How do you go about setting up a tax-exempt organization?
When you're setting up a charity or other non-profit organization, the steps involved can seem confusing, especially when you're not being paid for the process. Fortunately, it's relatively easy to get through the process and register your tax-exempt organization.
Here are a few steps to help you get started.
Start with a plan. Setting up a document similar to a business plan helps you determine the best way to get your organization established and moving successfully. Research what name you wish to use and whether it's available for use in your state. You'll need to have between one and three directors, prepare by-laws and then hold a meeting with the directors and any other interested parties to appoint or elect officers for the organization.
Complete your articles of incorporation to found the entity. This happens on the state level, and will require a certain amount of information and planning to get started properly. Be aware that you'll need to include information on the organization's purpose, inurement of income, legislative and political activities, operational limitations and a dissolution clause.
Apply for your federal employee ID number and any state-required tax ID numbers, licenses, permits, registrations or exemptions. You'll need to have this paperwork in place prior to applying for your non-profit organization status. It can include charitable solicitations registration and exemptions from corporate and sales taxes.
Apply for 501(c)3 status with the IRS. Once you've finished filing your articles of incorporation, you can start filing paperwork with the IRS. Form 1023 is a rather detailed piece of paperwork at 28 pages long, so you may want to have a second person review the information entered.
Once you're approved, make sure you remain in compliance. You'll have reports you'll need to file with different agencies on monthly, quarterly or annually, depending on requirements. Consider making checklists of which items need to be filed to keep up to date.
Setting up a charity as a 501(c)3 can seem like a difficult process, but following these steps can make it much easier. If you need help with getting your paperwork in order, our business professionals can help. Contact AccountRely today and see what a difference the personal touch can make in your organization's setup.