IRS Form 990EZ Deadline: Important Information for 2023
The 990EZ is like the little brother to the standard form 990. If you qualify for the 990EZ, you can count your lucky stars because you just saved eight pages of paperwork and the additional stress that those pages would’ve caused filing additional tedious tax information.
But how do you know if you qualify for this form? Essentially, if your organization makes less than $200,000 in gross annual revenue and owns less than $500,000 in assets, you qualify for the 990EZ!
So, now you know that you’ll need to file this form on an annual basis (at least until you grow large enough to start filing the standard Form 990). Now what?
Well, now, you need to make sure that you file this paperwork on time on an annual basis.
When is the upcoming 2023 990EZ deadline?
Registered nonprofits must file the standard 990, 990EZ, 990N, or 990-PF by the 15th day of the 5th month after their fiscal year ends. The majority of nonprofits choose to operate on the calendar fiscal year, meaning the filing deadline is May 15th.
If your fiscal year ends on July 31st, 2023, your tax forms will be due December 15th, 2023. Likewise, if your fiscal year ends September 20th, 2023, your tax forms will be due February 15th, 2024.
Check with your finance team to determine when your fiscal year begins and ends to find the due date of your tax forms.
Overview of penalties for missing the 990EZ deadline.
Now, let’s just say that you’ve had a busy year. You’ve planned all of your virtual and hybrid events, revamped your fundraising strategy, established a budget, designed a new program, and been so productive during the first part of the year.
But before you know it, May 15th has come and gone, passing you by without you even noticing!
There are lots of reasons why nonprofits might miss the deadline, but no matter what, the resulting fines and penalties will be the same. We’ll explore those penalties now.
1. You will be fined.
The fines that are demanded of organizations that file late are pretty straightforward. While Form 990Ns might be a little different, if you know you’ll file a Form 990EZ, the fine structure is very clear:
- $20 per day for each day the return is late.
- A maximum penalty of $10,000 or 5% of your organization’s gross receipts—whichever is less.
These fines are specifically for organizations that make under $1,000,000 during the tax year. If you’re filing the Form 990EZ, we know you make less than $200,000 per year, so you’ll experience the fines listed above.
But just for fun, let’s consider what would happen if you made more than $1,000,000 for the tax year and filed a standard 990 form. If you make this much, you’ll be imposed:
- $100 per day that your return is late.
- A maximum penalty of $50,000 or 5% of your gross receipts—whichever is less.
Pretty big difference, huh? We know that every organization dreams of making over $1,000,000 per year in revenue, which is why it’s important to establish good tax return habits now so that you won’t have to worry about these hefty penalties in the future.
2. You could lose your tax exemption status.
For most organizations, the promise of fines and financial penalties are enough to convince you to file your tax forms on time. However, some organizations need further persuasion.
The IRS took their penalties a step further to appeal to these specific organizations.
If you fail to file your annual tax form for three consecutive years, you’ll lose your tax exemption status.
In this case, you’ll be responsible for paying taxes and no one wants that.
3. You might have to reapply and pay filing fees.
It goes without saying that if your organization loses its exemption status, you’ll want to reapply for it. After all, why would you choose to pay taxes when it’s not absolutely necessary?
Reapplying to reinstate your exemption status isn’t free, though. The user fee for filing a Form 1023 is $600. If you can file a Form 1023EZ, that’s dropped to $275.
But still, why would you pay these fees if you don’t absolutely need to? It’s much better and easier to avoid the situation by ensuring that you file your tax forms each year, preferably by the defined deadline.
Explain why you missed the 990EZ deadline to try to see if fees can be waived.
Ok, we’ve established that you may have missed your 990EZ deadline. But that doesn’t mean the game is up for your organization and that you’re now resigned to pay taxes unaccounted for in your budget.
The IRS isn’t unreasonable! They may not be known for their customer service and ease of use, but the department is made up of humans who understand that sometimes life gets in the way of deadlines.
You could have late fees waived if you have “reasonable cause” for missing the deadline. However, the IRS doesn’t define exactly what is considered “reasonable.”
So you shouldn’t give up hope! Define the specific circumstances that resulted in you missing your deadline for your tax forms. The IRS just might consider it to be a reasonable excuse and waive the fees for your filing.
When you explain the reason why you missed the deadline, you should define:
- What happened and when?
- What circumstances occurred to prevent the tax form from being filed?
- What did you do to try to comply with the deadline?
- How did you handle the situation?
Some say “the truth will set you free.” And often, this is the case. Just mail a letter to the IRS explaining why you were unable to meet the deadline and your fees might be waived.
Submit your correct 990EZ ASAP.
After you’ve mailed a letter to the IRS, the next step is to ensure you submit your 990EZ correctly as soon as possible. Seriously.
The IRS isn’t likely to get back to you right away. Let’s review an example.
Let’s say you accidentally used the wrong EIN when you filed your initial 990EZ. It was a simple mistake that could be made by anyone. You get the notice that there was incorrect information on your form. At this point, it’s past the deadline.
