The Form 990 is a very complex IRS tax form. It requires a lot of financial information from tax exempt organizations. There are several different sections of the Form 990 and each requires a different set of information related to the tax exempt organization’s financial activities. In this article we are breaking down the Form 990 instructions and simplifying the process as much as possible.
How to Fill Out Form 990
The Form 990 has 12 parts, we are breaking down each of them. For even more detailed information, visit
Part I is a summary section. In this portion of the form you will need to provide information about the organization’s basic business details as well as more specific information about the organization’s revenue, expenses, and assets.
Part II-Signature Block
Part II is all about the signature. This signature must come from the authority of this organization, for example, the Executive Director. This is also where you will indicate that you used a Paid Preparer. They will need to list their information as well as the name of their firm and PTIN.
Part III-Statement of Program Service Accomplishments
This is your organization’s opportunity to discuss your mission related activities and programs. You should explain your organization’s mission and the accomplishments that you have made in the last reporting tax year.
Part IV- Checklist of Required Schedules
This portion of the Form 990 is a series of “yes” or “no” questions that help you determine which Schedules you will need to complete and attach.
Part V- Statements Regarding Other IRS Filings and Tax Compliance
In Part V of the form, you will be required to list other filings that your organization has made to the IRS in the past tax year.
Part VI- Governance, Management, and Disclosure
You will need to provide information on your board of directors, policies pertaining to management of the organization, and policies on disclosure.
Part VII- Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors
This section delves even further into the organizational structure of your nonprofit. You will need to include the salaries of your highest paid employees and any independent contractors.
Part VIII- Statement of Revenue
This is an in-depth breakdown of your organization’s revenue. You will need to be prepared to provide precise numbers as well as the source of the revenue. You will need to indicate if any of the income is non business related.
Part IX- Statement of Functional Expenses
This is an in-depth look at the total expenses of your organization. You will need to break down your expenses to show the IRS what percentage of was related to overhead costs, program expenses, and fundraising expenses.
Part X- Balance Sheet
You will need to complete a balance sheet to show a complete financial snapshot of your organization. This provides a line by line, detailed breakdown of assets and liabilities.
Part XI- Reconciliation of Net Assets
This section compares the changes in net assets and investment income from the beginning of the fiscal year to the close of it.
Part XII- Financial Statements and Accounting
Here, you will provide details regarding the accounting method that your organization utilizes.
How To File Form 990 Electronically
All tax exempt organizations with deadlines beginning on August 1, 2019 will be mandated to file electronically by the IRS. If you have always paper filed this form, don’t worry!
The change won’t be a difficult one. E-filing is actually more convenient for you and this method allows the IRS to process your Form 990 at a faster rate.