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ExpressTaxExempt Blog

Tuesday, September 29, 2015

Recover From Penalties




As the title states, you most likely are looking for how you can recover from IRS penalties because of late filing. However, there aren’t really any ways to get back what you’ve lost from IRS penalties; fortunately, you can become proactive and prevent late filing penalties for the next tax season.

One of the best assets available for you to avoid IRS penalties is filing a tax extension. The Extension Form 8868 is broken into two parts, and can grant you either an automatic, 3-month extension, or a non-automatic, additional 3-month extension. By filing Part I of the extension form, your extended deadline will depend on your tax period end date.

For a Calendar Tax Year:
Original Tax Deadline (May 15) + Extension Form 8868 Part I (3 months) = Extended Tax Deadline (August 15)

For a Fiscal Tax Year:
Original Tax Deadline (15th Day of the 5th Month after tax period end date) + Extension Form 8868 Part I (3 months) = Extended Tax Deadline (Original Deadline + 3 months)

By filing Part II, you can gain an additional 3-months under two conditions:
  1. You already received the first extension from Part I
  2. You can provide a valid reason for the additional time

Once you gain your additional time, you can add three months to your extended tax deadline.

Calendar Tax Year:
Extended Tax Deadline (August 15) + Extension Form 8868 Part II (3 months) = 2nd Extended Deadline (November 15)

Fiscal Tax Year:
Extended Tax Deadline (Original Deadline + 3 months) + Extension Form 8868 Part II (3 months) = 2nd Extended Deadline (Original Deadline + 3 months + 3 months)

FACT: To properly take advantage of Extension Form 8868, you need to have Part I filed before or on your original tax deadline.

If you didn’t manage to file a tax extension on time, you can still submit an explanation with your tax form pertaining to why you’re filing late. Your reasons can go on Schedule O of your Form 990 or Form 990-EZ. You can use as much room as needed to provide adequate information on Schedule O; there is no limit to the amount you write.

The IRS mainly looks for “facts and circumstances,” or reasonable explanations detailing why you were delinquent. Examples of legitimate excuses include
  • What prevented your organization from requesting an extension of time to file its return
  • How your organization was not neglectful or careless, but exercised ordinary business care and prudence
  • What steps have been taken to prevent the same situation from happening again

You’ll gain a better chance of having your penalties dropped or lessened by supplying answers to the questions above. You should also include any circumstances that were outside your control like unexpected events, or advice from a tax professional.

Prevent late filing penalties during the next tax season by e-filing your Extension Form 8868 with Express990. We offer both Part I and Part II of the tax extension, and you can even e-file it wherever you may be with the Express990 App for iOS/Android tablets or mobile site for smartphones.

For professional assistance with e-filing any of our 990 forms or extensions, contact our live experts at our Rock Hill, South Carolina headquarters by phone (704-839-2321, Monday through Friday from 9 a.m. to 6 p.m. EST), email (support@expresstaxexempt.com), or live chat (www.expresstaxexempt.com).








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Thursday, September 24, 2015

Getting to Know Schedule A

Whether you’re new to the Form 990 Series or could do it with your eyes closed at this point (which, if you can, my hat’s off to you), it’s important to stay informed on exactly what you’re filing each year with the IRS. And if you’re filing a Form 990 or a Form 990-EZ, you’re probably filing a Schedule A along with it. But if you’re not 100% sure what Schedule A is all about, you might be hesitant to jump right in or may even wonder if it’s really the right thing for you (which, chances are, it is).

So what is Schedule A?

Think of Schedule A as the IRS just trying to get to know you better: So, what is it you do? Really? That sounds so interesting! How do you go about doing that? Well, do you have anyone helping you, you know, financially? Tell me about them in detail! What about your mission statement? Surely you’ve got a mission statement...I’d love to hear it!

That doesn’t sound so bad, does it?

Okay, so they’re kind of out there for just getting-to-know-you questions. The IRS comes on strong, but it means well. Maybe it’ll help to put you more at ease if you get to know a little bit more about Schedule A:

Schedule A is not the exclusive type; it’s used by all tax-exempt organizations recognized under 501(c)(3). But, rest assured that when you’re with it, it’s only got eyes for you. Schedule A is also every bit as nosy as it presents itself to be, requiring information about what type of organization you are, such as whether you’re classified as a government, educational, community, or grassroots organization. And before you can go all the way with it, it wants to know where you’ve been: who have you received support from and in what forms (grants, gifts, etc.)?

