Form 990 Instructions for 2023 How to Fill Out Form 990?

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Form 990 Filing Instructions for 2023:
Step-by-Step instructions

- Updated September 11, 2024 - 2.00 PM - Admin, Tax990

Form 990 is an annual information return that must be filed by most tax-exempt organizations, nonexempt charitable trusts, and section 527 political organizations with gross receipts of $200,000 or more or total assets of $500,000 or more to report the annual information required by Section 6033 to the IRS.

For these organizations, the deadline to file Form 990 is the 15th day of the fifth month after their accounting period ends.

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You can find out more details on how to complete Form 990 in this article.

IRS Form 990 Instructions for 2023

Form 990 includes 12 parts. Here are step-by-step instructions for completing each part.

Basic information about your organization

You are required to start the form by providing basic information about your organization.

Box A - Start and end dates of the corresponding tax year

Box B - Purpose of the form (Address change, Name change, Initial return, Final return/terminated, Amended return, or Application pending)

Box C - Name and address of the organization

Box D - Employer identification number (EIN)

Box E - Telephone number

Box F - Name and address of the principal officer

Box G - Gross receipts

Box H (a-c) - Check if it’s a group return and enter the Group exemption number

Box I - Check the applicable section of your organization’s tax-exempt status (501(c)(3), 501(c)( ), 4947(a)(1) or 527)

Box J - Website

Box K - Form of the organization (Corporation, Trust, Association, or Other)

Box L - Year of formation

Box M - State of legal domicile

Form 990 Part I - Summary

This part has 4 subparts that require you to summarize your organization’s financial information.

Activities & Governance

Revenue

Expenses

Net Assets or Fund Balances

Activities & Governance (Lines 1 - 7)

Enter your organization’s primary mission or most significant activities.

Enter details about the number of voting members, volunteers, and employees who joined your organization in the corresponding calendar year.

Then, mention details about your organization’s unrelated business income.

Revenue (Lines 8 - 12)

Enter the values of revenue generated in current and prior years from various sources such as contributions and grants, program service, investment income, and others in the prior year and current year.

Add lines 8 through 11 and enter the Total revenue.

Expenses (Lines 13 - 19)

Report all the expenses incurred as grants, member benefits, employees’ compensation, fundraising, and others in the prior year and current year.

Add all the values and enter the total expenses.

Then, determine the revenue less expenses by subtracting total expenses from total revenue.

Net Assets or Fund Balances (Lines 20 - 22):

Enter the values of Total Assets, Liabilities, and Net Assets or Fund Balances at the beginning and end of the year.

Form 990 Part II - Signature Block:

This section requires signature and authorization from any authorized personnel of your organization, including the president, vice president, treasurer, assistant treasurer, chief accounting officer, or other corporate officers (such as a tax officer)

If the form is prepared by a paid preparer, their details should be included in this section.

Form 990 Part III - Statement of Program Service Accomplishments:

The activities conducted by the organization serving its exempt purpose are called Program service accomplishments. This part requires you to elaborate on your organization’s program service accomplishments during the tax year.

Line 1:
Describe the primary mission (exempt purpose) of your organization.
Lines 2 & 3:
Check ‘Yes’ if your organization has conducted any new program services that weren’t reported in the prior year's return and if any changes have been made to how it conducts these services.
Lines 4a - 4e:
Provide details about any three of your organization's largest program service accomplishments during the corresponding tax year.

If there are any other program services, provide details about them in Schedule O. Enter the total expenses incurred on program services.

Note:

For each program service, Sections 501(c)(3) and 501(c)(4) organizations must report the amount of grants, expenses, and revenue.

Form 990 Part V - Statements Regarding Other IRS Filings and
Tax Compliance:

In this part, you must provide information regarding the other IRS filings that you may have completed or will complete later.

Lines 1 and 2:
Enter the numbers reported on the specified boxes or lines of Forms 1096, W-2G, and W-3 if applicable. If not, enter -0-.
Lines 3 - 6:
Enter “Yes” for the following questions,

If your organization has unrelated business income over $1000 and filed 990-T.

