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Running a pet rescue is a noble calling, and it's important to understand the rules nonprofit entities must follow when filing tax returns with the IRS. In fact, you have to take the necessary steps to ensure that you don’t end up paying too much in taxes by the end of the year, or worse, get hit with harsh penalties. The good news is that there is tax help available, allowing you to focus on running your shelter without getting in trouble.

File the Appropriate Paperwork Right Away

You may think that running a not-for-profit business is enough to protect you from paying taxes, but that’s not true. Everything requires a paper trail, which is why you must formally apply for 501(c)(3) status with your state government.". You’ll need to create a name, mission statement, and bylaws for your pet rescue and submit it with your request.

tax helpReceiving this tax-exempt status is important because you don’t have to worry about taxes on any of the funds you receive for your business. Also, anyone who donates to your shelter can write it off as a deduction on their personal income tax return. You may even be able to apply for a sales tax exemption in your state; ask a tax preparation expert if you qualify.

Submit the Appropriate Tax Returns

To keep your tax-exempt status, you must file Form 990 with the IRS at the end of your tax year, but you can obtain tax help for getting this done. Throughout the year, you should keep track of the number of hours worked by your volunteers; you will have to disclose this information in the Statement of Program Service Accomplishments area on your return.

 

Do you need tax help for your rescue organization? Give the experts at ZP Tax a call at (301) 587-4829 to make an appointment. These friendly tax professionals can help you with planning and income tax preparation in Silver Spring, MD. Visit their website to learn more about the services they offer. 

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