Just think of Schedule A as a very invasive first date. And, while that might not be your cup of tea, as the saying goes, you have to kiss a lot of frogs to get to a prince. The same applies here: you have to fill out a lot of information - Schedule A included - to maintain your organization’s tax-exempt status.

So if you have any questions about Schedule A, Form 990, or any of the other schedules, or just need a pep talk before jumping right into the date, consider Express990 your own personal support team. We’re here by phone (704-839-2321) and live chat (www.expresstaxexempt.com) Monday through Friday from 9 a.m. - 6 p.m. EST. We’re also available 24/7 through email at support@expresstaxexempt.com.

Now go get em, tiger!



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Tuesday, September 22, 2015

Tax-Exempt Qualifications




We all may have ideas about an organization, a company, or even a nonprofit. And while you may have a rock-solid business plan, proper funding, and an amazing cause, that doesn’t necessarily mean your corporation will qualify for tax-exempt status.

Under the Code Section 501, the most common exemption is Section 501(c)(3). For your corporation to be eligible for tax-exempt status, your activities must be limited to legitimate tax-exempt purposes. These purposes can be considered as:
  • Literary
  • Scientific
  • Religious
  • Charitable
  • Educational
  • Public safety testing
  • Promotion of the arts
  • Prevention of cruelty to children or animals
  • The supporting of national or international competitive sports for amateurs

With each of these tax-exempt purposes, there follows a core of legal meaning that explains what each category means. Based on the regulation of the Treasury, for instance, the word “charitable” can be defined as the:
  • Growth of religion
  • Advancement of social welfare
  • Growth of education and science
  • Reduction of governmental burden
  • Aid of the poor, distressed, or underprivileged
  • Construction or preservation of public buildings, monuments, or works

Each purpose is specifically explained as such; so if you have a new or original idea for your corporation, it’s best to double-check and make sure it can be categorized under at least one of the tax-exempt purposes.

Another qualification for tax-exempt status is that your organization must assist an adequately large and broad charitable class. As the saying goes, “charity ends where certainty begins,” which is why fundraising for a specific person, a tech company, or even donating all of your profits to a Section 501(c)(3) organization, doesn’t qualify your organization for tax-exempt status.

One more quick rule when qualifying for tax-exempt status is that it’s not about the proceeds, but what activities your organization is doing, and if those activities can be classified under any of the tax-exempt purposes.

For more information about gaining exemption status, check out the following blogs:

Non-Profit vs. Tax-Exempt Organizations

Becoming a Nonprofit or Tax-Exempt Organization



Once your organization becomes tax-exempt, you can preserve your status by e-filing your yearly, required tax returns with Express990. We support service for Form 990, Form 990-EZ, Form 990-N (e-Postcard), and Extension Form 8868. Failure to file for three consecutive years will result in the loss of your exemption status. We work closely with the IRS to provide you a safe and secure e-filing experience that will save you time and money.

For any assistance with e-filing our available 990 forms, you can contact our live professionals by phone (704-839-2321, Monday through Friday from 9 a.m. to 6 p.m., Eastern Standard Time), by email (support@expresstaxexempt.com), or by live chat (www.expresstaxexempt.com).








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Thursday, September 17, 2015

Amending Form 990-N: Changing the Fiscal Year

No one likes to hear they’ve made a mistake. But, hey, it happens. Still, when the IRS is the one telling you that you’ve messed up, things can get unnecessarily stressful. You were so sure you did everything right, yet here’s your rejected Form 990-N (“ePostcard”) reporting that the fiscal year on your return doesn’t match the IRS’s records. If you’re like me, your brain’s probably flooding with questions: How could I get a year wrong? Don’t they all start in January? How can I fix this? How much will it cost me to fix this? Is the IRS mad at me? Did I leave the oven on?

First, inhale deeply. Remember that Express990 is here to help. Aaaand exhale.

Recording your fiscal year as the calendar year is a common mistake, and no, the IRS isn’t mad at you for it. Once you verify with your organization the actual start date of your fiscal year, correcting this error is easy and, with Express990, free! Just follow these simple steps to amend the fiscal year for your submitted Form 990-N:

Step 1. Begin by logging into your Express990 account.

Step 2. Once at your Dashboard, click the “Edit” button next to the tax period that’s currently listed. This will take you to the point in your return where you’ll select your actual fiscal year.


Step 3. Select the “Fiscal Tax Year” button. It will turn green to indicate it’s been selected.



