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Ways to make a tax exempt org

A 501(c)(3) nonprofit corporation is basically a type of charitable organization that the Internal Revenue Service would recognize as tax exempt. This type of corporation would not exactly pay income tax on its earnings or on the donations it receives. Also, any time a taxpayer makes a donation to a so called or more known as 501(c)(3) nonprofit, they can reduce their taxable income by the amount of their donation if they are able to itemize their deductions on their federal income tax return. This incentive encourages private charity and makes it easier for nonprofits to raise money for their own rightful benefit.

The best reason to form a 501(c)(3) nonprofit corporation is because you have basically determined that it is the most effective way for you to pursue a charitable goal which is easy for you. Maybe there is a need that is not really being fulfilled by existing organizations or maybe you think you have a better idea that will meet a need which is more effective than what any existing organization is doing. You need to think about whether you will best be able to meet your goals by forming and running a new organization or maybe whether you could do more good by donating your time and/or money to any existing organization which you may know off. Once you have been able to determine that you want to proceed and you have also determined that your organization roughly meets the IRS requirements, then you would know that it is time to start dealing with the red tape. Decide if you want help since you may hire a lawyer if you have the resources, you can even use a do it yourself legal service like (a popular site for this) if you do not. A lawyer can actually provide you personalized guidance if you were to choose and help you avoid costly mistakes, but there are some people who do manage on their own. To add to that, following the official required steps, it is not a bad idea to make a business plan or plan out your moves, just like you would if you were starting a for profit business. Although your organization will be a nonprofit organization, you will still have to operate in the dark or back seat if you want to keep your organization running. Nonprofits are allowed to be profitable as well. They just need to be able to use those profits to further the organization’s public purpose. In an effect to contrast that, a private corporation exists to enrich its employees, managers and shareholders as well.

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