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4/28/2016

4 Simple Steps to Remain Tax Exempt




Most, if not all, exempt organizations know that a sure-fire way to lose exemption status is failing to file the required 990 form with the IRS each year. After failure to file for three consecutive years, your tax-exempt status is automatically revoked - no warnings, no questions asked.

Many hours of operating a tax-exempt organization get poured into reaching mission goals and accomplishing community objectives. Legal situations of compliance with federal or state laws are usually an afterthought until you find yourself caught up in litigation. A verified checklist dedicated to preserving your organization’s tax-exempt status can be helpful outside of staying up-to-date with the required IRS Form 990 filings.

Even though running a nonprofit or charity is challenging as is, here are four steps you can take towards securing your tax-exempt status:

Appraise executive members’ compensation and contracts on a yearly basis.
Payment cannot significantly exceed guidelines set by the industry. It's typically seen as a conflict regarding your organization’s mission when overpaying particular members, which can cost you your section 501(c)(3) status. Your business arrangements should not be overabundant, but approved in a formal manner and reasonable.

Stay current on any taxes you may need to pay towards unrelated business income.
This is money earned from any consistent service or activity that doesn't work towards the mission of your exempt organization. The goal is to keep any unrelated business income as small as possible; you can quickly lose exemption status if your organization’s priority shifts to separate activities. For more information, head over to our easy-read blog titled “Unrelated Business Income.”

Create either written or digital receipts of donations from contributors.

The law requires that a donor receives documentation from your exempt organization regarding any gift that is worth a minimum of $250. It’s also a good idea to have a record of the Fair Market Value of services and products your organization provides. Both federal and state governments require information such as donations, goods, and services for annual reporting. You can become more aware of state-specific filing requirements by visiting your state’s official website.

Learn the stipulations regarding lobbying activities.
Similar to unrelated business income, if there is an excess amount, your tax-exempt status is lost in an instant. There are strict limits and requirements from both the federal and state level about lobbying - including a secure, detailed account of such activities and their expenses. We have more information about lobbying in our blog, “Lobby Party.”

Not only is it important for you to file your tax-exempt returns to the IRS every year, but following these steps can also help support the information that you’re reporting. Don’t forget that filing on time is just as important - based on your organization’s tax year period, your tax deadline is the 15th day of the 5th month after the year end date.

If you need extra time to file, consider e-filing IRS Form 8868 to extend your deadline. You can have your tax extension for exempt organizations transmitted and approved in minutes with ExpressExtension. And once you’re ready to file the IRS Form 990, you can visit our affiliate site, ExpressTaxExempt, to e-file the same way you did the extension.

If you have any questions or need further assistance e-filing your extension, call our live support in Rock Hill, South Carolina. You can reach us at (803) 514-5155, Monday through Friday from 9 a.m. to 6 p.m. EST, or send us an email 24/7 with support@ExpressExtension.com.


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4/25/2016

List Gifts & Contributions with Ease

One of the most important aspects of exempt organizations is public support, which can come in the form of gifts, grants, contributions, or fundraising events. The amounts your nonprofit receives can vary widely, but one consistent fact is that contributions totaling $5,000 or more from any one contributor need reporting in your 990 (Long) or 990-EZ IRS filing.

With our affiliate site, ExpressTaxExempt.com, you can easily list all your contributors in one convenient section of your “Statement of Revenue.” All you need is the:
  • Name of Contributor
  • Address Details
  • Type of Contribution
Fairly simple, right? But you have so many contributions from people that you can’t possibly have the time to list them all one by one. No worries there, friend - ExpressTaxExempt also has this fantastic feature in which you can enter all of the contributions you’ve received at once. It’s called Bulk Upload, and you can use it in three easy steps:
  • Download the pre-made spreadsheet template
  • Enter, or copy and paste, your contributions in the template and save
  • Upload your saved spreadsheet from your computer into the program
You can find detailed instructions along with helpful screenshots from our other blog:
Gifts and Contributions

Important: The Bulk Upload feature is also used to list “Other Revenue,” “Other Expenses,” and “Lists of Officers.”

Currently, e-filing a 990/990-EZ form with a list of contributions requires that you have the name and address of individual contributors. For many CPAs who are filing on behalf of others, they may not have access to every person’s address - and many exempt organizations may not record that information at the time of each given contribution. In any case, it is still a requirement for electronic filing.

