Form 990, Return of Organization Exempt from Income Tax must be filed if an activity generates $1,000 or more of gross income. This form must be filed at least once a year and if the form is not for three consecutive years, the exempt status of the organization will automatically be revoked. The form requires knowledge of income, expenses, and related information about activities conducted during the year. Maintaining records daily or as events are planned then carried out, makes completing Form 990 a doable process.
If the organization does not have an employee or group of employees who can maintain records throughout the year then used to prepare Form 990, an outside return preparer can be used. Even if an outside preparer is used, the return can only be prepared using records or information about an organization’s activities during the year. The following is the type of information needed to complete Form 990 –
- Part I Summary – Activities & Governance, Revenue, Expenses
- Part II, Signature
- Part III, Statement of Program Service Accomplishments
- Part IV, Checklist of Required Schedules
- Part V, Statements Regarding Other IRS Filings and Tax Compliance
- Part VI, Governance, Management, and Disclosure
- Part VII, Compensation of Officers, Directors, Trustee, Key Employees, Highest Compensated Employees and Independent Contractors
- Part VIII, Statement of Revenue
- Part IX, Statement of Functional Expenses
- Part X, Balance Sheet
- Part XI, Reconciliation of Net Assets
- Part XII, Financial Statements and Reporting