How to Keep Your 990-N Filing Stress-Free Every Year

If hearing the words “taxes” and “IRS” makes your heart race and your palms sweat, you’re not alone. While filing Form 990-N each year is critical for small nonprofits, tax time is often a stressful scramble for volunteer treasurers – especially those new to the role.  

The good news is that Form 990-N is the simplest IRS filing for eligible tax-exempt organizations, and completing the process is relatively straightforward. The key is knowing what to expect and adopting a few simple best practices throughout the year.

In this guide, we’ll explore what Form 990-N is, why it matters, and the practical steps your nonprofit organization can take now to ensure tax time isn’t a last-minute scramble.

IRS Form 990-N: a quick refresher

Not every volunteer is an expert on nonprofit finances and taxes. So before diving into best practices, let’s take a quick look at what Form 990-N is and why it matters. 

What is Form 990-N?

Form 990-N, which is also called the e-Postcard, is an informational filing that certain small, tax-exempt organizations are required to submit to the IRS each year. Filing a 990-N doesn’t mean your organization owes federal income taxes. Instead, it simply gives the IRS the information it needs to confirm your nonprofit is active and operating in a way that aligns with its tax-exempt purpose.

Form 990-N is the simplest version in the Form 990 series and doesn’t require detailed financial reports. It only asks for basic information such as your organization’s legal name, Employer Identification Number, mailing address, and confirmation that you meet the financial eligibility requirements for filing Form 990-N (more on that next). 

Who qualifies to file Form 990-N?

Typically, a small tax-exempt organization qualifies to file Form 990-N if it normally has $50,000 or less in annual gross receipts. That often includes small, volunteer-run nonprofits like PTOs, PTAs, and booster clubs. 

However, there are some exceptions to this rule. Certain organizations, including private foundations and nonprofit political organizations, aren’t eligible to file Form 990-N, even if they have $50,000 or less in annual gross receipts. 

If you’d like to take a deeper dive into 990-N eligibility requirements, check out this recent blog. 

Why is the e-Postcard important? 

Filing Form 990-N is critical to protecting your organization’s tax-exempt status and staying in good standing with the IRS. If an organization fails to file for three consecutive years, the IRS will automatically revoke its tax-exempt status. Getting it back is tedious and time consuming, and in the meantime, it can be harder to effectively fundraise. 

Annual tax filing is also an important way to build trust with donors and the community. 990-N filings are public record, and many donors research before giving. Being able to find your filings shows potential donors that your organization is active, compliant, and responsible so they can feel confident making a contribution. 

Now that we’ve explored what Form 990-N is and why it matters, let’s dive into the practical steps you can start taking right away to make tax filing time stress-free every year. 

Best practice #1: Keep consistent financial records year-round

Only tax-exempt organizations that normally have $50,000 or less in annual gross receipts are eligible to file Form 990-N. Accurate recordkeeping is key to determining whether this applies to you. 

All too often, volunteer-run organizations wait until the end of the fiscal year to calculate total income. But compiling a year’s worth of receipts, event totals, and donation records can feel overwhelming. 

Instead, make it a priority to keep consistent financial records throughout the year. Keep a running total of revenue from events, membership dues, donations, and other activities. Also, track expenses so you always have a clear picture of your organization’s financial position.

Spreadsheets are one option. But they can be hard to maintain and may be lost or forgotten when there are leadership changes. As an alternative, consider a nonprofit accounting solution like MoneyMinder, which centralizes accounting information and ensures continuity even as leadership changes. 

The bottom line is that when you stay organized throughout the year, tax time is a quick confirmation exercise, not a stressful reconstruction project. 

Best practice #2: Don’t make assumptions 

Your organization may have filed Form 990-N last year. But don’t assume that means you’re automatically eligible again this year. 

A particularly successful event or large donation can push you above the $50,000 gross receipts threshold. If that happens, your organization must file a different version of Form 990. 

Avoid last minute surprises by consistently monitoring your gross receipts. That way, you’ll know when you’re approaching the $50,000 threshold and can plan accordingly. 

Best practices #3: Know your filing deadline

When you think of tax filing deadlines, April 15 may be the date that springs to mind. But Form 990-N doesn’t have a universal deadline. 

Eligible nonprofits must file Form 990 by the 15th day of the fifth month after their fiscal year ends. So if your fiscal year ends on December 31, your filing deadline is May 15. If your due date falls on a weekend or legal holiday, it’s pushed to the next business day. 

Take a few minutes today to figure out your organization’s tax filing deadline, and add it to your board calendar. It’s a simple (but effective) way to avoid last-minute scrambling.

Best practice #4: Designate a point person

In volunteer-led organizations, leadership changes often. That means the person who handled your tax filing last year may no longer be actively involved with the organization, and important information can get lost during a transition.

At the start of each year, designate an individual who will be responsible for filing your organization’s 990-N. Make sure this person has access to everything they need for accurate, timely filing, including:

• Necessary financial data
• Your organization’s employer identification number (EIN)
• IRS log-in credentials
• Confirmed filing deadline

It’s best practice to document this information in a shared board file or transition checklist. That way, it’s ready to pass along to future leaders. 

Clear ownership eliminates the common assumption that “someone else is handling it.” With the right information in the right hands, your organization can stay compliant year after year without unnecessary stress. 

Best practice #5: Partner with an e-filing provider

Staying organized throughout the year is key to stress-free filing. But even the most organized groups can feel anxious when it comes time to actually log into the IRS website and file Form 990-N. This is especially true for first-time filers or tax-exempt organizations navigating a change in leadership. 

One way to eliminate that game-time stress is to partner with an IRS-authorized e-file provider like 501c3 Center. Instead of trying to figure out IRS instructions and second-guessing your submission, you can follow a simple process developed specifically for small, volunteer-led nonprofits. Just answer a few quick questions, and your 990-N will be prepared and filed accurately and on time. 

For busy nonprofit treasurers, using an IRS-authorized e-file provider means less stress, fewer surprises, and greater confidence that your organization will stay compliant and in good standing.

Filing your 990-N doesn’t have to be stressful scramble 

Running a small nonprofit comes with countless responsibilities for busy volunteers. Fortunately, filing Form 990-N doesn’t have to be another source of anxiety.

By staying organized throughout the year, confirming your eligibility, assigning responsibility early on, and knowing where to turn for support, your annual filing can be simple and stress-free. That way, you can stay focused on your mission. 

501c3 Center makes filing your group’s 990-N a breeze. Learn more and file today.