If you need more time to access contributor information, you can get three months of extra time by e-filing Form 8868 Part I with either ExpressExtension or ExpressTaxExempt. The process is super easy, and you can have your IRS extension form transmitted and approved within minutes. With our FREE downloadable Express 8868 app, you don’t even need to be on a computer - complete your e-filing on any iOS or Android device.

Assistance is only a click or a phone call away - call our e-filing experts for any questions or concerns about filing your tax extension. We’re available Monday through Friday from 9 a.m to 6 p.m. EST at (803) 514-5155, or email us at support@expressextension.com. For general comments about e-filing 990 forms, give our neighbors at ExpressTaxExempt a call at (704) 839-2321. They’re just as friendly and helpful as we are - same operating hours apply.


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4/20/2016

Warning: Is Your Tax Exempt Status AT RISK?

As we quickly move along through this year’s tax season, the next major IRS deadline is for exempt organizations, charities, and nonprofits. According to the IRS, those with tax-exempt organizations are required to report their gross receipts each year with the 990 series forms. While there are many federal forms about nonprofits and such, there a three main tax forms that follow in the 990 series:
  • Form 990-N (e-Postcard) - federal tax return for exempt organizations with gross receipts less than $50,000 (electronic file only)
  • Form 990-EZ (Short Form) - federal tax return for exempt organizations with gross receipts over $50,000, but less than $200,000, and with total assets less than $500,000 (electronic or paper file)
  • Form 990 (Long Form) - federal tax return for exempt organizations with gross receipts greater than $200,000, and total assets greater than $500,000 (electronic or paper file)
When to File:
Typically, exempt organizations have to file by the 15th day of the 5th month after the end of their tax period. For those operating on a Calendar Tax Year, the deadline is May 15, or rather May 16, 2016, because the former is on a Sunday. If you operate on a Fiscal Tax Year, your deadline will vary based on your tax year end date.

For more about tax year dates for exempt organizations, check out the following blogs:
What Is A Fiscal Year
Find Your Tax Year Dates
What is an Accounting Period

Extension Form 8868
If your organization isn’t able to make the filing deadline, there is IRS Form 8868, which can extend your due date. Unlike other tax extension forms, this one is broken down into two different types:
  • Part I - Automatic 3-Month Extension
  • Part II - Additional, Non-Automatic 3-Month Extension
Important: To file Part II, you need to have submitted and been approved for Part I; you also need to provide a reason as to why you need the additional time. The Extension Form 8868 can extend time to file the 990/990-EZ, 990-PF, or 990-T - it is not applicable to the e-Postcard.

E-filing your exempt organization tax extension with ExpressExtension is as simple as 1-2-3 - all you need to do is enter your organization details, choose your tax year period, select which tax exempt form you typically file, choose the extension type you need (Part I or II), then authorize and transmit to the IRS.

You can also e-file the same extension form through our affiliate site, ExpressTaxExempt.com - the #1 online, e-filing solution for exempt organizations. Afterward, you can use the site to also e-file your 990/990-EZ - that way, your extension and tax form are conveniently stored within one account.

For any questions or assistance needed with your tax extension, call our live, US-based e-filing experts; there’s no phone tree or dial menus to shuffle through - just pick up, call, and speak to a real person. We’re available at (803) 514-5155, Monday through Friday, from 9 a.m. to 6 p.m. EST. We also support 24/7 email with support@expressextension.com.



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4/18/2016

E-file On Time - Personal Tax Deadline Today!!!




Today is the day! And if you haven’t filed your personal tax return with the IRS yet, you have until Midnight local time to get your information sent. 

If you already know that you can’t make today’s deadline, you can still avoid IRS penalties by e-filing Form 4868, Personal Tax Extension, with ExpressExtension and receive six extra months to get your Form 1040 completed and sent to the IRS.

Our services make tax extensions as simple as possible, and you can be done and approved in a matter of minutes. Start off by creating your FREE account at our website - afterwards; you can properly e-file your extension with these steps:
  • Click “Create Personal Tax Extension”
  • Enter the required information for single or joint filing
  • Select if there is any estimated tax liability and enter the amount you owe
  • Choose your method of IRS payment if necessary
  • Authorize and transmit to the IRS
It’s that simple - and you don’t necessarily need to be near a computer. You can download our FREE Express 4868 App for iOS or Android devices, and follow the same steps to e-file your extension anywhere you are.
For more information about e-filing Form 4868, or personal tax filings in general, check out our other blogs loaded with valuable filing tips and facts:
Don’t let today’s IRS deadline keep you from filing a return, and receiving a refund. Our live e-filing professionals can help you get your extension so you can have extra time to file. Give us a call at (803) 514-5155 - Monday through Friday from 9 a.m. to 6 p.m. EST. Or give us a shout through support@expressextension.com - our 24/7 email service.


