When starting a charitable organization, you’ll find there are quite a few forms you need to file to make your organization legal. In addition, you’ll want to file for tax exemption with the IRS, if possible, to ensure your organization doesn’t have to pay federal income tax. Most charitable organizations do qualify for this exemption with the federal government. Specifically, your organization can file for 501c3 status, exempting it from federal income tax if its purpose is one of the following:
* Religious
* Charitable (such as an organization that supports the poor)
* Scientific
* Public Safety
* Literary
* Prevention of Cruelty
* Fostering Amateur Sports Competition
* Educational
In addition, your organization may want to know how to be exempt from taxes in your home state. It is very possible that your organization will also be exempt from state taxes. However, the requirements do vary from state to state. It’s a good idea to meet with an attorney specializing in non-profits in your state to get a good handle on whether or not you will also be exempt from state tax.
A non profit attorney can help you file all the paperwork needed with the secretary of state to make your organization legal, the IRS paperwork required to obtain your 501c3 status and the state paperwork that exempts you from state tax, if applicable. These attorneys work with numerous non-profit agencies, so they know the ins and outs of ensuring your organization has filed all necessary paperwork.
You’ll save time and money in the long run by working with an attorney that has helped other non-profit organizations file their legal paperwork, obtain their tax exempt status with the IRS and that knows how to be exempt from taxes in Minnesota or other states. Their advice is particularly invaluable when you are getting started.
