Nonprofit Tax and Accounting

1
Nonprofit Tax and Accounting

• Fundamentals for Humanitarian Organizations
• Todd Manwaring
• Managing Director

2
Agenda

• Introductions
• Part I What Are We Trying To Do?
• Pre-Test
• Start with the end in mind What do the state and
  federal government want to know?
• What information do we need to keep?
• Part II Financial Information
• Examples / Practice
• Part III Non-Financial Information
• Examples / Practice

3
Levels of Tax Accounting

• Do it yourself have a friend help you
• Solicit an accounting person to review your work
  (volunteer, board member)
• Hire consultants to help
• Bookkeepers
• Tax Preparation
• Auditing
• Hire internal employees
• This workshop covers FUNDAMENTALS ONLY

4
Pre-Test

• Match These Forms
• Provo Business License Application
• IRS Form 1099-MISC
• Utah Registration Information Change Form
• IRS Form 990 or 990EZ
• IRS Form 1023
• IRS Form 990 Schedule A
• IRS Form 8718
• Utah Charitable Organization Permit Application
  Form
• Bylaws
• IRS Form SS-4
• IRS Form 872-C
• Utah Annual Report / Renewal Form
• IRS Determination Letter
• IRS Form 1096
• IRS Form 990 Schedule B
• Articles of Incorporation
• Utah Form TC-146

• To These Activities
• Forming the 501(c)3
• IRS Recognition of 501(c)3
• State Recognition of 501(c)3
• Yearly Activities (Jan-Feb)
• Yearly Activities (Accounting Period)

5
Pre-Test

• Match These Forms
• IRS Form SS-4
• Articles of Incorporation
• Bylaws
• IRS Form 1023
• IRS Form 8718
• IRS Form 872-C
• IRS Determination Letter
• Utah Form TC-146
• Provo Business License Application
• IRS Form 1096
• IRS Form 1099-MISC
• IRS Form 990 or 990EZ
• IRS Form 990 Schedule A
• IRS Form 990 Schedule B

• To These Activities
• Forming the 501(c)3
• IRS Recognition of 501(c)3
• State/Local Recognition of 501(c)3
• Yearly Activities (Jan-Feb)
• Yearly Activities (Accounting Period)

6
Forms IRS And Utah Want?

• IRS Form 1096
• IRS Form 1099-MISC
• IRS Form 990 or 990EZ
• IRS Form 990 Schedule A
• IRS Form 990 Schedule B
• Utah Charitable Organization Permit Application
  Form
• Utah Annual Report / Renewal Form
• Utah Registration Information Change Form (if
  needed)

7
IRS Form 1096 1099-MISC

• Often forgotten required early in year.
• Form 1096 is a summary form of your 1099s.
• Normally, the IRS just wants to know about
  non-employees that you paid over 600 to.
• Instructions
• http//www.irs.gov/pub/irs-pdf/i1099msc.pdf
• Employees reported via IRS Form 941 and its
  companions (quarterly and yearly).

8
IRS Form 990EZ/990, Schedule A/B

• These are your yearly tax statements due after
  organization fiscal year.
• They are used by others as well (state, grantors,
  donors)
• All of the information is public except parts of
  Schedule B
• Instructions
• http//www.irs.gov/pub/irs-pdf/i990-ez.pdf
• http//www.irs.gov/pub/irs-pdf/i990sa.pdf
• What is the IRS trying to determine?

9
Utah Annual Report RenewalUtah Registration
Information Change

• Often forgotten required at anniversary of
  organization
• Keeps your corporation active with state
• Allows simple changes to corporate location,
  agent, governance
• Much of the information is public
• What is the State of Utah trying to do?

10
Utah Charitable Organization Permit Application
Form

• Usually forgotten required annually
• Part of the Division of Consumer Protection
• Keeps solicitation information current with Utah
• Some of the information is public
• Instructions
• http//www.commerce.utah.gov/dcp/downloads/permita
  pps/charitableorganizationinstructions.pdf
• What is the State of Utah trying to do?

11
What Information Do We Keep?

• Financial Categorized Income, Expenses, Assets,
  Liabilities
• Ledgers/Spreadsheets/Quicken/Money
• Do it yourself have a friend help you
• Solicit an accounting person to review your work
  (volunteer, board member)
• Professional Accounting Packages (Quickbooks on
  up)
• Solicit an accounting person to review your work
  (volunteer, board member)
• Hire consultants to help
• Hire internal employees
• Non-Financial

12
Other Items to Remember

• Local business license renewals
• Donor receipts especially over 250