Nonprofit filings and the records behind them
Updated 16 October 2026
A tax-exempt nonprofit pays no income tax on earnings from its mission, and it still reports its finances to the IRS every year. The yearly report is a version of Form 990. The state where the organization operates sets its own rules as well. This article covers what the organization's books need to hold so every figure is ready on time. Where an example uses figures, they are round numbers.
Which Form 990 applies
The IRS has three versions of the yearly return for exempt organizations. Form 990-N, called the e-Postcard, covers the smallest organizations, with receipts under $50,000. Form 990-EZ covers organizations with receipts under $200,000 and total assets under $500,000. Larger organizations file the full Form 990. Filing the wrong version, or filing late, can bring penalties, and it can put the organization's exempt status at risk.
The books supply the two figures that decide the version: receipts for the year and total assets at year end. The CPA confirms the version from those figures.
The figures are an illustration. A neighborhood club with $38,000 of receipts sits under the $50,000 line for Form 990-N. A food pantry with $140,000 of receipts and $320,000 of assets sits under both Form 990-EZ limits. A youth league with $140,000 of receipts and $560,000 of assets is over the $500,000 asset limit, so it files the full Form 990.
The due date
Form 990 is due on the 15th day of the fifth month after the organization's fiscal year ends. An organization whose year matches the calendar has a different date from one whose year ends in June. Putting the date on the board calendar at the start of the year gives the bookkeeper and the CPA a fixed point to work back from.
A year ending 31 December 2025 has a due date of 15 May 2026. A year ending 30 June 2026 has a due date of 15 November 2026. A year ending 30 September 2026 has a due date of 15 February 2027. In each case the books need to be closed and reconciled some weeks before that date.
Income from activities outside the mission
Some nonprofits earn money from an activity unrelated to their exempt purpose. A coffee shop open to the public is one example. Profit from that kind of activity may be taxable as unrelated business income, and the tax is reported on Form 990-T. The books keep that activity's sales and costs in their own accounts, so the CPA can see the profit on its own.
The figures are an illustration. A community center runs a coffee shop that sells $60,000 in a year. Its coffee, wages and supplies cost $48,000, which leaves $12,000, or 20% of its sales. With those figures in separate accounts, the books show whether the shop has unrelated business income.
Donations and grants
Each donation is recorded with the donor, the date, the amount and any restriction. Donors receive a receipt for their gifts, and the organization keeps copies for an audit. Grants often come with their own reports to the funder, on their own schedule. The books track each grant so those reports and the Form 990 draw on the same figures.
The figures are an illustration. A nonprofit records 420 gifts totaling $186,000 and two grants totaling $95,000. Each of the 420 gifts has a receipt on file. The two grants each have a funder report due 60 days after their period ends. The gift total and the grant total in the books match the figures on the return.
Payroll
A nonprofit with employees withholds income tax, Social Security and Medicare from wages and files employment tax returns. A payroll provider or payroll software runs the calculations and the filings on schedule. The books record gross wages, each withholding and each deposit, so the payroll figures agree with the general ledger.
The figures are an illustration. A nonprofit's payroll report shows $42,000 of gross wages for March. The general ledger shows $42,000 of wage expense for March. The withholding accounts show the amounts the payroll provider deposited. When the three figures agree each month, the year-end payroll totals agree as well.
A filing year, month by month
Records kept through the year make the return a matter of assembly. The records sit in accounting software designed for nonprofits. Reminders for each due date sit on a shared calendar. A professional reviews the return before it is filed, and board members and volunteers learn the basic rules that apply to them. Rules change, so the CPA or an association for nonprofits keeps the organization informed.
Each month, the bookkeeper reconciles the bank accounts and records gifts, grants and payroll. In January, the books close for the prior year and gift receipts are complete. By March, the CPA has the closed books. The Form 990 is due on 15 May.
What this means for a nonprofit
The version of Form 990 depends on receipts and total assets. The due date is the 15th day of the fifth month after the fiscal year ends. Unrelated business income sits in its own accounts. Every gift has a receipt, and every grant has its own tracking. Payroll totals agree with the ledger each month.
Books ready for the CPA
Averan Advisors keeps nonprofit books current through the year and closes each month by a set date. See bookkeeping and monthly close for that work.
The nonprofit finance resources hub covers fund accounting, board reporting, grants and reserves.
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- The call takes thirty minutesYou describe the business and where the numbers are letting you down. We give you an expert view of your situation, and what we would start with. There is no pitch deck.
- We look at the fileYou give us read access to the books as they are. We come back with what is wrong, what it will take to fix, and whether the answer is bookkeeping, controller work, or something else.
- We send a written scope and a priceIt lists what we do each month, what you get, the date it lands and the fee. We agree it before anything starts, and it does not change unless you agree.
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