The IRS starts demanding fees of your organization and you immediately mail a letter explaining the situation. Here are the possible outcomes:
- The IRS says, “You’re all good!” and waives the fees. In this case, you’re good to move forward and, hopefully, remember to double check your EIN next year before submitting the form.
- The IRS says, “Yeah, not good enough,” and requires you pay the fees. You pay the fees until you’ve submitted the correct information on your form. If you wait to get the reply from the IRS, the fees will just continue adding up.
To reduce the amount of fees that may be incurred if the IRS doesn't consider your excuse “reasonable,” make sure to submit the correct 990EZ ASAP.
Take steps to avoid missing the 990EZ deadline in the future.
Sometimes, deadlines are forgotten. We get it! Life happens. Unexpected elements and circumstances pop up and sometimes you just forget how much time you’ll need to file your forms.
However, now that you know about the fees and additional work that accompanies missing your filing deadline, it’s important to take steps to make sure it NEVER happens again.
We recommend creating systems for gathering 990EZ financial information, getting in touch with the IRS-approved e-filer, and filing the Form 8868 if you think you’ll miss the deadline. Let’s dive into each of these tips.
Create systems for gathering 990EZ financial information.
After you’ve submitted your 990EZ, you have a full 364 days until you need to file again. Don’t just sit on your hands and wait until your next filing! You’ll find yourself scrambling to get your financial records together and combing through piles of paperwork to look for the information you need.
That’s poor planning.
Instead, create systems of financial organization to keep everything in order throughout the year. Then, when you approach your Form 990EZ next year, it will be easy to find the necessary information to fill out the form quickly, helping you reach your deadline with no problem.
You might put together a report template that records your gross receipts for the week or month, changes in personnel such as promotions or restructuring, and any other information requested by the IRS.
Then, pull this report each month and be sure it’s filed away in a safe location, not shoved in a drawer or saved on your desktop and forgotten.
Finally, be sure to also keep track of copies of your Form 990EZ from year to year. Some of the information will carry over annually such as your EIN number and mission statement. Referencing your old forms will help make filing this information much easier.
The good news is that the best certified e-filers will save this information automatically, carrying it over each year as you file. Plus, these filers will save your past forms for you, but more on that in the next section.
Get in touch with an IRS-approved tax-filer.
Without any guidance, the Form 990EZ can be a major headache. In addition to the form itself, the schedules and pages of instructions can become incredibly confusing for non-tax-professionals.
So you might consider reaching out to a professional.
Professional tax resources for nonprofits are key for ensuring that your information is filed correctly and on time. You can either reach out to an accountant who will file the taxes for you (generally, a somewhat expensive option) or you can reach out to an approved tax-filer (our preferred option).
While an accountant does the taxes for you, a certified e-filer empowers your team to file your annual tax returns on your own. This software puts all of the IRS's complex and tedious diction into easily-understandable terms.
When you leverage one of these tools (like File 990), you’ll also gain access to features like:
- Reminders of upcoming deadlines.
- Imported information (like your EIN number) from the IRS database.
- A secure filing platform.
Note: These platforms are also commonly the same tax filing platforms used by accounting professionals in the industry. You’ll have the knowledge that you’re using the same type of tool as real tax professionals.
File the Form 8868 if you THINK you’ll miss your deadline.
The Form 8868 is another IRS form that grants qualifying nonprofits a 6-month extension for their tax return information.
Yes, we mean a free six month extension. Where was that perk for your college term paper, right?
But in all seriousness, this is a pretty generous policy by the IRS. If you’re in jeopardy of missing your deadline, you can file this extension to buy yourself more time. For instance, nonprofits trying to wrap up their audit before filing their Form 990EZ might find it challenging to meet the deadline of the form.
Missing the IRS form 990EZ deadline can be a frustrating experience when it means being hit with daily penalties and the potential loss of your tax-exempt status. However, by reaching out ahead of time BEFORE you miss your deadline and filing the form 8868, you’ll gain all the time you need to submit your filing and avoid any problems with Uncle Sam.
Note: Keep in mind that you cannot file the Form 8868 to extend your deadline if you’ve already missed it. This should be a premeditated action.
Your Form 990EZ deadline is a big deal! If you miss it, you’ll encounter fees, potentially lose your exemption status, and might have to pay fees to refile for your exemption status again.
The best step you can take? Set yourself up for success by investing in a certified e-filer, keep up with your financial information throughout the year, and (if necessary) file a Form 8868.
If you're looking for more information about the 990EZ and nonprofit tax forms in general, check out the additional resources below:
- Everything You Need to Know About the 990EZ Form. Learn more about the Form 990EZ and the qualifications that nonprofits must meet to file it.
- 990N vs. 990EZ: What's the Difference? [+ Top Tips]. Not sure which form to file? Check out this article outlining the specific differences between the 990N and the 990EZ.
- Can My Nonprofit File a 990 Postcard? If you've discovered that you might actually qualify for the 990 postcard, confirm your suspicions with the information in this guide.
If you have any questions on how to file the IRS 990 EZ
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