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Submitted by: Rustco Hong
The price of applying for a 501c3 nonprofit Federal tax exempt status is greater than those for state incorporation. The higher price nevertheless, is inconsequential with the numerous advantages or benefits that you could gain in the long run. The approval of your application is essential to the good results of your organization. The following info could help you in applying for your 501c3 nonprofit Federal tax exempt status, which would propel your organization to higher heights and success.
Charges
A 400 fee is charged if your typical gross receipts do not exceed $10,000 more than a 4-year period. On the other hand an $850 fee is charged for 501c3 nonprofit organizations that earn typical gross receipts that exceed $10,000 annually more than a 4-year period. Do not forget to file a Form 1023 application. The fees appear to become expensive but you should take into consideration the long-term and numerous benefits you could derive from achieving a 501c3 nonprofit status, so make it a point to remedy the application fee.
Reasons why you should apply for a 501c3 nonprofit status
You’d be recognized as a legitimate nonprofit organization and private donors, sponsors as well as other companies could be willing to donate, even big amounts of money because they are assured that this would be used appropriately. You would certainly earn your credibility with a 501c3 nonprofit status approval. Individual donors, companies as well as other organizations could be extremely motivated to donate to your organization simply because they too have tax reduction benefits, once they donate to a 501c3 nonprofit organization.
Things you need to apply for 501c3 nonprofit status
You have to total Form 1023 Application for Recognition of Exemption. You are able to acquire this form from the IRS web site. Data that you need to provide for your 501c3 nonprofit application consist of the name of your organization, the address, the purpose of your organization, the Articles of Incorporation, the financial strategy, the planned activities, and the website of your organization. There might also be separate sheets where you should clarify in detail your mission, goals and list of actions. You are able to evaluation your answers and talk about this using the organization’s board of director before finalizing them.
It is advisable to print the form and then discuss what your answers could be with your 501c3 nonprofit organization’s board of directors. You are able to flag questions you can not possibly answer because your company has not been more than 4 years in existence. You are able to also double check by using the Form 1023 Checklist. This would ensure that you have achieved all essential information and achieved all requested forms. After you’ve submitted your application to the correct address, the IRS might approve your application, or request for extra documents. It might also deny your application. This would set back your application, but do not give up. You can always appeal. You need to remedy or solve the problems although prior to you re-apply. Whatever you determine to complete, you need to find legal ways to obtain that 501c3 nonprofit status because this would be significantly beneficial to your organization.
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