A nonprofit tax exempt organization is a corporation in which the owners, stockholders, board of governors and other control authorities do not share any profits or take it for their personal purposes. The organizations may be generating a profit, but is used solely for the organization itself and not for any personal means. The main aim of such an organization is usually to promote a cause or a mission, which is meant for public welfare. If such an organization submits the nonprofit 501 (c) 3 tax exempt application to IRS and their request is accepted, they have to pay no taxes and all contributions made to this organization can be deducted from taxes.
If you are planning to start a nonprofit tax exempt organization, here is what you need to keep in mind.
Conduct a thorough research
As passionate you may be about your cause, you should not start a nonprofit organization until you have conducted a thorough research. While doing this, be realistic and consider all aspects. In some instances, you might be able to partner up with some other organization contributing to a similar purpose or you could request them to provide you with some initial funding until your business is registered. Also make sure that the structure of a nonprofit is suitable for you and you will have no trouble in obtaining the legal status.
Formulate a business plan
A nonprofit is also a business and generates profits. The only difference is that the earnings are not used for personal gains. Point is your business must have positive cash flows so that you can succeed. And for this, you need a proper business plan. Depending on luck is not going to help you until you know exactly what you have to do in order to take your organization to a successful level.
Assure you can gain a nonprofit status
A nonprofit status is provided only when your cause is charitable and a number of clauses are met. Please go through all these legal requirements and ascertain that you will have no difficulty in fulfilling them.
Keep records in a proper condition is vital for the success of ay businesses. Needless to say, you must have backups as well.
Submit a nonprofit 501 (c) 3 tax exempt application
There are many advantages of submitting a nonprofit 501 (c) 3 tax exempt application to the IRS. If your request is accepted, you get to enjoy tax advantages along with some other benefits. For instance, you are offered a reduced postal rate. Other than this, you have to pay no taxes on any funds you receive. You can also directly apply for funds if nay need arises.
The nonprofit 501 (c) 3 tax exempt application can be submitted through the 1023 form. If you have any questions with regards to the legalities, you should take help from the pros and they will guide you.
If you need more information about our accounting and tax services, please contact us at 407-344-1012. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years. Our Orlando accounting and tax firm has its main offices in Kissimmee, FL. Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, Clermont, Davenport, Hunters Creek, Lake Nona, Celebration, Winter Park, Windermere, Dr. Phillips, Maitland, Altamonte Springs, Winter Garden, Ocoee, Apopka, Belle Isle, Edgewood, and Oakland FL. Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin numbers, incorporations, and non profit 501c3 tax exempt.