find a safe and reliable provider is to look for this verification.
Filing Form 990-EZ online can be challenging, but knowing the basics of the form can help you through the process. Gathering information ahead of time and reviewing your form before transmitting it to the IRS can help you immensely.
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