Filing a tax return is stressful enough as is – the IRS Form 990 series is no different. With everything you’re responsible for reporting, the last thing you need is your form rejected because you filed for the wrong tax year.
We understand how difficult tax periods can be for exempt organizations, and we often get questions about the difference between the current tax year and the prior tax year. But we’re here to help make determining your correct tax year as easy as possible.
To start, there are two different tax periods or accounting periods:
- Calendar Tax Year – A consecutive 12-month period that begins in January and ends in December
- Fiscal Tax Year – A consecutive 12-month period that doesn’t start in January or ends in December
For nonprofits or charities that operate on a Calendar Tax Year, you can quickly figure out what year you’re filing for because both beginning and ending dates are within the same year. For example, your tax period starts on January 1, 2015, and ends on December 31, 2015. Simple enough, right?
Fiscal Year Filing
For other section 501(c)(3) organizations
that may operate on a Fiscal Tax Year, it can get a little confusing because your begin and end dates are in two different years. So let’s say your tax period starts on August 1, 2014, and ends July 31, 2015 – come tax time, what year are you filing?
If you’re thinking 2015, you’re unfortunately wrong. Even though your accounting period ended in 2015, it began in 2014, which was the start of the consecutive 12-month period. So you’re filing a 2014 tax return in 2015, which shouldn’t be too surprising – you would file a 2015 calendar tax year return in the middle of 2016.
Important: The year that you file will be the same year as your tax begin date.
That’s useful information – only if you already know your accounting period. But what if it’s your first time tasked with filing for your tax-exempt organization? You might not be familiar with the tax year period. Here are some ways you can find out:
- Prior Tax Return – When in doubt, take a look and see what your organization reported on its most recent tax return. You should locate the tax year period as well as a wealth of other information required by the 990 form for prior year amounts.
- Determination Letter – If you still have the letter the IRS sent confirming your exemption status, which you should, you can figure out your tax year. The letter contains your accounting period end date. So if the end date says May 31, count back 11 months and your begin date is June 1.
- EO Select Check – For those of you filing IRS Form 990-N (e-Postcard), you can use the exempt organization select check on the IRS website. Your organization needs to have filed an e-Postcard before. Search using your EIN# and click on the organization’s name – it shows each year recorded along with the information transmitted including the tax year period.
Don’t let an incorrect tax year ruin all the time and effort you put in submitting your 990 form – get an automatic 3-month extension with IRS Form 8868. After your tax extension is approved, e-file your return with ExpressTaxExempt – and if your form is ever rejected, you can correct the mistake and retransmit your form at no extra cost!
Call our friendly, live customer support for any questions or concerns about e-filing an extension. We’re available at (803) 514-5155, Monday through Friday from 9 a.m. to 6 p.m. EST. You can also reach us 24/7 through firstname.lastname@example.org.