Your NFP’s Form 990 – How to Optimize It

by | Jun 29, 2023 | PKF Texas - The Entrepreneur's Playbook®

If you’re a not-for-profit, chances are you should know what a Form 990 is because it is essential for your organization. Why? Find out in this episode of PKF Texas – The Entrepreneur’s Playbook® featuring PKF Texas Tax Director, Emily Smikal, CPA, who discusses its importance and how to best fill out the information.

Jen: This is the PKF Texas – Entrepreneurs Playbook®. I’m Jen Lemanski and I’m back once again with Emily Smikal, one of our Approachable Advisors™ and the head of the tax side of our not-for-profit practice. Emily, welcome back to the Playbook.

Emily: Thanks for having me, Jen.

The Form 990’s Importance

Jen: So, we’ve talked over the years about different variations of Form 990s. How important is a Form 990? Does somebody really have to fill it out every single year?

Emily: That’s a good question, Jen, and one I get often because most 990s don’t actually compute any tax. So, I could see why some would assume it’s just a formality to get the IRS off your back for the year. But really that’s far from the truth. It really could be used as such a powerful tool for the organization.

Jen: So, what makes it a powerful tool?

Emily: Well, unlike tax filings for individuals or for-profit organizations, an organization’s 990 is actually accessible by the public. So, any previously filed Form 990, the IRS publishes it to their website. And then there are also these charitable watchdog organizations that pull these 990s down and collect other information about not-for-profit organizations, and they publish them to their website. And GuideStar is an example of that.

Filling a Form 990 Out Effectively

Jen: So, if it’s public knowledge and they want to make sure that it’s filled out fairly completely.

Emily: Right, of course they want to make sure the numbers are correct and other data. But really, a 990 could be used to tell the story over the organization. So, because it’s accessible to the public, make sure that the public can understand by looking at your 990 what you did that year – brag about it. Be detailed when you’re talking about your organization’s mission, its accomplishments for the year.

For example, let’s say your charitable mission is to feed starving CPAs – probably not one – but if it was, don’t just put, “We fed CPAs.” Put a number on it, “We fed 926 starving CPAs this year in Houston, Texas.” Be more descriptive that way. Your 990 can really be seen as like an annual report for your accomplishments for the year using the resources that you had.

Jen: So, do people actually look at these Form 990s, like the general public?

Emily: Well, sure. Anyone can view them because they are public, but really consider that current or potential donors or grantors could be looking at this to gather more information about the organization to make sure the funds that they have are being used appropriately. They could really be using this as a decision-making tool and whether they want to contribute to your organization.

The Due Date

Jen: Being pretty detailed… it’s going to take a little bit of time to fill out that Form 990. When is it due?

Emily: Well, a 990 is due to the IRS on the 15th day of the fifth month after the end of the organization’s calendar year. So, if it’s a calendar-year organization, it would be due May 15th. Now you can file an extension for a 990 for six months. So, for a calendar-year organization, that could extend it to November 15th.

One last thing I want to point out is, as with most things dealing with the IRS, they’re a little bit delayed in posting 990s to their website. So, don’t be surprised if someone comes to your organization directly and asks for a copy of previously filed 990s rather than them just waiting on the IRS to post them.

Jen: We’ll get you back to talk about some more not-for-profit topics. Sound good?

Emily: Sounds great. Thank you.

Jen: This has been another thought leadership production brought to you by PKF Texas – The Entrepreneur’s Playbook®. For more information about this and other topics, visit Tune in next week for another chapter.

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