Step 4. Click the blue calendar icon next to “Tax Year Begin Date.” Select the beginning month and year by accessing the drop down menus, then click the day your fiscal year began. (In this example, the fiscal year began May 1, 2014.)


Step 5. Once you click the day, the calendar will go away, the program will fill in your “Tax Year Begin Date” and “Tax Year End Date,” and your due date will update. Verify that all of this is correct, and click “Next.”


Step 6. After you click “Next,” your fiscal year will update on Express990, but you still need to resubmit your Form 990-N to the IRS. To do this, continue to click “Next” until you reach the Summary page of your 990-N, shown below. Confirm that it’s correct and click “Review.”



Express990 will then generate an Audit Report to check for any obvious errors; if no errors were found, click “Next” until you come to the option to “Authorize and Transmit to the IRS.” Until you select this, your amended return will not be sent to the IRS.

So there ya go - your mistake has been fixed! The birds are still chirping, the world is still turning, and you can go check that oven if you haven’t already.

And if you have any other questions or need further assistance, our live experts in Rock Hill, South Carolina can be reached Monday-Friday from 9 a.m. to 6 p.m. EST by phone (704-839-2321) and live chat (www.expresstaxexempt.com) or through our 24/7 email support service (support@expresstaxexempt.com).






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Tuesday, September 15, 2015

Completed 990 Forms




It comes as no surprise that with something as important as a federal tax return, you’re going to want a copy for your own personal records. Or you may need a physical copy for other purposes like sending it to your principal officer, having a lawyer or tax professional review it, or whatever other reason you can think of. One of the most pragmatic features of Express990 is that you can print or email your completed 990 form.

What you need to remember is that you only have access to your completed tax form after you successfully transmit your form to the IRS. Every once and a while we, at Express990, receive feedback or questions about viewing the completed form before sending. We consider each concern valid, and we understand why you would want to view before transmitting. 

We compensate with our built-in audit check, which reviews your return for any errors way before you transmit to the IRS. And, if for some reason your error-free return is still rejected, you can make changes and re-transmit for no extra charge.

To access your completed 990 form, you simply just login to your account at www.expresstaxexempt.com.

Form 990-N (e-Postcard)

If you transmitted a Form 990-N (e-Postcard), your completed form can be found on the right side of your Dashboard screen listed as “Draft Letter.” Place your mouse on the envelope icon and a drop-menu will appear that will allow you to either “View,” “Download,” or “Email” your completed form.



Keep in mind that a completed Form 990-N (e-Postcard) isn’t going to look like a typical tax form. This is because the 990-N was originally created to be filed exclusively online; there really isn’t an official, physical paper form for an e-Postcard.

Form 990-EZ





If you transmitted either a Form 990-EZ or a Form 990, you can find your completed form in the same area of your Dashboard screen; it’ll be listed with the same name of the tax form you filed. You may notice subtle differences within your completed form like run-off text for example. This is normal with e-filing and won’t affect your return.

Form 990




If you notice any other discrepancies with your completed form, you can contact our support team, and we’ll manually make any changes needed and email you a corrected PDF file. Our expert, live professionals are available Monday through Friday from 9 a.m. to 6 p.m. EST at (704) 839-2321. You can also email us at support@expresstaxexempt.com, or chat with us at www.expresstaxexempt.com.







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Thursday, September 10, 2015

Five Common Form 990 Errors


Paying taxes is unavoidable; paying even more money to the IRS because their long, complex forms caused you to make an error and incur penalties is not. 

