Overview of Form 990 for 2017
Form 990 for 2017 is a crucial document that nonprofit organizations in the United States must file annually with the IRS. This form is primarily utilized by organizations that are exempt from income tax under section 501(c) of the Internal Revenue Code, as well as those under sections 527 and 4947(a)(1). The form provides vital information about the organization's financial health, governance, and compliance with federal laws.
Key components included in Form 990
- Financial Reporting: Organizations outlines their revenue, expenses, net assets, and cash flow.
- Governance Details: The form requires insights into the governing body, policies, and procedures in place.
- Program Services: Organizations must report on their mission-related activities and accomplishments.
- IRS Compliance: The form includes disclosures related to governance policies, practices, and adherence to IRS regulations.
Importance of Filing Form 990
Filing Form 990 is essential for maintaining tax-exempt status, as it demonstrates an organization's adherence to federal regulations. Non-compliance can result in penalties and, in extreme cases, loss of tax-exempt status.
How to Use Form 990 for 2017 Effectively
Organizations can leverage Form 990 not only for tax compliance but also as a strategic tool for transparency and accountability. To utilize Form 990 effectively, understanding its sections and requirements is essential.
Navigating the Form
- Part I: Summarizes the organization’s mission and key financial figures.
- Part II: Provides details on the governance and management processes.
- Part III: Discusses the organization’s program service accomplishments.
- Part IV: Includes a checklist of required schedules and attachments.
- Schedule A: Focuses on public charity status and public support.
Strategies for Effective Use
- Use the form to communicate the organization’s impact and efficiency to stakeholders.
- Regularly review past filings to stay consistent with reporting practices.
- Employ the form as a marketing tool to enhance donor confidence and attract funding.
Steps to Complete Form 990 for 2017
Completing Form 990 requires careful attention to detail and thorough understanding of each component of the form. The following steps outline a systematic approach to filling out Form 990.
Step-by-Step Completion Process
- Review IRS Instructions: Begin by carefully reading the IRS instructions for Form 990 for 2017 to understand specific filing requirements.
- Gather Required Documents: Collect relevant financial statements, governance documents, and previous Form 990s for consistency.
- Fill Out Basic Information: Complete the organization’s name, address, EIN, and reporting period.
- Complete Financial Sections:
- Use recent financial records to accurately report revenue and expenses.
- Ensure that net assets align with reported financial statements.
- Detail Governance and Management Policies: Include descriptions of board members, governance practices, and compensation for key employees.
- Describe Program Services: Clearly articulate the organization's mission-related activities and their outcomes.
- Review for Accuracy: Conduct a thorough review to ensure all sections are correctly completed before submission.
Important Considerations for Filing Form 990
Filing Form 990 is accompanied by strict deadlines and requirements that organizations must adhere to in order to avoid penalties.
Filing Deadlines and Important Dates
- Filing Due Date: Form 990 must be filed on the 15th day of the fifth month after the end of the organization's fiscal year. For most organizations operating on a calendar year, the deadline is May 15.
- Extension Requests: Organizations can apply for an automatic six-month extension using Form 8868.
Penalties for Non-Compliance
- Late Filing Penalties: Organizations may incur fines for failing to file on time, which can range significantly based on annual revenue.
- Loss of Tax-Exempt Status: Continuous failure to file, especially for three consecutive years, could lead to revocation of tax-exempt status.
Digital vs. Paper Version of Form 990 for 2017
Organizations can file Form 990 in both digital and paper formats, each with its own advantages and disadvantages.
Benefits of Digital Filing
- Instant Submission: Allows organizations to file form quickly.
- Easier Error Correction: Automated prompts help identify and rectify errors before submission.
- Cost Efficiency: Reduces postage and printing costs.
Considerations for Paper Filing
- Longer Processing Time: Paper submissions may take longer for the IRS to process compared to electronic submissions.
- Need for Additional Documentation: Paper forms typically require additional mailing of schedules or additional documentation if not submitted online.
By adhering to the above guidelines and understanding the nuances of Form 990 for 2017, organizations can ensure they remain compliant while maximizing the form's potential for transparency and donor engagement.
