A2Z Filings

Advantages of Having the 501(c)(3) Tax-Exempt Status for Your Organization

If you’re thinking of starting a non-profit charity organization,we recommend you immediately file for tax exemption under the IRS requirements.

The IRS recognizes non-profits as entities that can be exempted from paying federal income tax and receive tax-deductible donations.

All in all, becoming a 501(c) (3) approved entity can be very beneficial for you. In this blog, we have highlighted all the benefits of tax exemption.

Sense of Fulfillment

The first thing any Non-Profit Organizationowner wants is a sense of fulfillment. They need to give out the message of harmony, unity, support, and love. Among all these things, they have to stay code compliant and successful. And in the end, money and support are required to keep an organization going. This is where your 501(c) (3) comes into play.

This status will help you ensure a steady income while having a grip on your sense of fulfillment and giving back to the community.

Low Postage Rate

A Non-Profit Organization, which is 501(c) (3) approved, enjoys low postage rates. They can mail more than 250 copies of a single draft at a very low cost. In addition, this exemption also qualifies you for limited but free TVC and radio announcements generating cause awareness.

Eligible for Grants

With the tax-exempt status, organizations are eligible to apply for grants. This is a huge benefit, considering that Non-Profit Organizations often require external help to keep their operations running smoothly. It’s quite evident that a majority of funders and grant approvers look for Non-Profit Organizations that are tax-exempted.

You Can Buy Things Tax-Free

The 501(c) (3) tax-exemptions status allows Non-Profit Organizations a special exemption from paying the sales tax when buying things. However, these purchases must be in-line with your daily business operations.

Eligible to Get Volunteers Without Paying Them

With the tax-exempt status, Non-Profit Organizations can exercise a special right to get volunteers for their daily operations. And the best part is, you may not have to pay the hired volunteers under this unique exemption.

A woman setting money aside for tax returns

Which Factors Can Affect Your 501(c) (3) Status?

Important Note: If you don’t file a 990 tax return for three consecutive years, you will lose the 501(c) (3) status.

While the 501(c) (3) status offers myriad benefits to non-profit organizations, there are some things that affect its integrity. These factors include benefits that are received from private sources. Lobbying, money laundering, and political activities can lead to tax exemption revocation.

Lastly, if you start earning any UBI, i.e., excessive unrelated business income via your non-profit entity’s accounts, the IRS will immediately eliminate your name from the exemption list.

Let Our Expert Filing Team at A2Z Filings Help You

Need expert assistance in filing all the paperwork and meeting IRS’s stringent requirements for the 501(c) (3) form? Don’t worry because A2Z Filings is here to help. As a prominent name in the document filing services sector, we offer a complete form filing, bookkeeping, and business management solution for Non-Profit Organizations in the US.

Get in touch with us right away!