Form 990 is a long and eye-blurring form (and the IRS-provided instructions for filling out the form is 100 pages long). But if you’re directing an organization exempt from income tax under section 501(a), you probably hardly have time for such “light” reading. So here are five common, avoidable errors made on Form 990 that could subject you to steep penalties or even an IRS inquiry:
  • Using the wrong form. There are different types of Form 990 that apply to different tax exempt organizations. Using one form when you should use another can incur penalties.
    • Form 990-N (“ePostcard”) is filed when your gross receipts are less than $50,000
    • Form 990-EZ is filed when your gross receipts are less than $200,000 and your assets are less than $500,000
    • Form 990 (“long form”) is filed when your gross receipts are greater than $200,000 or your assets are greater than $500,000.
  • Using the calendar year instead of a fiscal year. The deadline to file Form 990 is the 15th day of the 5th month after the end of your organization’s fiscal year. Typically, this deadline is May 15 as many fiscal years do coincide with the calendar year. However, if your fiscal year ends on a day other than December 31, you could be at risk for filing late or even filing for the wrong year. Your filing year is dictated by the first month of the fiscal year. For example, an organization whose fiscal year runs from December 1, 2013-November 30, 2014 should file a 2013 Form 990 by April 15, 2015.
  • Failing to prepare and include Schedules. ALL section 501(c)(3) organizations MUST prepare and attach Schedule A to Form 990. If this form is missing or incorrect, the IRS can penalize you. Based on organization type, gross receipts, and other stipulations, you may also be required to fill out and submit other schedules, without which your filing is incomplete.
  • Submitting Form 990 with missing or inaccurate information. This could be anything from failing to mark an applicable box, to failing to list officers and key employees (including volunteers), to an imbalance between your ending net assets sections. Any discrepancies could flag your Form 990 as incomplete or incorrect, resulting in penalties or an IRS inquiry.
  • Failing to file an extension. An extension can allow you to postpone your deadline for 3-6 months, depending on your type of organization and whether you plan to file a Form 990 or Form 990-EZ. However, an extension cannot be filed after your organization’s original deadline. If you are late filing your Form 990 and have not filed an extension, you’re at risk of accruing late penalties.
Avoiding these common mistakes and staying informed can make taking on Form 990 seem like less daunting of a task. And to make it seem even LESS daunting, here’s a bonus avoidable error, just for you:
  • Not using Express990 to file! Sure, you could try to keep in mind these and all of the other errors you might make while filing, but why would you when we can do it for you? Express990 is easy to understand; it turns Form 990 into a conversation. Answer “yes” or “no” questions, fill in your financial specifics, and we’ll make sure everything matches up and everything required is included. We’ll then run an error check before submitting so that any obvious errors can be fixed and you avoid filing an incorrect or incomplete form. And if you see where you might need more time to file, you can e-file extension Form 8868 right from our website.

But if you still feel like pulling your hair out over Form 990, you can contact the Express990 team Monday-Friday from 9am-6pm EST by phone (704-839-2321) or by live chat (www.expresstaxexempt.com), or 24/7 by e-mail at support@expresstaxexempt.com.



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Tuesday, September 8, 2015

Multiple Organizations / One Account




Filing taxes for yourself, or for your own organization, can be a daunting task. It can be even more tedious if you have more than one organization to file for, or if you’re a paid preparer and have clients that you are holding you responsible for successfully filing for them. Keeping up with the different sets of tax information is a job itself, but Express990 is here to help you get through the tax season - no matter how many exempt organizations you have to e-file for.

With Express990, you won’t have to create a separate account for each organization or nonprofit you file. Our service allows you to enter multiple organizations under the same account; therefore, you don’t have to fumble with numerous logins or passwords. You can add another organization to your account with the following steps:



Step 1: Log into your Express990 account.



Step 2: Click the “Add Organization” link on your Dashboard screen.



Step 3: Enter your organization’s details.




Step 4: Select the tax form you need to e-file.




You can also switch between your exempt organizations from your Dashboard screen by clicking the drop-down menu near the top left.





There isn’t a more simple way to keep all your organizations in one convenient place. And remember, with the Express990 cloud computing feature, any information regarding your organization details stays within our secured servers; you won’t have to re-enter the same information each year.

Stay organized with all your exempt organizations or nonprofits with Express990. We offer e-filing services for the Form 990-N (e-Postcard), Form 990-EZ, Form 990 (Long), and Extension Form 8868. You can even e-file your e-Postcard “on-the-go” by downloading our FREE Express990 App for iOS and Android tablets, or using our mobile site.


For any assistance with e-filing our available 990 forms, you can contact our live professionals by phone (704-839-2321, Monday through Friday from 9am to 6pm, Eastern Standard Time), by email (support@expresstaxexempt.com), or by live chat (www.expresstaxexempt.com).






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Thursday, September 3, 2015

Change Contact Details




Like with any influential position within an organization, you may only have that title for a limited amount of time. Then, you either move on from the position or pass it down to the next potential candidate in line. One of the many helpful features of Express990 is not having to go through the entire process of creating a new, free account for each new person that takes over the tax filings for your exempt organization.

Whenever you have to pass on the responsibility of e-filing to another, or unexpectedly take on the task of e-filing from someone else, you can follow these simple steps to update your free Express990 account.



Step 1. Login to the Express990 account with the email address and password of prior user.



*You need to already have the login information from the previous user. If you don’t, you can call our live, tech support (704.839.2321), and the information can be searched using your organization’s employer identification number (EIN).