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4/13/2016

Recover from Missed IRS Tax Deadline




There are number of things in this world that can cause our hearts to jump out of our throats - flashing police lights, a somber appearance from a doctor, or missing a tax deadline. That last one can cause such a panic because all you can think about are penalties, fees, garnished wages - it’s enough to make life a nightmare. But before you start beating yourself down with terror, let’s clear up a few things.

First, the IRS doesn’t assign late fees to taxpayers who normally receive a tax refund - they care about the money you own them, not the other way around… unfortunately. And you’ll also have until 2018 to claim any backed tax refunds from this current tax year.

Second, if you do happen to owe the IRS this year, and you missed the deadline, your best option is to remain calm, and simply file your IRS Form 1040 as soon as possible. Don’t even worry about if you can’t pay the tax owed when you file - the IRS can work with you on that. But you’ll get hit with a heavier penalty if they don’t receive your tax return at all.

Late Filing Penalties

  • The failing-to-file penalty is 5% of the taxes owed for every month, or part of month, your return is late - up to a maximum of 25%
  • The failing-to-pay penalty is 0.5% of the taxes owed for every month, or part of month, those taxes remain unpaid - also up to a maximum of 25%
Important: A penalty is applied if you do not file either your tax return, or a tax extension, by the April 18 tax deadline. A penalty is also applied if file your return on time, but didn’t pay any owed taxes by the April 18 deadline. With a tax extension, you can only extend your time to file - not time to pay.

Not Filing At All
Other than the obvious penalties, if you’re a wage earner who doesn’t file, you will receive some sort of letter from the IRS as a reminder - especially if you received a W-2 or 1099 because your employer already filed a copy to the IRS.

Unique Circumstances

For you U.S. citizens or resident foreigners who are out of the country during tax season, you’re granted an automatic 2-month extension to file and pay without any penalties. Check out our informative blog for more - Globetrotting Taxes | June 15 Deadline for Americans Living Abroad

Missing a tax deadline can be a little terrifying, but if you know you’re pushing it to last minute, why not e-file IRS Form 4868 to get a 6-month personal tax extension? Even if it’s 11:50 p.m. on the night of the deadline, you can still e-file with ExpressExtension and get approved - 10 minutes is all you need.

For any questions or assistance with e-filing a personal tax extension, don’t hesitate to give our live, US-based, e-filing professionals a call at (803) 514-5155, Monday through Friday from 9 a.m. to 6 p.m. EST. We’re also available through 24/7 email with support@expressextension.com.


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4/11/2016

Avoid Personal Tax Filing Mistakes




It’s no big secret that most people dread having to file their taxes. The feeling is even worse for you all who are filing for the very first time - fear of making a mistake that will have the IRS all up in your personal finances, and heavy penalty fees.

While in some cases, a mistake on a tax return may lead to an audit, the most troubled beginners would have to worry about a letter from the IRS stating the error to fix, or a delayed return - which is still a pretty big deal because it’s your money.

“Knowing is half the battle,” and if you’re aware of the most common filing mistakes, you’ll know how to avoid them, and best of all, get your tax refund as quickly as possible. Here are the top filing mistakes made by beginners.

1. Filing a Paper Return
You’ve done your research - you know you can get a filing form at IRS.gov, or your local library. You know where all the tax preparing kiosks are throughout your town. But consider electronic filing (e-filing) as your main choice. For adjusted gross incomes under $62,000, you can e-file for free through the IRS, or use other tax prep software. With direct deposit, e-filing is the quickest way to get your tax refund.

2. Claiming an Exemption
Exemptions can lower your taxable income - a little Tax 101. And you claim one for yourself and any dependents you may have; however, if you are a dependent yourself - meaning your parents still claim you on their taxes - you’re heading into a tax nightmare. Your folks could lose a dependent exemption along with any education tax credits if you happen to be in college.

3. Using an Incorrect Social Security Number
Be sure to double check social security numbers for yourself and any dependents you’re claiming. An incorrect SSN# can delay the processing of your tax return, and in some cases, even reject exemptions for dependents.

