Before you get too immersed in the excitement of a new fiscal year, schedule some time now to organize the documents you will need to file your Form 990. Whether you prepare this tax form in house or hire an accountant to complete it, gathering the documents directly after the fiscal year closes will ensure greater success.
The filing deadline may seem far in the future*. But if you wait until a month before the deadline to get started, the financial and programmatic activities of the previous fiscal year will live in the far distant past. If you start today, these activities will be fresh in your mind.
To help you get started, take a look at this list of five things to do. You’ll be happy you did.
1. File for an extension. Even if you file on time, an extension will give you some breathing room.
2. Create a profit and loss or income and expense report for the previous fiscal year. And prepare to allocate your expenses to Program vs. Fundraising vs. Management & General categories, as the 990 requires. Review every line item for accuracy.
3. Create a balance sheet for the fiscal year that just ended. Make sure you’ve checked your current Unrestricted and Temporarily Restricted Net Asset Balances. Review each account to make sure its balance is justified. Bank account balances should have been reconciled with bank statements. Accounts receivable balances should all still be collectible. Accounts payable balances should include all expenses from the previous fiscal year that weren’t paid. Accrued vacation pay or PTO balances should have been updated.
4. Review your board minutes and note any times that your conflict of interest policy was invoked. You have a conflict of interest policy, right?
5. Create a list of donors who contributed $5,000 or more in the previous calendar year, include their addresses, donation amounts and dates of donations. Indicate whether the gifts were asset gifts (equities, property, vehicles over $5,000) or cash.
*If your fiscal year ends on Dec 31, your 990 is due on May 15. If your fiscal year ends on June 30, your 990 is due on Nov 15.