If Your Nonprofit Files a 990 You Can Get a Line of Credit
Many people believe nonprofits have it easy. A volunteer workforce, government funding and not having to pay taxes seems like a dream come true. The truth, of course, is that you do have to pay your employees, funding is scarce and it’s necessary that your nonprofit files a 990 with the IRS.
While there are a few exceptions to the rule, every nonprofit files a 990 tax form. Learn more about how a nonprofit line of credit can help.
Understanding When and How Your Nonprofit Files a 990
Form 990-N is due every year by the 15th day of the 5th month after the close of your tax year. Filing a 990 is relatively simple. You only need eight pieces of information, such as your employer identification number, legal name and mailing address and the name of a principal officer.
This date seems to come up on you quickly and some nonprofit organizations are still unprepared. Those who are late in filing Form 990 can face IRS penalties.
For organizations with gross receipts of less than $ 1 million, the IRS will impose a penalty of $20 per day for each day the return is late. The maximum penalty is $10,000, or 5 percent of the organization’s gross receipts, whichever is less. The penalty increases to $100 per day, up to a maximum of $50,000, for an organization whose gross receipts exceed $1,000,000.
Organizations that fail to file required Forms 990 (total assets of more than $500,000), 990-EZ (if you have total assets of less than $500,000) or 990-N for three consecutive years will automatically lose their tax exempt status. You will then be responsible for any current and future taxes and liabilities as a result.
The Pension Protection Act of 2006 added an annual filing requirement for small tax-exempt organizations to ensure that the IRS and potential donors have current information about your organization. Most small tax-exempt organizations whose annual gross receipts are $50,000 or less can satisfy their annual reporting requirement by electronically submitting Form 990-N.
How a Line of Credit Can Help if Your Nonprofit Files a 990
If you do have to pay a penalty, a line of credit can help. Financing Solutions (www.financingsolutionsnow.com) is the best place to turn, as they have been helping not for profit organizations get the funding they need to survive and thrive.
With a nonprofit line of credit, you can handle any tax issues and still start programs and fulfill your mission. Most importantly, they offer a simple application process and fast approvals. You could have the 501c3 funding you need in less than 48 hours.
If Your Nonprofit Needs Help
You must engage your donors in order to entice them to keep giving. Communicate often and invest in software to help you understand their needs so that they continue supporting yours.
With finding government grants and loans
First, you must make sure you have the capacity and resources to run a program before asking for money to support it. There are also free workshops and technical assistance to help you.
With cash flow
A line of credit can help you manage your money and stay on track. Contact Financing Solutions to get the nonprofit financing you need.
If your nonprofit would like a line of credit that you can use when cash flow is down please visit www.fscreditline.com/np to learn more, to apply and to receive a written offer. A Line of Credit for your nonprofit costs zero to set up and zero until you use it, making it an excellent backup plan.