Filing a 990: How it Can Benefit Your Church (and Your Church’s Donation Box)

Each and every year, thousands of nonprofit organizations file a Form 990–and while IRS regulations mean that all churches (that meet the requirements of 501(c)(3) status) are not required to file a 990, there are a number of reasons that you may consider doing so. The biggest reason, though? It can lead to an increase in donations from members of your church, and help you continue doing the good that you do.

Do Churches Have to File a 990?

Based on IRS regulations, churches (including integrated auxiliaries and conventions or associations of churches) that meet the requirements of 501(c)(3) status are not required to file an annual return or notice with the IRS. Therefore, these organizations are exempt from filing annual returns and are not subject to automatic revocation of exemption for failure to file. 

If Churches Don’t Have to File, Why Should They?

As mentioned above, IRS regulations automatically designate most churches as exempt from having to file an annual return. All other 501(c)(3) organizations and other tax-exempt parties must file, however, regardless of size or amount of contributions. And while churches may be exempt from reporting, there are a number of reasons why doing so may prove beneficial:

• Transparency: Churches are often the one type of nonprofit where the donors aren’t able to see where their donations are going or how they are being spent. By making this clear, potential donors are more likely to give.
• Accountability: Like the previous point, this one is all about being trustworthy to donors and contributors. A Form 990 shows what an organization brings in and spends, and even if a church doesn’t have to report this, it helps show donors that the money is being well spent.
• Increased Revenue: When your donors can see how the money is being spent and can see how much good you’re doing with it, you can expect to see an increase in those donors and their donations!

What Exactly Do I Need to File?

Now that you know why you might want to file a Form 990, you may find yourself wondering what exactly you need to file. Good news! It’s simple and easy to figure out what form you need based on their gross receipt:

• Form 990-N: Churches with gross receipts of $50,000 or less can file Form 990-N (e-Postcard)

• Form 990-EZ: Churches whose gross receipts are less than $200,000 and total assets less than $500,000 at the end of the taxable year can file Form 990-EZ
• Form 990: Churches whose gross receipts are equal to or higher than $200,000 and total assets equal to or greater than $500,000 at the end of the taxable year can file Form 990.

It’s important to note that any church with unrelated business gross taxable income of $1,000 or more in a tax year is required to file Form 990-T (Exempt Organizations Business Income Tax Return). 

Other Ways to Increase Donations

Now that you’re on your way with the Form 990, interested in a few other tips to help increase the amount your church receives in donations? Look no further!

• Go Digital: You don’t need us to tell you just how predominant electronic transactions are nowadays–and the last few years especially have shown us how important it is to be able to accept things other than cash. Adding an electronic payment option to your church service doesn’t have to be disruptive, either: members of your congregation simply need a phone, and you can direct them to an app that works best for you and your church.
• Go Auto: Giving your contributors a way to give to the church regularly is a great way to make things easier for both yourself and your congregation. A website with a “Recurring Payment” option or a presentation on how to set up automatic withdrawals from a bank account for your members can lead to a huge increase in donations!
• Go Big, Go Local: Partner with your local businesses! Maybe sponsor an event or local sports team. Fundraising lunches/dinners at local restaurants can also be a great way to bring the community together and highlight the importance of giving back. And when you partner with a local business, don’t forget to let your members know! They’ll love to support a business that supports you, and the business will be excited to partner with you again in the future.

Let Tax990 Simplify Form 990 E-Filing for Your Church Today!

Tax 990, the leading IRS-authorized e-file provider, removes all the hassle involved in preparing and filing your 990 form. File easily and with confidence thanks to features like:

• SOC-2 Certification: Tax990 is a SOC-2 Certified Provider, ensuring the complete protection of your organization’s sensitive information.
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• Bulk Upload Templates: Easily upload bulk contributions and grant details with custom Excel templates.
• Multi-User Access: Allow multiple staff members access to assist with form preparation and filing. 
• Live Customer Support: Our staff of experts is available to instantly resolve any issues via live chat, phone, and email.