4. Not Including all Sources of Income
Often, first-time filers don’t include every source of income - especially if it’s independent contract work. They tend to round numbers in an attempt have clean figures, and to speed up the filing process. However, with contract work, a 1099 is sent to the recipient, and the IRS. It’s a simple matter for the IRS to realize that a filer’s amounts don’t match what the employer reported.

5. Filing with the Wrong Status
According to the IRS, many people file their taxes using the wrong status - meaning they file as “head of household” rather than “single.” You definitely want to file with your correct status because it determines your taxes owed, claimed deductions, and qualified tax breaks. E-filing can help select the right status.

6. Filing at the Last Minute
The #1 cause of filing errors is mostly likely due to waiting until the last minute to file - you’re rushing, not double-checking, and doing whatever it takes just to make the deadline. If you file late, you could be facing up to 25% of your unpaid tax in penalties.

7. Refusing Low Taxable Income
You might not even be aware that you’re turning away low taxable income - that is, income that is taxed. The lower the taxable income, the less you’re paying to the IRS - a little Tax 102. The main way to lower taxable income is through itemized deductions. Even if you use the standard deduction option, there are still plenty other deductions you can claim only through itemizing.

8. Calculating the Wrong Math
For those of us who can say math isn’t particularly our strong point, incorrect calculations here could lead to paying less than what you owe, which in turn, will force the IRS to bill you the rest with interest. Again, e-filing is your friend - it’ll automatically do the math for you.

9. Neglecting to Sign Form
The biggest facepalm of all time possibly - no matter how perfect or accurate your tax form is, it means absolutely nothing if your signature isn’t on it. If you have a spouse, both of your signatures are required. With e-filing, you’re prompted to enter a personal identification number (PIN) that the IRS assigns you for easy e-signing.

10. Refusing Tax Credits
Even better than tax deductions are tax credits because they reduce your tax liability - such credits include the Child Tax Credit, Earned Income Tax Credit, and Retirement Saving Contributions. E-filing can help decide which credits you qualify for.

11. Expecting a Huge Refund
You might be wondering, “How is this a mistake? The point is to maximize your refund, right?” Well, yes and no - you do want to get back your maximum amount, but getting an enormous refund also means that the IRS took too much money from you throughout the year. Check back on the withholdings you claim on your W-4 with your employer - you may need to file a new one to have less tax withheld, and claim more allowances.

12. Forgetting to File
Nevermind forgetting to sign, this has to be the biggest facepalm of all - just flat-out forgetting to file. The IRS reports $1 billion in unclaimed refunds every year - usually from people who forget to file, and those who think they make too little to file. No matter what, if taxes are taken from any compensation you’ve received, you need to file. And for us chronic “forgetters,” we’ll remember after paying fees for each month we’re late.

To be a tax refund baller, you obviously need to have your information all together. For more time figuring out all your sources of income, eligible credits, or tax deductions, don’t sweat - e-file Form 4868 with ExpressExtension to instantly receive an extra six months to file your 1040. You don’t even need to be near a computer - download our FREE Express 4868 App for iOS and Android devices, and have your extension approved in minutes.

Our live, e-filing professionals in Rock Hill, South Carolina are available for any comments or questions you might have. Give us a call at (803) 514-5155, Monday through Friday from 9 a.m. to 6 p.m. EST, or email us at support@expressextension.com. Let us know any memorable moments you’ve had filing for the first time in the comments below.


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4/06/2016

Tax Changes for 2016


For most of us taxpayers, tax season is stressful enough as is, but this year is bringing along some significant changes for personal tax filers. Have no fear though - by becoming familiar with these changes, which are not as huge or contrasting as you might think, you can make better choices regarding your tax situation this year. Here are 10 tax changes the IRS has set this season:

#1 - Filing deadline is April 18
The most notable change is the tax deadline. Normally, the due date is April 15 every year unless that day is a holiday or falls on the weekend, in which case the deadline becomes the following business day. This time around, April 15 is a Friday, which also happens to be the Washington D.C. holiday, Emancipation Day. So the due date moves to the following Monday, April 18.

For those states that will also observe Patriots’ Day on April 18 - Massachusetts, Maine, and Wisconsin - the tax deadline will be extended again to April 19.

#2 - Health care penalties on the rise
If you still don’t have any qualifying health care coverage, you may get hit with a $695 penalty per adult, or 2.5% of your income - that’s a $410 and a 0.5% increase from last year. This year’s $2,085 family maximum is more than double from last year’s $975.

#3 - Tax brackets going up
Not that much - but tax bracket amounts are adjusted for inflation, and this year will show roughly a 0.4% increase.