If your organization has an interest in financial accounts in any foreign country.

If your organization was a party to a prohibited tax shelter transaction and filed Form 8886-T.

If your organization’s annual gross receipts are greater than $100,000 and solicited any contributions that were not tax deductible as charitable contributions.
Lines 7 - 13:
These lines are applicable only to specific organizations:

Line 7 - Complete if the organizations receive any deductible contributions under section 170(c)

Lines 8 and 9 - Complete if sponsoring organizations maintaining donor-advised funds

Line 10 - For section 501(c)(7) organizations

Line 11 - For section 501(c)(12) organizations

Line 12 - For section 4947(a)(1) non-exempt charitable trusts

Line 13 - For section 501(c)(29) qualified nonprofit health insurance issuers
Lines 14 - 17:

Indicate if your organization received any payments for indoor tanning services and filed Form 720. Provide details regarding any section 4960 tax and excise taxes, and confirm whether Form 4720 was filed if required.

If your organization is classified under section 501(c)(21), mention any activities that resulted in an excise tax under sections 4951, 4952, or 4953.

Form 990 Part VI - Statements Regarding Other IRS Filings and Tax Compliance

This part contains 3 sections that contain a series of ‘yes’ or ‘no’ questions regarding,

Section A. Governing Body and Management (Lines 1 - 9)

Mention the details of voting members, members or stockholders, and about governing body members.

Also mention if there are any significant changes to your organization’s governing documents and if the meetings are documented.
Section B. Policies (Lines 10 - 16)

Indicate whether your organization has any local chapters, branches, or affiliates. Additionally, confirm if you have a written conflict of interest policy, a whistleblower policy, and a document retention and destruction policy in place.

Also, mention if a complete copy of your 990 return was provided to all members of your governing body prior to filing the form.
Section C. Disclosure (Lines 17 - 20)
List the states that require a copy of Form 990, even if the organization has not yet filed with that state. Additionally, describe how you made your Form 1023 available for public inspection and provide details about the organization’s books and records.

Form 990 Part VII - Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and Independent Contractors

There are 2 sections in this part, which includes,

Section A. Officers, Directors, Trustees, Key Employees, and Highest Compensated Employees (Lines 1 - 5)

Provide details about the organization’s officers, directors, trustees, key employees, and the highest compensated employees, both current and former.

Indicate if you have listed any former employees, and specify if any employees received compensation exceeding $150,000 from any unrelated organization.

Note:

Answering “Yes” to any of these questions requires you to attach Form 990 Schedule J.
Section B. Independent Contractors
Provide details about any five of the highest compensated contractors and enter the total number of independent contractors who received more than $100,000.

Form 990 Part VIII - Statement of Revenue

This section requires you to provide detailed information on revenue generated from all sources. It is divided into four sections. For each section, please report the following applicable values:

Total revenue

Related or exempt function revenue

Unrelated business revenue

Revenue excluded from tax under sections 512–514

Contributions, Gifts, Grants, and Other Similar Amounts (Lines 1a - 1h)
Enter the amount of revenue generated as contributions or grants from federated campaigns, membership dues, fundraising events, and government.
Program Service Revenue (Lines 2a - 2g)
Enter the revenue generated from your organization's program services.
Other Revenue (Lines 3 - 10)
Enter the revenue generated from other sources such as investment income, investment of tax-exempt bond proceeds, gross rents, gross sales of assets and inventory, gaming, and fundraising activities.
Miscellaneous Revenue (Lines 11 and 12)
If your organization has generated revenue from any sources other than the ones mentioned above, you can report them here.

Form 990 Part IX - Statement of Functional Expenses:

In this section, you must report all expenses incurred for various functional purposes. It consists of four columns, which include:

Total expenses

Program service expenses

Management and general expenses

Fundraising expenses

Note:

Section 501(c)(3) and 501(c)(4) organizations must complete all columns. All other organizations must complete column (A).

