CPA Services for Non-Profits

A CPA provides a range of essential services to non-profit organizations, including:

• Bookkeeping and Financial Reporting: Ensuring accurate and timely financial records.
• Tax Compliance and Preparation: Preparing and filing federal, state, and local tax forms, including Form 990.
• Audit Support: Preparing for audits and liaising with auditors.
• Grant Management: Tracking and reporting on grant funds.
• Internal Control System Design: Setting up robust internal control systems.
• Financial Consulting: Advising on financial strategy and planning.
• Employee Benefit and Retirement Plan Consulting: Providing guidance on employee benefits and retirement plans.

Form 990 is crucial for non-profits because:

• Compliance: It ensures compliance with IRS regulations.
• Transparency: It provides transparency to donors and stakeholders about the organization’s financial health and activities.
• Public Record: It is available to the public, affecting the organization’s reputation and trustworthiness.

A CPA helps maintain tax-exempt status by:

• Compliance Monitoring: Regularly reviewing activities and finances to ensure compliance with IRS rules.
• Tax Planning: Advising on activities that may affect tax-exempt status.
• Filing Required Forms: Preparing and filing necessary forms, such as Form 1023 or Form 990.

In Pennsylvania, non-profits must:

• Register with the Pennsylvania Bureau of Charitable Organizations: This is required to legally solicit donations within the state.
• File Annual Reports: Maintain good standing with the Bureau by filing annual reports and renewals.
• Apply for Sales Tax Exemption: Obtain and maintain exemption from state sales tax for eligible purchases.

A CPA can assist with grant management by:

• Tracking Grant Funds: Ensuring funds are used according to grant terms.
• Reporting: Preparing required financial reports for grantors.
• Compliance: Ensuring compliance with grant conditions and regulations.

When choosing a CPA, non-profits should look for:

• Experience with Non-Profits: Expertise in non-profit accounting and tax issues.
• Understanding of State Regulations: Knowledge of Pennsylvania-specific requirements.
• Transparency: Clear and fair pricing.
• Supportive Approach: Willingness to work closely with the organization to understand its unique needs.
• Reputation: Positive testimonials and a track record of helping non-profits succeed.

A CPA assists with audit preparation by:

• Organizing Financial Records: Ensuring all financial documents are in order.
• Internal Control Review: Reviewing and strengthening internal controls.
• Liaison with Auditors: Acting as the main point of contact with auditors to facilitate the audit process.

UBIT is tax on income from activities not related to the non-profit’s primary purpose. A CPA helps by:

• Identifying UBIT Activities: Determining which activities are subject to UBIT.
• Compliance: Ensuring proper reporting and payment of UBIT.
• Advising on Minimization: Offering strategies to minimize UBIT liabilities.

Non-profits should consult with their CPA:

• Regularly: For ongoing bookkeeping, financial reporting, and compliance.
• Annually: For tax preparation and filing.
• As Needed: For audit preparation, grant management, and any significant financial decisions.

Federal Tax Services

1. Form 990 Series Preparation
   • Form 990: Annual information return for organizations exempt from income tax.
   • Form 990-EZ: A shorter version of Form 990 for smaller organizations.
   • Form 990-N (e-Postcard): For small tax-exempt organizations with gross receipts normally $50,000 or less.
   • Form 990-PF: For private foundations.
   • Form 990-T: For reporting unrelated business income and paying any taxes due on that income.
2. Application for Tax-Exempt Status
   • Form 1023: Application for Recognition of Exemption Under Section 501(c)(3) of the Internal Revenue Code.
   • Form 1023-EZ: Streamlined application for small organizations.
   • Form 1024: Application for Recognition of Exemption Under Section 501(a) for other types of non-profits.
3. Unrelated Business Income Tax (UBIT) Compliance
   • Consulting and filing requirements for income from activities not directly related to the organization’s exempt purpose.
4. Federal Tax Consulting
   • Guidance on maintaining tax-exempt status and compliance with IRS regulations.

State Tax Services

1. Pennsylvania Bureau of Charitable Organizations Registration
   • Assistance with initial registration and annual renewal to solicit donations legally within the state.
2. State Sales Tax Exemption
   • Applying for and maintaining sales tax exemption status for eligible purchases.
3. Pennsylvania BIRT (Business Income and Receipts Tax)
   • Compliance for non-profits that engage in business activities subject to state taxation.
4. State Corporate Tax Filings
   • Preparing and filing state corporate tax returns as required.

Local Tax Services

1. Local Property Tax Exemptions
   • Applying for property tax exemption for properties used exclusively for charitable purposes.
2. Local Business Privilege Taxes
   • Compliance with local business privilege taxes where applicable.

General Consulting and Compliance

1. Tax Planning and Strategy
   • Developing strategies to minimize tax liabilities and optimize financial resources.
2. Audit Preparation
   • Preparing for and assisting with federal, state, and local tax audits.
3. Employee Benefits and Retirement Plans
   • Consulting on tax-advantaged employee benefit and retirement plans.
4. Ongoing Compliance Monitoring
   • Regular reviews to ensure continued compliance with all applicable tax regulations.

By ensuring compliance with federal, state, and local tax regulations, non-profit organizations in Pennsylvania can maintain their tax-exempt status and focus on their mission.