Step 2. Click the “My Account” link on the top-right of your Dashboard screen.




Step 3. Click the “Contact Details” link from the My Account page.





Step 4. Replace the previous contact name, email address, and password with the updated information.



*The updated email address will now serve as the one you enter on the Express990 login screen.



Step 5. Click the “Change” link to save your new contact details.





You can also change the password for your updated Express990 account. From the My Account page:



Step 1. Click the “Change Password” link.



Step 2. Type in the required entries.



Step 3. Click the “Change Password” link to save your changes.





And just like that, it’s as simple as it can be. Being responsible for your exempt organization’s tax filings is tedious enough without having multiple accounts for the same organization. Express990 can make your tax season a bit easier just by letting you update your details. We also offer support for the Form 990-N (e-Postcard), Form 990-EZ, Form 990 (Long), and the Extension Form 8868.


For professional assistance with our e-filing services, contact the live experts at our Rock Hill, South Carolina headquarters by phone (704-839-2321, Monday through Friday from 9 a.m. to 6 p.m. EST), email (support@expresstaxexempt.com), or live chat (www.expresstaxexempt.com).









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Tuesday, September 1, 2015

990-EZ | 990-N (e-Postcard) - Which to E-File?




There are a number of things that can genuinely confuse us all. You may think that you understand what you see or speak about, but actually you’re mistaking it for something else because of similarities between the two. And that’s finenobody is perfect. But the goal after making a mistake is learning from it, which reduces the risk of it being made again.

Lately, we, at Express990, are noticing that a large amount of people see “990-EZ” and mistake it for the 990-N (e-Postcard). Don’t let the “E’s” confuse you. These are two specific tax forms that follow two different sets of rules about how they are filed. Feel free to use this blog as a quick reference if you’re ever in doubt whether to e-file a Form 990-EZ or a Form 990-N (e-Postcard).

Form 990-N (e-Postcard)
  • Exempt organizations that make less than $50,000 are required to file a Form 990-N (e-Postcard)
  • A Form 990-N (e-Postcard) is due on 15th day of the 5th month after the end of your tax year
  • You cannot file an extension for a Form 990-N (e-Postcard)
  • There are no penalties for e-filing a Form 990-N (e-Postcard) late, which means you can basically e-file anytime throughout the year after your tax end date
  • Failure to file a Form 990-N (e-Postcard) for three consecutive years will result in the loss of your tax-exempt status

Form 990-EZ
  • Exempt organizations that have gross receipts less than $200,000 and total assets less than $500,000 are required to file a Form 990-EZ
  • Filing a Form 990-EZ includes completing various schedule forms
  • A Form 990-EZ is due on the 15th day of the 5th month after the end of your tax year
  • You can e-file an Extension Form 8868 Part I to automatically extend your tax deadline by three months. (Example: If your Form 990-EZ is due on May 15, you can extend it to August 15)
  • You can e-file an Extension Form 8868 Part II for an additional 3-month extension (Example: If you already extended your Form 990-EZ deadline to August 15, you can extend again to November 15)
  • There are penalties for e-filing your Form 990-EZ late (For more information, check out 990 Penalties & How To Avoid Them)
  • Failure to file a Form 990-EZ for three consecutive years will result in the loss of your tax-exempt status






As you can see, there are some similarities; however, there are even more specific differences that set these two tax forms apart. Another point you should keep in mind is that it’s more common to receive a notice about a Form 990-EZ than a Form 990-N (e-Postcard). You may receive a notice about an e-Postcard if you’re a couple of years behind.

You should also pay close attention to how the titles of these forms are written out. If you get a notice about an e-Postcard, it should be written out completely as “Form 990-N (e-Postcard).” If the notice is about another form, the title will be completely written out as well.

You can easily find out which tax form you need to e-file with Express990. Even if you accidentally choose the wrong form, once you put in the gross receipt amount, our program redirects you to the correct form. We work closely with the IRS to offer a safe, secure, and accurate e-filing process, backed by expert professionals, that will save you time and money.

For assistance with e-filing any of our available 990 forms, contact our live support by phone Monday through Friday from 9am to 6pm, Eastern Standard Time, at (704) 839-2321, by email at support@expresstaxexempt.com, or by live chat at the Express990 website.





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Frequently Asked Questions

Find answers related to e-filing IRS Form 990, 990-EZ, 990-PF, 990-N (e-Postcard), Form 1120-POL and Extension Form 8868 with our Frequently Asked Questions.

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