Starting a non-profit organization is a fantastic way to give back to your local or global community. Non-profit organizations help thousands of people, animals, and places each year. Since they are different from other businesses, there are certain tax considerations in running a non-profit.
If you’re on the fence about whether or not to start one, these considerations might help you make a decision. This is a very condensed list of just some of the tax considerations in running a non-profit. If you find yourself with even more questions about a non-profit, a for-profit organization, property taxes, and so forth, you may want to seek professional help.
Some tax considerations in running a non-profit include:
Tax Exemptions
As a non-profit, your business will be exempt from paying taxes because you’re giving your money to help others. Our government rewards people for doing that. This means your business can retain more funding than others because you are not paying into the tax system each year.
This does not mean you are making more money than other businesses; since you’re a non-profit organization, you will be making just enough money to do what you need to do.
Applications
You have to apply to be a tax-exempt non-profit. Once you have applied and been approved, the process doesn’t end there. Your approval can be revoked if you are not meeting the specific standards the IRS (Internal Revenue Service) has set for non-profits. If your approval or license is revoked, you can get it reinstated with some extra work.
Not All Non-Profits Or Not-For-Profits Are Tax Exempt
Without having the proper paperwork filled out each year and approved, your business or organization will have to pay into taxes. Keep this in mind when budgeting for your organization because you never know what might happen.
Accountants Are Important Come Tax Time
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