Table of Contents >
Chapter 43. Managing Finances >
Section 4. Understanding Nonprofit Status and Tax Exemption >
Understanding Nonprofit Status and Tax Exemption |
Tools & Checklists | Contributed by Jenette Nagy and Chris Hampton Edited by Phil Rabinowitz and Kate Nagy |
Checklist
Here, you'll find a checklist summarizing the major points contained in the text.
___You understand the importance of legal counsel when applying for nonprofit status and tax-exemption.
___You understand that nonprofit status is granted by the state, while the federal government grants IRS tax-exemption.
___You know the three types of federally recognized nonprofit organizations are a corporation, an unincorporated organization, and a trust.
___You understand that becoming a corporation is the most common choice for community organizations, because it is well understood, promotes continuity, and limits personal liability.
___You know that 501(c)(3) is the "charitable tax-exemption."
___You understand that it allows exemption from federal corporate and income taxes, and that it allows solicitation of tax-deductible contributions.
___You know there are a total of 26 different exemptions for different purposes.
___You understand that there are three ways to become tax-exempt: application, automatic recognition, and using a fiscal conduit.
___You understand the advantages of nonprofit status.
___You understand the advantages of federal tax-exemption.
___You understand the disadvantages of nonprofit and tax-exempt status.
___You understand when you should (and when you shouldn't) consider applying for such status.
___You understand how to apply for nonprofit status.
___You understand how to apply for federal tax-exemption.
___You know where to find inexpensive assistance.