Nonprofit income tax preparation in Houston is made easy
At Green Tree Tax nonprofit income tax preparation is simple. We are experts in providing corporate tax preparation as well as LLC tax preparation services in Houston. So, don’t hesitate to contact us regarding all your tax questions.
How to start a Non-profit organization?
First, a non-profit organization is those organizations whose sole purpose of formation is not to make a profit. These organizations are the opposite of regular corporations. As a result, they’re more concerns to benefit the public. So, they use their income to achieve this purpose.
Despite, that their purpose is not to make a profit doesn’t mean that they do not generate profits. If your organization is engaged primarily in educational, scientific, religious or charity, you probably want to form a nonprofit corporation to enjoy liability protection and tax benefits that this entity provided. Contact Green Tree Tax if you need to file a Non-profit income tax in Houston.
How to start a non-profit organization
First, registering your company as a non-profit organization will establish legal protections. So this will keep you and your director’s personal assets separate from the corporation’s liabilities. Therefore, there are many advantages to forming a non-profit organization.
For example, non-profit companies enjoy the following 3 benefits:
- Firstly, the directors and officers are not personally liable for the debts and losses of the organization.
- Secondly, the company continues even if the director dies or leaves the company.
- Thirdly, Non-profit organizations are eligible for public and private donations.
Also, non-profit organizations govern differently from the state by state. However, their formation processes are very similar. Just like regular corporations, nonprofit organizations must file articles of incorporation with the state in which they operate.
Complete your nonprofit income tax preparation in Houston
The IRS requires that non-profit organizations seeking tax-exempt status file Form 1023. In addition, states also require non-profit organizations wishing to operate in their states to apply for tax-exempt.
The non-profit status usually sought after obtaining the IRS 501(c) tax-exempt status. Organizations eligible for 501(c) enjoy the following benefits in addition to corporate protection:
- Tax-free status: Eligible non-profit organizations may apply for the federal and state tax-exempt status.
- Credibility: Potential donors are inclined to donate to a corporation that has the official nonprofit status.
- Finally, tax-deductible donations. Without a doubt, donations made by individuals to nonprofit corporations may be tax-deductible.
How to incorporate a nonprofit company in Texas.
First and foremost, check if the legal name of your nonprofit company is in conflict with other companies in the state.
Second, appoint incorporators and directors. So you need to recruit officers, and directors, as well as registered agents. Importantly, their duty is to execute the certification of formation and file it with the state. Texas requires you to have at least one registered agent at all times.
Third, submit a Texas nonprofit certificate of formation. In order to create a nonprofit corporation, you have to file a certificate of formation. In order,r to obtain this form visit the Secretary of the State of Texas.
Fourth, stay organized in your record keeping. Namely, you need to generate bylaws, meeting minutes and other official records.
Fifth, arrange a meeting of the directors and officers. Understandably hold your first meeting of directors. On such a meeting, approve the bylaws, elect additional officers, approve of the opening of bank account and any necessary request to adopt.
Finally, apply for federal employer identification number (EIN). The corporation must obtain the EIN from the IRS to hire employees.
Don’t forget if you need help on how to start a business in Houston, contact us at Green Tree Tax.
Apply for Texas state tax identification number.
Apply for 501(c): Applying for 501(c) is the most complex and time-consuming process is incorporating a nonprofit. It is also the most important because tax exemption is what enables your nonprofit to raise funds and apply for grants.
Apply for Texas tax exemption: Texas state laws allow certain types of corporations to be exempted from paying tax in Houston.
Register for charitable fundraising: You need to register in the state where you wish to solicit for donations.
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