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ExpressTaxExempt Blog

Tuesday, December 16, 2014

End of Year Tax Tips For Nonprofit Organizations

I had the chance to sit down with the Express990 crew to discus what is most important to be aware of at the end of the year. Now, they had a lot of tips, but a few really stood out. So to kick of this important series, End of Year Tax Tips, we start with Yearly renawal of state articles of Incorporation. 

Yearly renew of state Articles of Incorporation.

All nonprofits must renew their articles of incorporation with their respective state(s) each year. If you only solicit charitable contributions locally, then you are only required to register your non-profit in that one state. If you intend to solicit charitable contributions nationally, you will have to register in 39 states and the District of Columbia before you can solicit within their jurisdiction.

Another Express990 crew member was on the phone with a Nonprofit Organization (NPO) and was asked a question about intellectual property. Now i'm not one to eavesdrop, but this question seemed really important. So I listened in on  the answer, and it was just perfect. Here is exactly what was said...

​Can a NPO generate money through intellectual property?

Consider intellectual property as public radio, public, television, or even the National Geographic Society, they are organizations that sell or lease their intellectual property to make a profit. This same method can use used with art groups, educational organizations, and other organizations that develop their own intellectual property for sale to others.

​If the sale of that intellectual property furthers the charitable exempt purpose of the organization, then the sales do not generate unrelated business income; regardless of the amount. However, if the material sold is unrelated to the charitable organization exempt status, this would generate unrelated taxable business income.

And too much "unrelated" business income can cost an organization its exempt status.

So even though this is an extremely busy time for nonprofit organizations, keep in mind the tips and reminders for the end of the year. You don't want to be late, or risk losing your tax exempt status. And don't forget to file your 990. If you miss filing your 990 for three consecutive years, you will automatically lose your tax exempt status. Express 990 supports e-filing of the 990-N (e-postcard) and the 990-EZ. We even have an app the file the 990-N so you can get that baby to the IRS no matter where you are. If you have any questions about filing Form 990, don't hesitate to give us a call at 704-839-2321 or send us an email: support@expresstaxexempt.com 

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