What Are Nonprofits?

Nonprofit organizations are the unsung heroes who save the day when meeting society’s needs, serving the community, and making the world a better place. They’re like the Jedi knights of the tax world because they’re tax-exempt superheroes! Nonprofit CPA can guide you so you remain all about spreading goodness through charity, education, religion, science, literature, and other noble pursuits.

Nonprofit CPA NerdsNow, let’s talk about taxes. Dealing with the IRS can be scarier than a Sith Lord, but fear not! At CPA Nerds, we’re the trusty sidekicks here to assist you with all your epic tax and accounting quests. We’ll guide you through the treacherous terrain of tax filing and ensure you’re armed with the knowledge you need to conquer this confusing process.

Nonprofit cpa nerds “who care”

In Michigan, a nonprofit organization is formed under state law and must adhere to specific guidelines set forth by the Nonprofit Corporation Act. These organizations are typically governed by a board of directors and operate exclusively for purposes that are considered charitable, educational, religious, or scientific. To obtain tax-exempt status, nonprofits must apply to the Internal Revenue Service (IRS) and comply with the provisions of the Internal Revenue Code.

Once granted tax-exempt status, they are exempt from paying federal income tax on their net earnings, provided they meet certain requirements. Nonprofits strive to make a positive impact in their communities and often face complex financial challenges, especially in the realm of tax compliance. Nonprofit accounting and tax regulations can be intricate and demanding, requiring specialized knowledge and expertise. That’s where CPA Nerds can assist clients in making the right decisions.

Why CPA Nerds For Your Nonprofit?

Nonprofit organizations have to wade through a massive financial maze, and we’ve got all the nerdy knowledge and experience to help our partners decipher those tricky tax laws. Plus, we’re experts when it comes to the special reporting requirements and compliance issues that only Michigan has in store.

We’re not just here to crunch numbers, folks. CPA Nerds is all about making sure your financial reports are as accurate as a couple of droids and that you’re saving every penny in taxes while playing by the rules of the IRS and the state. We’re like nerdy wizards of non-profit accounting, dedicated to serving organizations like yours and offering guidance and support. You can trust us to have your back and be ready to save the day! Listed below are some of the most common questions regarding operating a non-profit in Michigan.

Do nonprofits have to file a tax return since they don’t owe tax?

Yes, nonprofits file the 990-series forms. However, it isn’t a “tax” return. It is considered an information return that details financial information covering statements of revenue and balance sheets.

How do I know what form to file as a nonprofit?

Form 990-N is used for small tax-exempt organizations with annual gross receipts of less than $50,000. Nonprofit organizations with gross receipts less than $200K and total assets less than $500K can file Form 990-EZ. Nonprofit organizations that cannot file Form 990-N or 990-EZ will file Form 990.

Are Non-Profit Expert Financial Audits and Reviews critical to the IRS?

Non-profit expert financial audits and reviews play an indispensable role in ensuring compliance with the IRS and maintaining the integrity of tax-exempt organizations. The IRS places stringent requirements on non-profits to uphold transparency and accountability, and thorough financial examinations are the linchpin of this regulatory framework. These non-profit audits and reviews provide a comprehensive assessment of an organization’s financial health, revealing any irregularities or inconsistencies that may be at odds with tax laws. By identifying and rectifying such issues proactively, non-profits can avoid potential penalties, safeguard their tax-exempt status, and, most importantly, cultivate trust among donors and stakeholders. In essence, these financial examinations (CPA Nerds at Lotito & Lazzara) serve as a safeguard, helping non-profits navigate complex tax regulations and demonstrate their unwavering commitment to fiscal responsibility and compliance with IRS guidelines.

The nonprofit organization hasn’t filed its annual forms, so its tax-exempt status has been revoked. What should they do now?

Contact CPA Nerds, as we can help get the non-profit status up-to-date. We will also handle the annual filings going forward to ensure it doesn’t happen again.

Can a nonprofit pay tax?

Yes. To the extent a nonprofit has unrelated business taxable income, a not-for-profit organization is subject to tax on that income.

Are there Michigan Non-Profit Property exemptions?

Glad you asked – yes there are. The US Supreme Court provided six guidelines to determine if an entity qualifies as a charity and well, we just needed to talk about them on our blog and how Michigan non-profit property tax exemptions come into play.

The Gift Tax: what is the financial strategy that allows individuals to share their assets without receiving equal value in return, offers an annual exemption of $17,000 in 2023, and has a lifetime exclusion of $12.92 million, with potential tax deductions for donations to certified charities?

Time to learn about gifting taxes and how much and individual or business can give to a nonprofit. We got a nice article on this very topic.

Can a professional football league really be considered a nonprofit?

According to code section 501(c)(6), yes, even though that might not sound correct the first time you hear it! The Internal Revenue Code specifically defines professional football leagues as exempt organizations under code section 501(c)(6), whether or not they administer a pension fund for football players.

What is an example of Unrelated Business Taxable Income (UBTI) for a nonprofit?

UBTI is income generated by the nonprofit that doesn’t align with its nonprofit-exempt purpose. For instance, if a primary exempt purpose was to provide services to an underserved community and they purchased a building to do that with multiple tenants, the external rental income relating to the other tenants would be considered UBTI.

What counts as a foundation where 990-PF is required?

The major difference between a private foundation and a public charity is how they receive their funding. Private foundations usually are funded by a single endowment, whereas public charities must receive 1/3 of their funding from public donations.

Free Consultations for Nonprofit CPA Services

With the assistance of knowledgeable CPAs, nonprofits can focus on their core missions, secure in the knowledge that their financial affairs are in order and that they are meeting their obligations as responsible stewards of public trust. Call CPA Nerds at (586) 468-0200 to start a conversation.