Form 990 (2024) – Return of Organization Exempt From Income Tax
Purpose and Overview
Form 990 is the annual information return filed by tax-exempt organizations under sections 501(c), 527, or 4947(a)(1) of the Internal Revenue Code. For 2024, the form requires disclosure of financial activities, governance practices, section 4960 excise tax on compensation exceeding $1,000,000, and section 4968 net investment income tax for educational institutions. All Form 990 filers must complete the mandatory Schedule O, regardless of their exemption type.
Filing Requirements
Organizations exempt under section 501(c) with gross receipts above filing thresholds must file Form 990. This includes section 501(c)(3) charitable organizations, section 501(c)(4) social welfare organizations, section 501(c)(5) labor unions, section 501(c)(6) business leagues, section 501(c)(7) social clubs, section 501(c)(12) benevolent life insurance associations, section 501(c)(21) black lung trusts, section 501(c)(29) qualified nonprofit health insurance issuers, section 527 political organizations, and section 4947(a)(1) nonexempt charitable trusts.
Ten-Step Filing Checklist
Step 1: Verify Tax-Exempt Status and Gather Documents
Confirm the organization’s tax-exempt status category by reviewing the IRS determination letter. Verify the Employer Identification Number matches IRS records. Collect all financial statements and Forms 1099, W-2, W-3, and 1096 filed during the year. Gather documentation of grants provided and compensation records for officers, directors, trustees, key employees, and highest compensated employees. Compile information about tax-exempt bonds, foreign activities, political campaign activities, lobbying activities, and related organization transactions.
Step 2: Complete Header and Identification Information
Enter the tax year beginning and ending dates. Provide the organization’s legal name, Employer Identification Number, principal office address, telephone number, and principal officer’s name and address. Include the “doing business as” name if applicable. Check boxes for address change, name change, initial return, final return, amended return, or application pending status as appropriate.
Step 3: Complete Part I Summary
Report voting members of the governing body, independent members, employees, and volunteers. Enter total unrelated business revenue and net unrelated business taxable income. Report contributions and grants, program service revenue, investment income, and other revenue. Calculate total revenue.
Report grants paid, benefits paid to members, salaries and compensation, professional fundraising fees, and other expenses. Calculate the total expenses and then subtract them from the total revenue. Report the beginning and ending years' total assets, total liabilities, and net assets or fund balances.
Step 4: Complete Part III Program Service Accomplishments
Describe the organization’s mission concisely. Answer whether the organization undertook significant new program services or made significant changes to existing services. Describe the three largest program services by expense, providing the NTEE code, total expenses including grants, revenue if any, and a detailed narrative of activities and accomplishments. Report additional program services if applicable. Calculate total program service expenses.
Step 5: Answer Part IV Checklist of Required Schedules
Answer all 38 yes/no questions, determining which schedules must be attached. Questions address section 501(c)(3) status, political activities, lobbying, membership dues, donor-advised funds, conservation easements, art collections, custodial accounts, endowments, property and equipment, investments, financial statements, schools, foreign operations, grants, compensation, tax-exempt bonds, excess benefit transactions, loans, business relationships, noncash contributions, asset liquidation, related entities, and partnerships. Line 38 confirms Schedule O, which is mandatory for all filers.
Step 6: Complete Part V IRS Filings and Tax Compliance
Enter the number of Form 1096 filed and Form W-2G included. Confirm backup withholding compliance. Report the number of employees on Form W-3 and confirm federal employment tax returns were filed. Answer whether unrelated business gross income was $1,000 or more and confirm a Form 990-T filing.
Report foreign financial accounts, including the country name if applicable. Answer questions about prohibited tax shelter transactions, non-deductible contribution solicitations, quid pro quo contributions, Form 8282 dispositions, personal benefit contracts, intellectual property contributions, and vehicle donations. Complete questions specific to donor advised funds, section 501(c)(7) clubs, section 501(c)(12) organizations, section 4947(a)(1) trusts, and section 501(c)(29) health insurers, including reserve amounts.
Answer indoor tanning service questions. Confirm section 4960 excise tax applicability for remuneration exceeding $1,000,000 or excess parachute payments, requiring Form 4720 Schedule N. Answer section 4968 excise tax question for educational institutions, requiring Form 4720 Schedule O. Complete section 501(c)(21) trust questions.
