Organizations with business tax exemption status through the IRS are allowed to solicit donations and generate revenue for nonprofit purposes. Businesses who are tax-exempt need to know how to obtain a business tax exempt number for your organization.
A number of entities can fall under the business tax exempt category — charities, schools, community organizations, governmental organizations, and more. In order to apply for 501(c)(3) status, the first step an organization must take is to file a standard entity registration with both the state and the federal government.
Once you’ve received your tax-exempt status, there’s an important number that you’ll need to obtain and use often throughout the existence of your organization.
How To Obtain a Business Tax Exempt Number For Your Organization
Follow These 4 Easy Steps to Receive a Business Tax Exempt Number:
Getting a business tax exempt number is actually fairly simple and can be done in 4 steps:
1) Develop and Organize Your Business
To be considered as an organized entity by the IRS, you must be either a corporation, trust or unincorporated association.
The first major step in developing and organizing your group is to contact your local Secretary of State or even an attorney to be properly formed as an entity and obtain the necessary documentation associated with the development of the organization.
2) Obtain an Employer Identification Number
Tax-exempt businesses all need an EIN; “EIN” stands for Employer Identification Number. If you’ve ever done anything tax related to a business or organization, you’ve probably heard the familiar acronym “EIN.”
This is number is required for functioning organizations and must be obtained through the IRS; even if the organization does not have employees.
Even tax returns are unable to be filed without an EIN. So this is definitely a “must have!”
3) File For Recognition of Exemption
This step is pretty straightforward. Simply file IRS Form 1023 to apply for recognition of exemption and wait for approval.
Once the application has been approved, an organization [and its EIN] is considered to be tax exempt and recognized as such through the government.
4) Check State Requirements for getting a Business Tax Exempt Number
After you have received your EIN and filed Form 1023, take a few moments to double check the tax exemption requirements for your specific state.
Contact the Department of Revenue or your state government to see if there are any other forms that need to be filed to secure the tax exempt status of your organization.
ExpressTaxExempt is Here To Help
As always, the ExpressTaxExempt team is here to help you as much as possible.
We’re just a phone call, email, or chat away if you ever have any questions or need assistance during any part of the e-filing process.
Feel free to contact our support team of e-file experts at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST. You can also reach us 24/7 via email with support@ExpressTaxExempt.com.