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ExpressTaxExempt Blog

ExpressTaxExempt & GuideStar Join Forces to Benefit Nonprofits

Author John C. Maxwell once said that “teamwork makes the dream work.” ExpressTaxExempt can attest to this with the launch of our newest exclusive feature, Express990. 

It is with great excitement that ExpressTaxExempt launches Express990, in collaboration with GuideStar, to benefit thousands of nonprofit organizations. Nonprofits will now be able to seamlessly export their completed IRS Form 990, 990-EZ, and 990-PF returns directly to GuideStar with this new integration.

As the world’s largest source of nonprofit information, GuideStar collects pertinent information, including annual IRS filings, and distributes it through its website and more than 200 partner sites and applications. 

The collaboration between GuideStar and ExpressTaxExempt, the #1 e-file provider for thousands of nonprofit organizations, nonprofits now have the ability to send their tax returns directly to GuideStar as part of the e-filing process. 

Furthermore, this partnership will reduce the amount of time it takes GuideStar to obtain this information and makes it available to the public which will also greatly improve upon the professional impression a nonprofit makes in terms of trust and transparency. 

Donors and potential supporters will have almost immediate access to up-to-date information for the nonprofits that select this option. Normally, it takes months before GuideStar obtains 990s from the IRS because the IRS must process them first. Express990 eliminates this delay; each return is transmitted to GuideStar as soon as it is accepted by the IRS.  

Express990 sends GuideStar exactly the same data that was submitted to the IRS under penalty of perjury. This valuable information can be utilized when determining grant approvals, contributions, and more. Information regarding each organization's mission, income, expenses, finances, and leadership will be completely transparent. This transparency can greatly increase a nonprofit’s chances of donor recognition and receive funding in a more timely manner. 

Nonprofits will also have access to several exclusive ExpressTaxExempt features, including management of reviewers, approvers, and additional users, along with internal audit checks, multi-organizational filing, and multi-tax period support. Tax returns filed with ExpressTaxExempt are transmitted directly to the IRS and can be accepted within hours. Users also receive real-time email notifications with tax return updates. Best of all, ExpressTaxExempt offers a 100 percent, US-based customer support team for any and all inquiries an organization may have in regard to its e-filing.

Manager Happy with E-Filing ExperienceThe collaboration between ExpressTaxExempt and GuideStar, along with the launch of Express990, is a “win-win” situation for nonprofit organizations across the country. Nonprofits will be joining a platform of 1.8 million IRS-recognized nonprofit and tax-exempt organizations on the GuideStar website. Potential donors and funders will be able to quickly obtain the information that they need to evaluate your nonprofit. A process that would usually take months, can now be completed within a few days. 

We're Here To Help

As always, our aim at ExpressTaxExempt is to be of assistance to tax-exempt organizations as we dedicate our services to providing the best and most efficient e-filing experience. Make the best choice for your nonprofit and experience the great benefits of Express990 by visiting our website today at www.expresstaxexempt.com

For any assistance or questions about e-filing our available 990 forms, you can contact our live professionals by phone at 704-839-2321, Monday through Friday from 9 a.m. to 6 p.m., EST), by email (support@expresstaxexempt.com), or by live chat (www.expresstaxexempt.com).
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Mystery Solved: Exempt Organization Employment & Form 941

When you first think of a nonprofit organization or charity, you initially think that everyone participating is volunteering their time and not on payroll. However, in order to effectively carry out of the work of your organization, it is necessary (at times) to employ individuals to serve as yearly staff. 

Exempt Organizations with EmployeesAlthough these employed individuals work for a tax exempt organization, they are not excluded from having taxes withheld from their earnings. Employment taxes are reported to the IRS through Form 941, Employer’s Quarterly Federal Tax Return.

Organizations, charities, and small business owners who prepare payroll checks for the employment of staff are expected to file this form quarterly (four times a year); even if the business does not have employees during select quarters. 

The next quarterly deadline for filing this form is Tuesday, October 31. 

However, exceptions are made for seasonal employees, whose taxes are not required to be filed each quarter.

