Monthly Accounting

Typically an organization that is making application for exemption operates as a “for profit” corporation based on entity format, until approved as a not for profit. Their financial activities are accounted for in a similar manner as well. However, once you receive your tax exempt status, you are now going to operate as a 501C3 or a 501Ca “Not for Profit.” The accounting for this new entity will be completely different then the previous entity you began with.

For example, on a for profit company you would file an 1120 corporate income tax return, versus the 990 return for not for profit.  There will be different users reviewing your financial stmts, such as the board of directors, regulatory agencies and organizations that you will be looking to for funding.  The financial statements of your new Not for Profit will be very different then that of the your for profit corporation. So it is imperative that you understand it will be a necessity for the new founder of the tax free organization to obtain assistance from Certified Public Accountant for their guidance through this very different maze.