Charitable Organization CPA

White background with blue text that says charitable non profit exempt organizations

Note: Do not consider the following a catch-all replacement for individual, qualified counsel.  Seek the guidance of CPA that has the experience to speak directly to your circumstance. What follows will provide you a ground work to form the basis of understanding.

If your greater Seattle organization meets the requirements of IRS Code section 501(c) (3), you are exempt from federal income tax as a charitable /non-profit /exempt organization.

Here is a bit about what it means to “meet the requirements”:

  • Your organization must contribute to: relieving poverty, helping the disadvantaged, advancing religion, education, or science; or fighting against discrimination or cruelty, etc.
  • No earnings are to go to individuals or private shareholders (private interests).
  • You must file an application (Form 1023) for the Internal Revenue Service to confirm you meet these requirements and qualify for the exemption.

There are two classifications of charitable /non-profit /exempt organizations:

Public Charity

  • Often Schools, Churches, and Hospitals that receive income from furthering exempt purposes of the organization.

Private Foundation

  • Are generally funded from a single source, perhaps a gift.

You must file an application to demonstrate that you qualify for the Federal Income Tax exemption.

And there are measures to ensure you remain compliant and qualify for exemptions

Both Private Foundations & Public Charities are required to file:

  • Form 990-T
  • Form 990-W
  • Estimated Tax

This is all pretty standard. But if it’s new to you, I can be more than daunting.  You can find this information, in its original boiler plate language here. In fact you might chose to take the tour through the application process, it may address some of your immediate concerns.

But here is when you’ve got more than just immediate concerns, when you have concerns like “How do I determine the best bookkeeping method and accounting software for a Charitable Organization?” or, “How do I establish a strategic Tax plan to ensure I retain my tax exempt status?” Or when you need someone that has certification and the qualifications to tend to the tax and accounting needs of your charitable /non-profit /exempt organization, give us a call or send us an e-mail today.




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