A non-profit organization (NPO) is an organization motivated by something other than profit, usually a particular social cause or ideological advocacy. Unlike most business entities, non-profit organizations use revenue to achieve their purposes or missions, rather than distributing surplus income to shareholders.
In terms of finance and legal matters, non-profit organizations are organized differently from state to state; the organization can file articles of incorporation with the state in which it inhabits or decides will be its jurisdiction, if it wants to receive special tax benefits.
There are many advantages to organizing a non-profit. Because the organization isn’t working for surplus income, an incorporated non-profit organization is tax exempt, but enjoys characteristics similar to a corporation, minus the shareholders.
However, non-profits can also choose not to incorporate, in which case they are not given federal tax exempt status and therefore must report income, losses, deductions, and so on.
Moreover, unincorporated non-profits forfeit opportunities to apply for public or private grant money, solicit tax-deductible donations, property tax exemptions, and more.
It’s wise to incorporate all non-profit organizations to secure these relevant benefits.
All incorporated non-profits must obtain what is called as an Employer Identification Number (EIN), also called a Federal Tax ID number.
The Internal Revenue Service (IRS) issues EINs to distinguish various types of business entities; in the case of non-profits, federal Tax ID numbers are used when filing for tax exemption, and for all state and federal reports.
An EIN/Tax ID is a nine-digit number specific to your non-profit, and it will stay with the organization in perpetuity.
Don’t wait to obtain this important Federal Tax ID number and non-profit organization essential.
Our online forms are quick to read and easy to navigate, and we work hard to get your non-profits’ Tax ID number to you quickly and professionally.
If you’re operating a non-profit organization, please apply for a federal Tax ID number today.