Are you a non-profit organization that is looking to apply for 501(c)3 tax-exempt status?
If so, then we have the perfect solution for you! Optimum Tax Pro offers professional assistance with your application. We’ve been helping organizations like yours since 2016 and are ready to help you as well. Our team of experts will guide you through every step of the process and make sure that everything is done correctly and on time. You can trust us to handle all aspects of your application from start to finish – including drafting your bylaws, organizing board meetings, filing forms with the IRS, preparing financial statements, and more!
So if you want an experienced team who knows how to get things done right – contact us today! We’ll be happy to answer any questions or concerns that you may have about our services or even just talk about what it takes for a non-profit organization like yours to become tax-exempt.
Click here now and fill out our online form or call (469) 557-1040!
Requirements to apply for 501(c)3 tax-exempt status
The requirements to apply for 501(c)3 tax-exempt status are:
1. The organization must be organized and operated exclusively for exempt purposes as set forth in section 501(c)(3) of the Internal Revenue Code.
2. No part of the net earnings of the organization may inure to the benefit of any private shareholder or individual.
3. The organization must not be an action organization (i.e., it may not engage in lobbying activities).
4. The organization must maintain its books and records so as to permit examination by the IRS.
5. The organization must file an annual return with the IRS, Form 990, reporting its income, expenses, and program accomplishments.
Benefits of having 501(c)3 tax-exempt status
There are many benefits to having 501(c)3 tax-exempt status, including:
1. Tax exemption from federal income taxes.
2. Eligibility to receive tax-deductible contributions from individuals and businesses.
3. Eligibility to apply for grants from private foundations and government agencies.
4. The ability to issue tax-exempt bonds, which can help finance construction or renovation of facilities, purchase of equipment, or other capital projects.
5. The ability to operate with a reduced amount of paperwork and regulation.
The Drawback of having a 501(c)3 tax-exempt status
The main drawback of having a 501(c)3 tax-exempt status is that it can be a lot of paperwork and can be confusing to navigate. For example, if your charity hosts an event, there are specific rules about what type of event it can be and what types of activities can be funded with the proceeds.
There are also restrictions on how much political lobbying a 501(c)3 organization can do. Lobbying is defined as trying to influence legislation or regulations, so any type of advocacy work (e.g., advocating for better healthcare policies) would count as lobbying. There are some exceptions to these rules, but it’s important to consult with an accountant or attorney who specializes in nonprofit law to make sure
Frequently Asked Questions
- How much does it cost to apply for 501(c)3 tax-exempt status? There is no one size fits all answer to this question since the cost of applying for 501(c)3 tax-exempt status can vary depending on the complexity of your organization’s structure and the level of professional service fees you need to hire. However, on average, most organizations can expect to pay around $1,000 in IRS filing fees plus an additional $500-2,000 in professional service fees.
- How long would it take to complete my tax return? It can take a while. Depending on the complexity of your organization and the completeness of your application, it can take anywhere from several weeks to several months to be approved for 501(c)3 tax-exempt status by the IRS. However, even after you’re approved, you still have to file an annual Form 990 with the IRS, which is a detailed report of your organization’s income, expenses, and activities. Failing to file this form can result in penalties from the IRS. So it’s important to stay on top of your paperwork if you want to keep that coveted 501(c)3 designation!
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