{"id":2009,"date":"2021-10-27T14:45:00","date_gmt":"2021-10-27T19:45:00","guid":{"rendered":"https:\/\/nonprofit-ninjas.com\/?p=2009"},"modified":"2021-10-27T08:11:47","modified_gmt":"2021-10-27T13:11:47","slug":"does-our-nonprofit-organization-have-to-pay-taxes","status":"publish","type":"post","link":"https:\/\/nonprofit-ninjas.com\/index.php\/2021\/10\/27\/does-our-nonprofit-organization-have-to-pay-taxes\/","title":{"rendered":"Does our Nonprofit Organization have to pay taxes?"},"content":{"rendered":"\t\t
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Does our Nonprofit Organization have to pay taxes?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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When people think about forming a “nonprofit” – hoping they’ll obtain grant funding – they don’t realize that in order to “qualify” for grant funding, they need to be formally recognized as a federally tax-exempt, nonprofit corporation. It’s the moniker \u201cnonprofit\u201d that can be confusing; in fact it’s not quite accurate: “tax-exempt\u201d is the proper terminology.<\/p>

In reality, tax-exempt organizations are actually allowed to make a profit!\u00a0 What\u2019s important to remember is the IRS looks at where that profit (the money your organization earns) comes from and where it\u2019s used, when managing a \u201cnonprofit\u201d organization.\u00a0 Nonprofits do not pay federal income tax on funds that are obtained from legitimate sources and which are to be used for their stated programs: for example grant funding.<\/p>

Additionally – you’ll need to check to be sure, but most states will exempt an organization from income taxes, sales taxes, property taxes, and more, but in most states you will need to request such exemptions.<\/p>

Keep in mind, however, that just like individuals and any for profit business, \u201ctax-exempt\u201d does not mean you won\u2019t have to file taxes.\u00a0 Each year you should file a 990 form with the IRS, so keep good financial records.\u00a0 If you miss 3 years in a row \u2013 they will revoke your tax-exempt status!<\/p>

Unrelated Business Income (UBI) is an important factor in determining if you have to pay taxes, when you file your organization’s income tax returns every year. See\u00a0UBI Article<\/a>\u00a0to learn more about this subject.<\/p>

For any income-tax related issues, you should always consult with a tax professional, but if you have any questions on the information above, feel free to Comment below, and we’ll get right back with you!<\/strong><\/p>

Have a question or need help setting up your tax-exempt, 501(c)(3), nonprofit organization?<\/strong>\u00a0EMAIL\u00a0us directly<\/em>, and we’ll get back with you ASAP! Just click\u00a0HERE<\/a><\/span>\u00a0to send an email!<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t

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Other FAQs<\/h5>