Starting a not-for-profit just to reduce your tax liability is a bad idea.
Image courtesy of Pixabay.com New federal guidelines have been implemented for 501(c)(4) not-for-profits. The new guidelines require new 501(c)(4) organizations to file a “Form 8976” with the IRS to notify the IRS that the organization is operating as a 501(c)(4). Some existing organizations may also need to file the form. A Google search of Form [...]
Tax-exempt organizations are exempted from paying income tax and federal unemployment tax... but they might have other tax liabilities that they’re responsible for.
In the last couple of years, I’ve had the chance to help several small not-for-profits that were trying to get off the ground. One of the first questions they have is: can we be a 501(c)(3)?