FTAX Blog Starting a non-profit organization is a pretty good way to serve the world. And when you start a charity like this, you need to know what steps you can take to save your organization from taxes. For a non-profit it is very important to get exempt from taxes, because a charitable organization needs to put most of its money in its cause.

A few steps you need to follow

1.     File for a non-profit 501c3 tax exempt application:

For this you need to fill out a form. There are two types of forms that you might need to choose from: 1023 or 1024. This is up to Publication 557 that which form will be filled out for your organization.

This application is available at your local IRS office or on IRS website. You need to hire a professional CPA for assistance in preparing for this application because it is a legal document for your non-profit.

2.     Financial Plan

When you file for 1023 or 1024 form, you need to submit your budget and financial plan with it. The budget of starting and managing your organization and the financial plan for at least next two years must be submitted.

3.     Attorney

If you have hired an attorney, you need to fill out a separate form. This form is known as Form 2848.

4.     Sending your application

While sending your application you need to be careful that you have the right address on it. Either you’ll be mailing it or shipping it. Correct mailing address can be found at the IRS official website.

5.     Get your EIN

EIN is an Employer Registration Number and you need to get this from the IRS website or you can just call on their toll-free number. You’ll get your EIN within 4 days.

6.     Applying for 501c3

The IRS has set some guidelines and rules according to which you can file for a non-profit 501c3 tax exempt application. For 501c3 you need to fill out Form 1023. For this purpose the IRS requires some filings which are:

  • Annual exempt organization returns
  • Unrelated business income tax filings
  • Other returns and reports

Moreover, the IRS keeps your organization in check for the guidelines of non-profit 501c3 tax exemption. They observe the organization on the following basis:

  • Public disclosure requirements
  • Employment taxes
  • Jeopardizing exemption
  • Other ongoing compliance issues

Other than that the IRS may send you letters and may even audit you on a regular basis. This is because it needs to check that you are following the guidelines. The IRS also makes termination proceedings, when your tax exemption application is about to expire, they send you renewal process details.

There are a number of benefits for filing non-profit 501c3 tax exemption application. These benefits will help your organization grow and save you a lot of money. The money you save on taxes can be invested into your charity. You’ll be exempted from federal income tax, state income, sales and employment taxes, and federal unemployment tax.

These steps and guidelines will help you get through the process of tax exemption for your non-profit.

If you need more information about our accounting and tax services, please contact us at 407-502-2400. 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, and Celebration, 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.


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