Creating a nonprofit or charitable organization isn’t as easy as getting all your buddies together and doing community work for a noble cause. And at first glance, it may seem impossible with all the start-up costs and legal forms required.
Though it may be a challenge, and take lots of work, it is possible to break the process down into its essential phases. With these three steps, you can work towards building a recognizable tax-exempt organization sooner than you think.
File All Necessary Paperwork
Okay, take a breath and exhale – the sooner you realize you can’t avoid the paperwork, the easier you can embrace it and get done quicker. Keep in mind that there are application fees that accompany the majority of these forms, but they’re not as expensive as you may think.
You first need to register your organization’s name and receive an employer identification number – applying for an EIN is available for free on IRS website. Then, you have to get incorporated with your state; check your state’s chamber of commerce about incorporation and any associated fees.
Only after becoming incorporated with your state can you apply for tax-exempt status. Keep your ambitions and operating costs small to pay less in registration fees – you can build and grow later as time goes on. You want to file IRS Form 1023-EZ and pay the fee which was reduced this past July for small organizations.
Gain Trust & Supporters
While your applications are processing, use your waiting time connecting with potential donors and possible volunteers. No one is going to believe in your mission more than you, so prepare to have unyielding faith in what you what to accomplish and convey that to others.
By gathering contributors and volunteers at this point, you could cover some of the initial costs of your nonprofit. It’ll seem like you already have exemption status instead of a burdensome process of becoming tax exempt.
Use Community Resources
In most cases, you probably won’t be the only nonprofit or charity in your city. You may want to rely totally on fund grants, but they’re not as simple to obtain. Connect with other organizations in your community with similar missions and goals – they can share valuable insight about how your organization can best operate and possibly which grants favor your type of nonprofit.
After you build your organization and receive exemption status, you must file a tax return with the IRS each year which reports your nonprofit’s assets, structure, and activities. Based on your gross receipts, you could be fined a penalty for filing late or completely lose your tax-exempt status for not filing three years straight.
With ExpressTaxExempt.com, we offer the most streamlined, e-filing experience available – complete and transmit your tax-exempt return quicker than paper filing. No matter how large or small your organization, we have the 990 form or tax extension to accommodate your nonprofit or charity.
Assistance with the e-filing process is only a call away – contact our U.S. – based, customer support team at 704.839.2321, Monday through Friday from 9 a.m. to 6 p.m. EST or send an email to support@ExpressTaxExempt.com.