Nonprofit Accounting Basics

Advanced Search

Definition of an Officer

Originally Posted: May 20, 2009

An officer is a person elected or appointed to manage an organization’s daily operations, such as a president, vice president, secretary, or treasurer.

Definition of Key Employee

Originally Posted: May 20, 2009

The definition of a key employee includes a three part test. To be a current key employee all three tests must be met:

The $150,000 Test

Governance Review of the Form 990

Originally Posted: May 20, 2009

Form 990, Part VI, Line 11 relates to the organization’s process for filing the Form 990 prior to the form being filed with the IRS. Line 11 includes two parts.

Independent Voting Members of the Board

Originally Posted: May 20, 2009

The definition of an independent voting member of the Board of Directors includes four criteria that must be met for independence:

Internal Controls

Originally Posted: May 19, 2009

What are internal controls?

Internal controls are the financial processes and procedures that enable the organization to safeguard its assets.

State, County and Municipality Requirements

Originally Posted: May 19, 2009

Being recognized as a tax-exempt nonprofit may provide you with extra benefits but you may also need to file additional forms.

Tax Exemption

Originally Posted: May 19, 2009

Probably the main reason for you to form a nonprofit organization rather than a for-profit entity is the exemption benefits that come with the tax-exempt status.

Incorporation

Originally Posted: May 18, 2009

By incorporating your nonprofit you create a legal entity whose primary function is to provide limited personal liability protection to those managing the organization.

External Process

When setting up your nonprofit organization, the two key steps you want to accomplish: incorporate the organization (not obligatory but wise) in your state of main activity and apply for its tax-exempt status with the IRS. In addition, you should investigate what other registration and licensing requirements apply to your organization in order to be compliant with federal, state, and local laws and to be able to reap the additional benefits your tax-exempt status provides.

Setting Up Office

Originally Posted: May 18, 2009

One of the first practical tasks is to set up an office for the organization.

Pages