Step 7: Complete Part VI Governance and Policies
Report voting and independent members of the governing body. Answer questions about family or business relationships, delegation of management duties, governing document changes, asset diversions, members or stockholders, and contemporaneous documentation of meetings. Answer whether any officer, director, trustee, or key employee cannot be reached at the organization’s mailing address.
Address local chapters and written policies. Confirm the governing body reviewed Form 990. Report the conflict of interest policy, including annual disclosure requirements and monitoring compliance. Report whistleblower and document retention policies. Describe the compensation determination process, including independent review, comparability data, and contemporaneous substantiation.
Report joint venture participation and written safeguard policies. List states requiring Form 990 filing. Indicate public availability methods for Forms 1023, 990, and 990-T. Describe the public availability of governing documents, conflict of interest policy, and financial statements. Provide contact information for the person possessing books and records.
Step 8: Complete Part VII Compensation
List all current and former officers, directors, trustees, key employees, and the five highest compensated employees earning more than $100,000. Report individuals in the required order: current officers, directors, and trustees; current key employees; the five current highest compensated employees; former officers, key employees, and highest compensated employees receiving more than $100,000; and former directors or trustees receiving more than $10,000 as a former director or trustee.
Provide name, title, average hours per week, including related organization hours, position checkboxes, reportable compensation from the organization, reportable compensation from related organizations, and other compensation. Calculate subtotal, continuation sheet total, and grand total. Report the number of individuals receiving more than $100,000. Answer whether Schedule J is required for former officials, individuals with total compensation exceeding $150,000, or individuals receiving compensation from unrelated organizations.
List the five highest compensated independent contractors receiving more than $100,000 with names, addresses, service descriptions, and compensation amounts.
Step 9: Complete Part VIII Revenue
Report all revenue sources. Column A shows total revenue, column B shows related or exempt function revenue, and column C shows unrelated business revenue. Report contributions and grants from federated campaigns, membership dues, fundraising events, related organizations, government grants, and all other sources, including noncash contributions. Report program service revenue for each significant service with business codes.
Report investment income, income from tax-exempt bond proceeds, and royalties. Report rental income showing gross rents, expenses, and net amounts. Report capital gains showing gross sales, cost basis, and net gain or loss. Report fundraising events showing gross income, direct expenses, and net amounts. Report gaming activities showing gross income, direct expenses, and net amounts. Report inventory sales showing gross sales, cost of goods sold, and net amounts. Report all other revenue and calculate total revenue.
Step 10: Complete Parts IX, X, XI, Schedule O, and File
Complete Part IX, allocating all expenses across program services, management and general, and fundraising columns. Report grants, benefits, compensation, employee benefits, payroll taxes, professional fees, advertising, office expenses, information technology, royalties, occupancy, travel, public official expenses, conferences, interest, affiliate payments, depreciation, insurance, and other expenses. Report joint costs if applicable, following ASC 958-720 standards.
Complete Part X Balance Sheet reporting beginning and ending year amounts for all assets, including cash, receivables, inventories, property and equipment, investments, and other assets. Report all liabilities, including payables, deferred revenue, bonds, loans, and other obligations. Report net assets without donor restrictions and with donor restrictions, or for non-ASC 958 organizations, report capital stock, paid-in surplus, and retained earnings. Verify that total assets equal total liabilities plus net assets.
Complete Part XI: Reconcile net assets by reporting total revenue, total expenses, revenue less expenses, beginning net assets, unrealized gains or losses, donated services, investment expenses, prior period adjustments, and other changes. Calculate the ending net assets and verify that they equal Part X's ending net assets.
Prepare a mandatory Schedule O, providing narrative explanations for Part VI lines 11b and 19, responses to Part IV questions, explanations for negative answers to Part V questions, and all other required supplemental information. Complete all schedules triggered by Part IV' yes' answers, including Schedules A through R as applicable.
Review the completed return for accuracy and completeness. Verify the balance sheet equation, reconciliation of net assets, mathematical calculations, and consistency between line items. The principal officer is required to sign the document under penalty of perjury. Paid preparers must provide PTIN, signature, and firm information. File electronically through IRS-approved software by the 15th day of the 5th month after tax year end. Request extension using Form 8868 if needed. Maintain documentation for at least three years and make it available for public inspection as required.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