#4 - Higher deductions for head-of-household filers
Though low inflation rates have kept standard deductions steady for most taxpayers, those that qualify as heads of households will see a $50 raise in standard deductions to $9,300 in 2016.

#5 - Rise on personal exemptions
Personal exemptions that taxpayers can take on their tax returns will increase by $50 - this means a total exemption amount of $4,050 for 2016.

#6 - Increase in contribution limits
Contribution limits for health savings accounts will remain at $3,350 for individual policies; however, a rise of $100 to $6,750 will be the maximum contribution for family policies.

#7 - Boost in the Earned Income Credit
The maximum amount for the Earned Income Credit will have a small increase this tax season - the maximum credit will rise $27 for those with three or four qualifying children, $24 for two children, $14 for one-child families, and a small $3 for those without children.

#8 - Higher exemption amounts from Alternative Minimum Tax (AMT)

Exemptions are going up by $300 this year for single taxpayers for a total of $53,900, and $500 for joint filers, which totals to $83,800.

#9 - Surge in estate tax exemption

Up from $20,000 in 2015, the lifetime exemption amount for the gift and estate tax will rise to $5.45 million - this limit is applied to estates of those who have passed away in 2016.

#10 - Change for other tax provisions if no renewal

Typically, the renewal of popular tax breaks are done at the last minute of the previous year. Often, these tax breaks are retroactively renewed after the start of the new year; however, if a provision is vetoed at the last minute, others could be changed or re-imagined as a result.

Everyone’s tax situation is different, so be sure to check with your local CPA or tax professional to successfully choose the best tax options to file on your return. And if you need more time to file, consider e-filing IRS Form 4868, Personal Tax Extension, with ExpressExtension. In minutes, you can receive an automatic 6-month extension for either single or joint tax filings.

Our goal is to make your e-filing experience as pleasant and easy as possible; assistance with the e-filing process is just a phone call away. Contact our live, US-based support professionals for any questions or concerns. We’re available Monday through Friday at (803) 514-5155 from 9 a.m. to 6 p.m. EST - or drop us a message 24/7 at support@expressextension.com



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4/04/2016

Tax Tips for the Self-Employed




Typically, when you conduct a trade or business, you’re considered to be self-employed. There are two types of self-employment:
If either one applies to you, the IRS has some essential guidelines you should know about on how your self-employment income can affect your federal tax return.

Self-Employed Income - Even if you only do your self-employed work part time, you still need to report the income in addition to the money you receive from your full-time or regular employment.

Schedule C or C-EZ - With self-employment, you are required to file either a Schedule C, Profit or Loss from Business, or a Schedule C-EZ, Net Profit from Business, along with your Form 1040. If you had expenses totaling less than $5,000 and meet other qualifications, you may be eligible to file a Schedule C-EZ - check the form instructions for more details.

Self-Employment Tax - Social Security and Medicare taxes are included in self-employment tax, and you may have to pay these taxes if you made a profit. The IRS has the Schedule SE, Self-Employment Tax, in which you can use to calculate the tax. If there’s an amount you owe, file the Schedule SE along with your federal tax return.

Estimated Tax - Along with self-employment, you may have to pay estimated taxes; these are typically payments on non-withholding income. The IRS states that estimated taxes can be paid in four annual installments. And you may already owe a penalty if you haven’t paid enough tax throughout the year.

There are a number of ways you can pay estimated taxes - check out our helpful blog for more information.
3 Ways To Pay Your Estimated Tax

Acceptable Deductions - You can deduct both ordinary and necessary expenses that were paid to operate your business. The IRS lists necessary expenses as those that are “helpful and proper for your trade or business,” while ordinary expenses are “common and acceptable in your industry.”

Proper Time for Deductions - Normally, expenses can be deducted in the same year they were paid or incurred. But some costs may have to be “capitalized,” which means you can deduct the costs within a number of years. The IRS has its Small Business and Self-Employed Tax Center webpage available for more information about tax compliance.

And if you need more time to get all your small business or self-employment tax information together, you can file a business or personal tax extension in minutes with ExpressExtension. We also offer FREE downloadable apps for iOS/Android devices in which you can e-file your Form 7004 or Form 4868 at anytime and anywhere you may be.

For any assistance or questions about e-filing our tax extensions, give our US-based, live e-filing professionals a call at (803) 514-5155, Monday through Friday from 9 a.m. to 6 p.m. EST - or email us at support@expressextension.com.



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