How to Complete Part I of IRS Form 990-EZ

Instructions to complete Part I of Form 990-EZ - Revenue, Expenses, and Changes in Net Assets or Fund Balances

ExpressTaxExempt | October 14, 2020 | 990-EZ | No Comments

COVID-19 has changed the landscape of giving for most nonprofits. When it comes to your organization’s financial health, managing your tax-exempt status is one of the few things that has remained the same.

Here is what nonprofit leaders need to know when they file Part I of Form 990-EZ.

What is Form 990-EZ?

IRS Form 990-EZ is an annual form that allows tax-exempt organizations to report their financial information to the IRS. Form 990-EZ is a short form, compared to Form 990, but it still has several major parts for tax-exempt organizations to work through.

Part I of Form 990-EZ allows nonprofits to report revenue, expenses, changes in balances and net assets, and disclose where they use their funds.

Who needs to file IRS Form 990-EZ?

Tax-exempt organizations need to file a 990 series form with the IRS every year in order to protect their tax-exempt status. For smaller nonprofits, Form 990-EZ offers a shorter filing option.

Organizations whose gross receipts are less than $200,000 and total assets are less than $500,000 at the end of the tax year can choose to file Form 990-EZ. Click here for our top 3 tips for meeting your deadline.

Organization Details

The first thing you’ll need to do is tell the IRS who you are. Provide your organization’s name, address, EIN, and phone number.

Part 1 - Revenue, Expenses, and Changes in Net Assets or Fund Balances

Statement of Revenue

For this section of IRS Form 990-EZ, you’ll add up all the funds your organization received during the year. You will report how much your nonprofit made in the following categories:

Contributions, gifts, and grants
Program service revenue and government fees and contracts
Membership dues and assessments
Investment Income
Sale of any assets

After you list all these amounts, you can add them together and the total is your organization’s revenue for the tax year.

State Your Functional Expenses

In this section, you’ll show the IRS and the community exactly what it takes to run your organization. Reporting your expenses includes everything from how much it costs to rent and maintain your space to your employees’ benefits and salaries. You’ll also include any payments to independent contractors and any grants or amounts that your organization paid to individuals or other organizations. Don’t forget small operational costs like printing, postage, and shipping.

Click here for more instructions on filing Form 990-EZ.

Form 990-EZ Filing Tips for Nonprofits

When it comes to filing Form 990-EZ, the IRS recommends e-filing. ExpressTaxExempt eliminates the stress, with an easy filing experience that walks you through all your data-entry fields. With our built-in error check, you’ll catch mistakes that can lead to IRS rejection and expensive penalties. Click here for more on common Form 990 filing mistakes and how to avoid them.

Nonprofit organizations are instrumental in helping our communities navigate current events. We are here to help you e-file all your 990 forms for 2020.