While nonprofit organizations are often considered tax-exempt, the reality is far more complex. Many nonprofits, including private foundations, face tax obligations that require careful navigation. At AAFCPAs, our specialized team of tax professionals helps nonprofits address these nuanced tax issues, ensuring full compliance and optimizing your tax position.
Federal Forms 990
AAFCPAs provides specialized advisory services to nonprofit organizations on the IRS’s federal Forms 990 series, supporting compliance with precision and clarity. Beyond meeting regulatory standards, we help nonprofits use the 990 forms as a strategic tool to showcase financial integrity, mission impact, and operational efficiency. This approach not only minimizes audit risks and strengthens fundraising credibility but also optimizes transparency, helping organizations effectively communicate their value to stakeholders and bolster public trust.
Unrelated Business Income Tax (UBIT)
Though exempt from federal and state income taxes, nonprofits may be subject to Unrelated Business Income Tax (UBIT) if they generate revenue from activities unrelated to their exempt purpose. If your nonprofit is involved in for-profit-like business activities, these may trigger tax obligations. At AAFCPAs, we not only help you determine whether UBIT applies but also develop comprehensive cost allocation plans that minimize your tax burden. Our goal is to ensure you are fully compliant while mitigating potential liabilities.
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Multistate Filing & Compliance
For nonprofits operating across state lines, navigating multistate filing requirements can be a significant challenge. Our tax advisory team has deep expertise in managing these complex regulatory obligations, ensuring that your organization meets compliance standards in every jurisdiction where it operates. From charitable registrations to income and sales tax filings, we streamline the process, so you can focus on advancing your mission nationwide without administrative hurdles or compliance risks.
Employee Payroll Taxes
Nonprofits are exempt from federal unemployment tax, but not always from state unemployment requirements. In many states, for instance, nonprofits can either pay into the state unemployment system or self-insure. Opting to self-insure may benefit nonprofits with low employee turnover. We assist clients with understanding these payroll tax options and selecting the most cost-effective approach for your organization.
Property Taxes
Property tax exemptions for nonprofits vary by state. In many states, nonprofits must meet specific eligibility criteria and follow detailed procedures to qualify for real or personal property tax exemptions. AAFCPAs guides nonprofits through the property tax exemption process, ensuring that all state-specific requirements are met.
Sales and Use Tax
Sales and use tax regulations for nonprofits differ across states. In many states, purchases made by a nonprofit are exempt if the nonprofit presents the necessary forms and the goods are used for its stated mission. However, if your organization sells goods in the regular course of business, it may need to collect and remit sales tax, with certain exemptions for fundraising activities. Our team helps nonprofits navigate the intricacies of state-specific sales tax regulations to remain compliant.
Net Investment Income Tax
Private Foundations, while a nonprofit, are subject to a tax on their net investment income. This tax applies to income generated from interest, dividends, rents, and other investment activities. At AAFCPAs, our tax advisors assist nonprofits in accurately calculating their tax liability, ensuring compliance with IRS regulations, and exploring strategies to minimize their tax burden.
Foreign Investment Reporting & Compliance
In today’s globalized world, nonprofits increasingly engage in cross-border activities and investments. Our advisors ensure that your foreign activities align with your organization’s tax-exempt purpose and mission. We help nonprofits navigate complex IRS reporting requirements, such as those for foreign investments and grants, to maintain compliance and avoid risks to tax-exempt status. By proactively managing these activities, we support your organization in confidently pursuing its global impact objectives without compromising compliance or mission alignment.
Consulting Attorneys
In addition to a deep bench of CPAs, our team of in-house Consulting Attorneys guide clients through critical matters such as nonprofit formation, 501(c)(3) tax-exempt applications, bylaws review, governance policies, and more. Whether you need assistance with contracts, employment matters, real estate, trademark registration, or mergers and dissolutions, we are committed to helping you navigate the complexities of nonprofit management at every stage.
AAFCPAs: Trusted Tax Compliance for Nonprofits
Navigating state and local tax issues can be daunting for nonprofit organizations. AAFCPAs’ experienced tax professionals specialize in nonprofit tax laws and provide tailored guidance, helping you avoid penalties, optimize your tax position, and ensure full compliance with state and local tax regulations.
Let us help you manage your nonprofit tax obligations so you may focus on what matters most—your mission.
Contact AAFCPAs
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