Understanding IRS Form 990 Series: Which Form Should Your Organization File?

For tax-exempt organizations, filing the correct IRS Form 990 is crucial for maintaining transparency and compliance. Depending on your organization’s size and financial activities, you'll need to file one of three versions: Form 990-N, Form 990-EZ, or Form 990. Here’s a quick guide to help you determine which form to file and why it matters.

Form 990-N: The e-Postcard

Who Should File?

• Organizations with gross receipts of $50,000 or less.

Advantages:

• Simplicity: Easy and quick to file.
• Cost-Effective: Free and requires minimal information.

Form 990-EZ: The Short Form

Who Should File?

• Organizations with gross receipts less than $200,000 and total assets less than $500,000.

Advantages:

• Detailed Reporting: Provides more comprehensive financial information.
• Public Disclosure: Demonstrates accountability, enhancing credibility with donors and grantors.

Form 990: The Long Form

Who Should File?

• Organizations with gross receipts of $200,000 or more or total assets of $500,000 or more.

Advantages:

• Comprehensive Reporting: Offers detailed insights into the organization’s finances, programs, and governance.
• Transparency and Accountability: Enhances reputation among stakeholders and fosters trust.

Filing Deadline

All forms are due by the 15th day of the 5th month after the end of the tax year (e.g., May 15 for a December 31year-end).

Why opt for a More Detailed Form?

Even if you qualify for a simpler form, filing a more detailed one can offer significant benefits:

• Enhanced Transparency: Detailed financial information attracts potential donors and grantors.
• Improved Governance: Encourages better internal controls and compliance practices.
• Increased Credibility: Boosts the organization's public image and trust.
• Stakeholder Engagement: Keeps members, donors, and volunteers informed about the organization’s activities.
• Grant Opportunities: Many foundations prefer or require detailed financial information.

Connection Between Monthly Financial Quality and Accurate Reporting

Accurate and timely filing of the IRS Form 990 is a reflection of the quality of your organization's monthly financial reporting. Consistently detailed reporting practices improve overall financial management by:

• Ensuring Consistency: Regular, accurate filings create a habit of precise record-keeping, which translates into more reliable monthly reports.
• Enhancing Financial Oversight: Detailed annual forms encourage robust monthly financial reviews, catching discrepancies early and ensuring data integrity.
• Improving Strategic Planning: Accurate monthly reports inform better decision-making and strategic planning, ensuring resources are allocated efficiently and effectively.

Take Action Today

Ensure your organization is compliant and transparent. Consult with a qualified tax professional to determine the best form for your organization’s needs and enhance your credibility with stakeholders. Learn More and File the Correct Form 990.