How to Start Your Own Nonprofit

By Benjamin Pimentel
huffingtonpost.com

Nonprofit organizations often come from the heart.

 They can begin with a goal of addressing a social or community issue or need. Making money may not be on the priority list. But you can still set up your nonprofit in ways that help keep costs down, particularly taxes. You can then direct more funds toward achieving your organization’s objectives.

 Here’s what you need to know:

 Steps to take to start your nonprofit
 

The first step is to register your nonprofit in the state where you want to incorporate. An organization called the National Association of State Charity Officials has information on filing requirements for charitable organizations in different states. The U.S. Small Business Administration also has information on the state agencies where you can file papers of incorporation.

Once you’ve registered your nonprofit, you must file IRS Form 1023, which is the formal request that the IRS recognize you as a 501(c)(3) organization eligible for tax exemptions under this rule.

If you are going to ask an attorney or some other party to represent you on matters related to your application with the IRS, you also need to fill out and submit Form 2848.
You also will have to fill out and submit IRS Form 990, or “Return of Organization Exempt From Income Tax.”

Timing is an important consideration. According to IRS rules, you must file for nonprofit tax-exempt status by the end of the 27th month after your organization is legally created, which means when your group is formally incorporated.

The application can be a long and tedious process, so you’ll need patience. The IRS will have a tax specialist go over your application and may ask for more information. But if your nonprofit passes the test, you will get a “determination letter” recognizing your tax-exempt status.

Overview of nonprofits

Now that you know the basic steps, let’s take a step back.

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