Are you planning on starting your own Nonprofit in 2017? If so, don’t apply for an EIN number first, like I did.
We received an early Christmas present from the IRS this year. They sent us our letter certifying our ministry’s tax-exempt status! I felt so excited and nervous that I had my wife open it and read it aloud to me.
Along the way, I did a few things right. I also made a LOT of mistakes along the way. Yet somehow, we made it through.
One of the biggest mistakes I made in setting up our non-profit was to start the process by applying for an Employee Identification Number (or EIN). It was so easy! It left me feeling the excitement that the dream of having our own mission agency was truly coming to pass!
However, a year later, I found out from our tax advisor that applying for an EIN number starts the countdown toward the month when you are required submit your 1023 Form to the IRS. Also, from the day you obtain your EIN number, you are expected to submit forms 941 quarterly and 990 annually. If you don’t know how to fill these out, or even that you must do so, there will be penalties to pay.
When I applied for an EIN number too early, I put in a lot of long hours in order to meet the deadline.
To cover myself, I must warn you that I am not a lawyer. You should always consult a legal professional before taking a step as serious as establishing your own Nonprofit.
Despite the risk, I feel a sense of obligation to “give back” as others generously gave to me. We started this Nonprofit on a shoestring budget. I know what it’s like when finances are tight at the start, and how precious good advice can be.
To help you avoid some of the trouble and anxiety I endured along the way, here is a list of seven steps you should take before you apply for your EIN number.
Continue Reading »
Continue Reading »