If you are an independent contractor who has worked with a nonprofit organization, you may have received an IRS Form 990. This form is used by tax-exempt organizations to report their financial information to the Internal Revenue Service (IRS). As an independent contractor, it is important to understand what information is included on this form and how it can impact your tax obligations.
The IRS Form 990 serves as a public disclosure document that provides detailed information about a nonprofit organization’s finances, including revenue, expenses, and assets. This document must be filed with the IRS by all tax-exempt organizations, including charities, foundations, and other nonprofits. The form is used to report information about the organization’s mission, programs, and governance, as well as its financial activities.
For independent contractors who have worked with a nonprofit organization, the IRS Form 990 can provide insight into the organization’s financial health and stability. You may be able to see how much the nonprofit paid you for your services, as well as other expenses it incurred during the year. This information can be useful when negotiating future contracts or determining whether to continue working with the organization.
In addition, if you earned more than $600 from the nonprofit during the year, the organization is required to report your earnings on the IRS Form 990. This can impact your tax obligations, as you will need to report this income on your own tax return. Be sure to keep accurate records of all income received from the nonprofit, as well as any expenses related to the work you performed.
It is important to note that not all independent contractors will receive an IRS Form 990 from a nonprofit organization. The form is only required to be filed by tax-exempt organizations, so if the organization you worked with is not tax-exempt, it may not be required to file this form. However, even if you do not receive a Form 990, it is still important to keep accurate records of all income and expenses related to your work as an independent contractor.
Overall, the IRS Form 990 can provide valuable information for independent contractors who work with nonprofit organizations. By understanding what information is included on this form and how it can impact your tax obligations, you can better manage your finances and make informed decisions about your work as an independent contractor.