NOTE: If you have decided to close your business/organization or stop paying wages that would subject you to payroll taxes, your obligation to file quarterly returns can end. This can be done by designating the return for the last quarter that you pay taxable wages as a “final” return at the top of the return.

Information Needed to File

In order to file Form 941, you must report three major things:
    Business Owners Filing Employee Taxes
  1. Number of Employees
  2. Total Wages Paid
  3. Amount Withheld [to calculate the tax payments owed] 
Payroll records along with any documents supplied by employees with taxable tips will be needed as well. For more information on Social security and Medicare tax, click here.

Filing Form 941

To complete the Form 941 filing process, you must have details about your business readily available, such as your company’s EIN and online signature PIN (preferred). 

To obtain a PIN for your business or organization for FREE, click here. Once you have received your PIN, you can easily complete the simplified filing process. 

HINT: Form 941 can be e-signed through Form 8453-EMP.

We're Here To Help

Calculating and filing your payroll tax information can be stressful and confusing. For that reason, our sister product, ExpressTaxFilings, was created to assist small business owners and exempt organizations with an easy-to-use filing process for annual and quarterly payroll tax needs. ExpressTaxFilings takes pride in providing an accurate, efficient, and secure e-filing process that will save you both time and money. 

If you need any assistance during this straightforward and easy filing process, have no fear! We’re here to help. If you need any assistance give the dedicated, US-based ExpressTaxFilings support team a call anytime, just like you would with ExpressTaxExempt. Both teams are available Monday - Friday from 9 AM to 6 PM EST at 704.684.4751. They’re also available via live chat and offer 24/7 email support at support@ExpressTaxfilings.com.
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Keep Your Nonprofit Off The IRS Radar with These Tips






More often than none, I find myself speaking to the head of an organization whose nonprofit status was revoked. It came as a complete surprise them — he thought the organization was in good standing, but ever since the officer who handled their tax filings left, no one had actually checked.

Unfortunately, this isn’t a rare case from my experience. There are many nonprofits who aren’t aware of everything it takes to stay in compliance with IRS requirements — and sooner or later, they get the dreaded “status-revoked” letter in the mail.

If you’re unsure whether your nonprofit is in good standing, you’ve come to the right place.

In this post I’ll cover why compliance is mandatory, the risks of noncompliance, and a comprehensive checklist to ensure your nonprofit stays compliant every year.

Nonprofit compliance laws are put in place to protect the public and ensure nonprofit organizations do not abuse their financial advantages. The ability to be exempt from federal and state taxes, along with having access to public funding, causes nonprofits to be held to a high standard by the government.


Why Do Nonprofits Have to Stay Compliant?


Nonprofit compliance laws are put in place to protect the public and ensure nonprofit organizations do not abuse their financial advantages. The ability to be exempt from federal and state taxes, along with having access to public funding, causes nonprofits to be held to a high standard by the government.

Following these necessary compliances is also a vital component to the success and effectiveness of a nonprofit organization.


The Penalties for Noncompliance Aren’t Worth The Risk

Although 501(c)(3) nonprofits receive major financial benefits from becoming an incorporation, the penalties they can receive for not complying are very serious and can become rather costly.



To stay compliant, nonprofits must submit the appropriate tax form for their organization in the Form 990 Series. This form collects information about the income and expenses of an organization as well as other pertinent information. Failure to file this form annually can result in a number of significant penalties, such as:
  • A fine of $20 per day
  • Automatic revocation of 501(c)(3) status if the form is not filed for three consecutive years.
  • States can administratively dissolve a nonprofit corporation and impose high financial penalties. Organizations can also be prevented from receiving grants or large donations.

This Nonprofit Compliance Checklist Covers Everything You Need to Know   


In order to avoid noncompliance penalties or revocation of your organization’s tax-exempt status from the IRS, there are several things that must be taken care of annually for your organization.

