Have you thought about organizing your business as a
"Nonprofit Charitable Organization?"
Have a Clear Business Purpose for your Nonprofit-Organization
Maybe you should consider organizing your old or new business as a non-profit organization? Unlike a profit business, a non-profit company may be eligible for insurance benefits, such as sales, assets and tax exemptions State. Points IRS says that while most federal tax exemption non-profit organizations, the organization as nonprofit statewide does not automatically exempt it from paying federal income tax.
Another important difference between profit and non-profit is the treatment of capital gains. For-profit business owners and shareholders generally receive the profits. With a non-profit, money that remains after organization has paid its bills is given to the organization.
Remember, nonprofit still have to pay taxes, but some states they may be exempt from state sales tax. Consult your state to make sure that you understand how nonprofit State treated in your area. In addition, non-profit organizations can be beaten with unrelated to the corporate tax. This is the regular income from a trade or a company that's not closely related to charity goal.
Some types of non-profit organizations may receive contributions that are tax deductible for the person who contributes to the organization. Note that non profits are organized to offer some advantages the public.non-profit incorporated under the laws of the State in which they are established. For federal tax exemption, the organization must apply directly to the IRS. Two applications are necessary. First, you should get an identification number of the employer (EIN), then apply for recognition of exemption by filing Form 1023 (charities) or 1024 (Tax Exempt Other Organizations), with the filing fee is required.
The IRS identifies the different types of nonprofit organizations organizations through the tax code that are eligible for exemption condition. One of the most common ways is a 501 (c) (3), which is configured for charitable, educational, scientific, religious and literary working. This includes a wide range of organizations, to continue to education centers to outpatient clinics and hospitals.The IRS also requires that certain activities tax-exempt organizations can not do if they want to keep their tax exemption. For example, a section 50l (c) (3) organization can not intervene in political campaigns.
An organization exempt $ 1,000 or more of gross income an unrelated business must file Form 990-T and pay the tax income.
If your nonprofit has revenues of more than $25,000 per year must submit an annual report (Form 990) with the IRS. Form 990-EZ a lightweight version of 990 and is designed to be used by exempt small organizations whose total assets at the end of the year under $25,000. Form 990 asks you to provide information on the organization revenues, expenses and staff salaries that exceed $50,000. You may also have to adapt to a state similar requirement.For more information on IRS tax exemption, IRS download Publication 557 (Regarding the types of tax-exempt organizations) in the IRS website.