Definition: Form 990 is a tax form that is required to be filed by organizations that are exempt from income taxes (depending on the size of the organization and tax exempt status). The form is maintained and required annually by the Internal Revenue Service (IRS).
What Does Form 990 Mean?
What is the definition of Form 990? Simply speaking, the Form 990 is the required tax form filed by any organization that is exempt from income taxes within the United States. The form requires a certain amount of static information about the organization, as well as information about the activities, governance, revenues, and expenses associated with the organization. Not only does the form allow the IRS to document the necessary information associated with an organization that is tax exempt, but the form also acts as the official document available to the public for documenting the activities of a tax exempt organization.
Who files the Form 990? Any organization that is deemed to be exempt from paying income tax within the United States may be required to file the Form 990. Organizations such as non-profits, hospitals, certain political organizations, and certain religious organizations may be required to file the Form 990 depending on the size and status of the organization. Depending on the size, status, and type of organization filing the Form 990, a number of different attachments, or a different version of the Form 990 may be required.
Example
Let’s pretend a local family center in your community was opened, and the center relies on charitable contributions, as well as revenues from community educational programs, to fund the operations. Assuming the family center raised adequate funds during the first year (typically exceeding $200,000 per IRS rules), the family center would be required to file the Form 990 with the IRS, claiming tax exempt status as a 503(c)(3) corporation (this type of filing status is the most popular type given it applies to non-profit organizations who provide a public service such as the family center’s educational programs). Upon filing the Form 990, the financial information associated with the family center would become reviewable by the IRS, as well as anyone in the public who would like to review the financial information associated with the non-profit organization.
Summary Definition
Define Form 990: A tax form required to be filed annually with the Internal Revenue Service (IRS) for any entity claiming to be exempt from income taxes within the United States.