Here is a checklist of everything you need to do to ensure your nonprofit is compliant with the IRS every year. It’s a good idea to save this checklist for your reference:
  • Gather your organization’s records (financial records, organization information, etc.).
    • You can gather and update your records anytime during the year.
  • Ensure your current tax exempt status is up-to-date.
  • File the Form 990 Series (990-N, 990-EZ, 990 or 990-PF) annually.
  • Review your State Nonprofit Requirements and ensure your registration is updated.
  • Submit an Annual Filing Form to the Corporation Division of the Secretary of State. Depending on your state, filing requirements may differ. Contact your state for details.
  • Register and maintain a License to Fundraise (Charitable Solicitation Registration).
  • Maintain State-Level Tax Exemption with your State Revenue Department.
  • Keep accurate & complete records and also have procedures in place to keep these records updated.
    • Some examples of records to keep include: Contributors Information, Expenses, Grants Written & Received, Accrued Expenses & Revenue, Bank Statements, Cancelled Checks, IRS Letter of Determination, Form SS4, Previous Tax Filings, and Articles of Incorporation  
  • Conduct a Leadership Transition Meeting at the end of each term  

Whether you are a well-established nonprofit organization or simply considering starting one, maintaining compliance with the IRS takes time and hard work. However, the ultimate reward comes from the peace of mind you will experience from never having to worry about losing your organization’s tax exempt status. 

To find detailed information on charity regulations, tax filings and nonprofit corporation filings for your specific state, click here. Maintaining the necessary compliance of your nonprofit organization requires effort, but can be handled successfully, especially with the help of an IRS-Authorized e-file provider, like ExpressTaxExempt.  
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Blessings on Blessings: The 411 on Earnings For Clergy

Clergy.jpg
A familiar passage of scripture found in Luke 6:38 says: “Give, and it shall be given unto you; good measure, pressed down, and shaken together, and running over, shall men give unto your bosom…”

Although financial blessings are greatly appreciated by all mankind, men and women of the cloth should take some precautionary measures when accepting monies for their ministerial services.

Licensed, Commissioned, or Ordained ministers are considered to be common law employees of a church, employed to provide ministerial services.

Some exceptions to this classification are made to those such as traveling evangelists who are self-employed under the common law.

As a minister that performs ministerial services, all earnings, including wages, offerings, and fees received for performing marriages, baptisms, funerals, etc., are subject to income tax, whether the amount was earned as an employee or self-employed person. The way you treat these expenses (related to these earnings) differs if you earn the income as an employee or as a self-employed person.

Church Employee vs. Self-Employed

Generally, clergy is considered to be an employee if the church or organization has the legal right to control what the clergy does and how they do it, even if there is considerable discretion and freedom of action provided.

As a minister, if a congregation employs you with a salary, you are generally a common-law employee of the congregation and your salary is considered wages for income tax that can be withheld.

Amounts of money received directly from members of the congregation, including fees for performing marriages, baptisms, or other personal services, are generally earnings from self-employment for income tax purposes.

NOTE: The salary you receive from a congregation and fees received from members of a congregation are subject to self-employment tax.  

Social Security/Medicare


Regardless of a clergy’s status under common law, ministerial services performed by clergy are considered self-employment earnings and are generally subject to self-employment tax.


Deductions

If you plan to itemize your deductions when filing, you may be able to deduct certain unreimbursed business expenses that are related to your services as a common-law employee on Form 1040, Schedule A (Itemized Deductions). Other forms that you could utilize when filing are:
  • Form 2106 (Employee Business Expenses)
  • Form 1040, Schedule C (Profit or Loss From Business - Sole Proprietorship)
    • This form is used if you are reporting self-employment income such as offerings or fees received for performing marriages, baptisms, funerals, etc.)
  • Form 1040, Schedule C-EZ (Net Profit From Business - Sole Proprietorship)

Housing For Clergy

Minister’s who have been provided a parsonage (home) may exclude the fair rental value of the home, including utilities. Please note that the amount excluded cannot be more than reasonable compensation for the minister’s services.