Lines 1 - 26:
Enter the values of program service expenses, management, and general expenses, fundraising expenses for the grants & other assistance, benefits paid to or for members, other employee benefits, payroll taxes, service fees, lobbying, travel, occupancy, interest, royalties, occupancy, advertising & promotion, and more.

Form 990 Part X - Balance Sheet:

The balance sheet is an intricate part of Form 990. It should reflect the value of assets, liabilities, and net assets or fund balances at the beginning (A) and end of the tax year (B).

Assets (Lines 1 - 16):
Enter the values of different types of assets that your organization has in the form of cash, savings, investments, loans, land, buildings, and equipment. Report the value of Total Assets by adding all the values.
Liabilities (Lines 17 - 26):
Report the payable accounts and grants, deferred revenue, tax-exempt bond liabilities, secured and unsecured mortgages, notes, and loans payable to unrelated third parties Derive the value of Total Liabilities by adding all the values.
Net Assets or Fund Balances (Lines 27 - 33):
Report the values of net assets with and without donor restrictions, capital stock, retained earnings, endowment, accumulated income, and more.

Form 990 Part XI - Reconciliation of Net Assets:

The IRS requires you to complete this section to ensure that the value of net assets reported on Form 990 aligns with the financial statements.

Lines 1 - 10:
Enter the total revenue, expenses, net assets, or fund balances at the beginning and end of the year, gains, investment expenses, and prior period adjustments.

Form 990 Part XII - Financial Statements and Reportin

This part requires you to report details regarding your organization’s accounting method and financial statements.

Lines 1 - 3:
Mention the type of accounting method you used to prepare the form:

Cash

Accrual

Other
Mention whether your organization’s financial statements were compiled or reviewed and audited by an independent accountant.
Mention your organization’s requirement to undergo an audit or audits as set forth in the Single Audit Act and OMB Circular A-133.

Additional Filing Requirements for Form 990

The organizations filing Form 990 may also be required to report additional information by attaching various Schedules.

There are 16 Schedules available for Form 990 to provide more information about the organization. Failing to attach the required schedules may result in an incorrect filing, leading to IRS penalties.

Schedule A - Public Charity Status and Public Support

Schedule B - Schedule of Contributors

Schedule C - Political Campaign and Lobbying Activities

Schedule D - Supplemental Financial Statements

Schedule E - Schools

Schedule F - Statement of Activities Outside the United States

Schedule G - Supplemental Information

Schedule H - Hospitals

Schedule I - Grants and Other Assistance to Organizations, Governments, and Individuals in the U.S

Schedule J - Compensation Information

Schedule K - Supplemental Information on Tax-Exempt Bonds

Schedule L - Transactions with Interested Persons

Schedule M - Noncash Contributions

Schedule N - Liquidation, Termination, Dissolution, or Significant Disposition of Assets

Schedule O - Supplemental Information to Form 990

Schedule R - Related Organizations and Unrelated Partnerships

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Steps to File your Form 990:

Step 1

Add Organization Details

Search for your EIN, and our system will automatically import your organization’s details from the IRS. You can also enter the information manually.

Step 2

Choose Tax Year

Tax 990 supports current and previous years’ filings. Select the tax year for which you are filing and choose the appropriate Form 990.

Step 3

Enter Required Form Data

Provide all the necessary information to complete your Form 990.

Step 4

Review your Form Information

After entering all required information, review your form, make any necessary changes, and proceed.

Step 5

Transmit directly to the IRS

Once your form is reviewed and approved, you can transmit your Form 990 directly to the IRS.

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Article Sources

IRS Form 990: https://www.irs.gov/pub/irs-pdf/f990.pdf

IRS about Form 990: https://www.irs.gov/forms-pubs/about-form-990

IRS Form 990 instructions: https://www.irs.gov/pub/irs-pdf/i990.pdf

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