Alright, raise your hand if you’ve ever missed a deadline?
Yeah, that’s what I thought.
It happens to the best of us. And because we know it’s bound to happen, we suggest e-filing Form 8868 for a tax exempt extension. Maybe we’ve told you this before, but we figured it’s time for a little refresher.
What happens when you file Form 8868? If you’re a tax exempt organization and you file, you get an automatic 3 month addition to your filing deadline. Form 8868 deadlines are the same as Form 990 deadlines, which are the 15th day of the 5th month after the end of an organization’s financial year. For your first extension, you don’t have to provide a reason—which is why they call it automatic.
If you find that your organization still needs an extension after those three months, you can file for a second extension for another three months! The second extension is not automatic, and you may require an explanation. And of course, you can only file for the second extension if you filed for the first one (Part I).
Since the first extension is automatic, it makes sense to file for one if you’re unsure about the upcoming deadline in any way.
What are other ways you can prepare for a filing deadline? First, make sure your record keeping is spot on. We have plenty of tools to help with gifts and contributions, record keeping, and filing. Maybe you can create a checklist to maintain tax-exempt status going into a deadline that will streamline the whole process!
What if you miss the deadline and file late? If you’re e-filing Form 990-N (the e-Postcard), there is no penalty. However, if you don’t file a return for three consecutive years, your tax exempt status will be revoked. If an organization whose gross receipts are less than $1,000,000 for its tax year files its Form 990 after the due date (including any extensions), without a reasonable cause for filing late, the IRS imposes a penalty of $20 per day for each day the return is late. The penalty increases to $100 per day, up to a maximum of $50,000, for an organization whose gross receipts exceed $1,000,000.
Now, we know you have important work on your hands, so we try to make things as easy as we can around here. If you have any questions rolling into the next deadline, send us an email or a live chat and we’ll help you out. If you’re more of a phone person, you can reach us at 704.839.2321.
How does your organization prepare for upcoming deadlines?