Also, minister’s who receive a housing allowance may exclude the allowance from gross income to the extent that it is used to pay expenses in providing a home. The amount excluded cannot be more than the compensation of the minister’s services.

If a minister owns their own home, deductions can still be claimed for mortgage interest and real property taxes. If the housing allowance exceeds the lesser of the reasonable compensation, the fair rental value of the home, or actual expenses, it must be included in the amount of the excess in income.  

NOTE: The minister's employing organization must officially designate the allowance as a housing allowance before paying it to the minister. Also, the fair rental value of a parsonage or the housing allowance is excludable only for income tax purposes. The minister must include the amount for self-employment tax purposes.

Exemption from Self-Employment Tax:


Did you know that clergy could request exemption from self-employment tax?
Yes, ministers can request an exemption from self-employment tax for their ministerial earnings, if they are opposed to certain public insurance for religious reasons. Exemption can NOT be requested for economic reasons.

In order to request this exemption, one must file Form 4361 (Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders and Christian Science Practitioners).  This form must be filed by the due date of the minster’s income tax return (including extensions) for the second tax year that the minister has net earnings from self-employment of at least $400.

Moving Forward

As you continue to do the work of the Lord and make a difference in the lives of others daily, remove the burden of having to figure out how to file your taxes. With ExpressTaxExempt, we provide a simplified e-filing process that will suit all of your filing needs. Visit our website and save even more money when you e-file with our recently reduced filing rates! We’re available to assist you via phone at 704.839.2321 on Monday through Friday from 9 a.m. to 6 p.m. EST or reach out to us 24/7 via email at support@ExpressTaxExempt.com.
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Maintaining Exempt Status with Unrelated Business Income

Lady Calculating Unrelated Business Income for taxesWhen filing either a Form 990 or a Form 990-EZ, you’ll have to report any income that was received outside the normal activities of your organization. Even though your organization may be tax-exempt, income from unrelated business activity can be taxed at corporate income tax rates.  
Before discontinuing any activities that could bring in taxed income, you should understand that tax-exempt organizations are allowed to participate in a regulated amount of business activities that are unrelated to its exempt purposes. Unrelated Business Income becomes taxable if it meets the following qualifications:

Income From a Trade or Business:

A trade or business includes any activity done for the creation of income either from selling goods or from the completion of services. Generally, the IRS sees it as any endeavor motivated by making a profit; therefore, unrelated business income tax can be applied broadly and could cover many activities done through your exempt organization.

Trade or Business is Regularly Carried On:


“Regularly carried on” basically means how often and in what method the business is conducted. Even if your activity is not done year round, it could still be considered as “regularly carried on” if the activity is common to the frequency and method of for-profit organizations.

Example: If a for-profit company normally does an activity seasonally, and your exempt organization does that same or similar seasonal activity, then it would be classified as “regularly carried on.” On the other hand, something like a one-time only sale of property wouldn’t fall in this category.

Trade or Business isn’t Substantially Related:


Of course, for any activity to be considered as unrelated business, it must not be substantially related to the main purpose of your exempt organization. Regulations state that business activities must essentially contribute to the execution of your exempt organization’s purpose. If not, it’s considered unrelated, and any income made can be taxed.

As with any other tax stipulations or rules, there are some exceptions and modifications. Contact your local tax professional if you find yourself in an unspecified situation with unrelated business income.



Word to the Wise:


Just because your exempt organization can participate in unrelated business activity doesn’t necessarily mean it always should. As mentioned earlier, authorization of unrelated activities should be limited. If operating an unrelated business becomes the primary purpose of your exempt organization, you would risk losing your tax-exempt status.

Report any Unrelated Business Income through your Form 990 or Form 990-EZ with ExpressTaxExempt. We work closely with the IRS to provide you the most secure, easy, and accurate tax e-filing experience. Our servers are encrypted, McAfee secure certified, and protected by SSL (Secure Sockets Layer). Your information goes directly to the IRS and no one else.

For any assistance or questions about 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., EST), by email (support@expresstaxexempt.com), or by live chat (www.expresstaxexempt.com).
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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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