501c3 tax exempt

How to get 501c3 tax exemption for your organization?

All the nonprofit status comes under 501c3 tax exemption irrespective to the size of the organization. One should apply for the tax exemption status within the twenty seven months from its inception. The name 501c3 comes to this status since it is mentioned under this clause in the Internal Revenue Service. This section mentions all the requirements that come under education, health, welfare, charitable, religious and community services. All those organizations that work without expecting any profit for the betterment of the society they should get registered themselves to avoid taxes, as they do not earn this money, instead the money or the resources are raised through donors who donate willingly the amount for the noble cause. These are some of the important procedures you need to follow in order to get the tax exemption.


You need to organize your entity. To get approval for the nonprofit status, it is necessary to fill the 501c3 form. The rules are stipulated by the Internal Revenue Service extensively. To get exemption from the federal income tax one has to fulfill the details of their nonprofit organization. For a corporation, all the details of the shareholders should be provided where the corporation is considered as a separate taxpaying entity. The corporation by and large performs business activity and irrespective of the profit and loss, if there is profit then it will pass the profit to all its shareholders.


For a limited liability company (known as LLC) there should be specific mention about the owner of the company. Whether it is a sole proprietorship, or a partnership company or a corporation, all the details should be mentioned clearly.


There is also another type of association known as an incorporated association. It is grouped that does not come under the state law, in other words, it is incorporated under the law of the state. It should have a minimum of two members and should be registered under the state law. A trust has got a different set of rules and regulation to get the tax exemption.


Provide all the details as mentioned under the purpose clause and dissolution clause. These are considered as the most vital source of information in case something goes wrong these details help the authorities to decide over legal issues. All the details are mentioned in the publication known as 557. To get clear picture one may consult a certified public accountant or a certified attorney for any specific.


Define and mention the charity status of your organization so that it will be clear from your documents which indicate how you are eligible for the tax exemption. There should be a clear indication whether you belong to a private foundation, public charity, or yours is a private operating foundation. Provide all the information related your employer identification number (EIN). Fill out internal revenue service information in the form 1023. It is an application for recognition of exemption under the section 501 c3 tax exemptions in the internal revenue application form 1023. After fulfilling all these procedures you will become eligible to get the tax exemption certificate.


Author Bio: The writer is an expert in the field of 501c3 tax exempt with focus on CharityNet USA.