This spring tax-exempt organizations all over the United States are in the middle of a tight deadline. It is officially declared by the Internal Revenue Service that non-profit organizations have to file their annual tax returns before May 15, 2025, for the sake of keeping their records in good standing.
Those who miss the deadline will not only be penalized but they also stand the risk of losing the irreplaceable tax-exempt status.
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What Sort of People are Affected the Most
All nonprofit groups which run on a calendar-year basis are supposed to file their mandatory forms in May.Among these are public charities, foundations, and other groups that are exempt from federal tax.
Different sizes and types of organizations are expected to fill out different forms, such as Form 990, Form 990-EZ, Form 990-N (e-Postcard), Form 990-PF for private foundations, or Form 990-T if they report unrelated business income.
A clear sign that most forms will have to be submitted through the electronic system has been given by the IRS, thus speeding up the process, although the choice to mail the returns has been removed.
What Happens If You Fail to Do It
Those organizations that overlook the May 15 deadline may have to face severe penalties as a result.If a non-profit does not manage to file the required form for three consecutive years then the IRS has the authority to revoke the organization’s tax-exempt status without any notification.
The organization losing such status would be the requirement to be liable for income tax and, moreover, donors might not be able to deduct contributions.Acquiring the recognition of tax-exempt status back is a lengthy and expensive procedure which most groups do not want to happen to them.
A Quick Lifeline: Filing Extensions
There is an escape route available even for those groups who are short of time. To be more specific, within the May 15 deadline, non-profits can file Form 8868 to request a six-month extension.
That said, the extension only applies to the documents to be submitted and not to any tax payments owed. This would mean that the taxes which a non-profit may have as regards the unrelated business income need to be settled within the set time to avoid any fines and penalties.
Common Mistakes Nonprofits Should Watch Out For
According to the IRS, the most frequent mistakes include incomplete forms, no schedules, and malfunctioning tax years.
We remind the groups that everything should be in place before they send back the forms and documents. It is the most pathetic situation whereby simple mistakes can lead to delays, penalties, or even cause unnecessary IRS audits to be carried out.
Push Toward Digital Compliance
Smaller non-profits that are eligible to file the Form 990-N (e-Postcard) are no more allowed to use paper and are required to use IRS 990-N online platform. The larger ones that have to file Form 990, 990-EZ or 990-T must use approved e-file providers.
IRS hints that the change of filing to digital process is to minimize errors, quicken the process and, therefore, make tax filing pretty easy for most Organizational.
Final Message to Nonprofits
Literally, Nonprofits have not got a lot of time to collect their files, prepare their forms, and send back the documents to the IRS.
What May 15 stands for is a clear unmovable deadline and the consequences that are the result of its breach are no less than devastating. Nonprofits that act now can protect their tax-exempt status, avoid costly penalties and keep their attention on their cause.
