Navigating a Nonprofit’s Tax Obligations and Exemptions

As a nonprofit, maintaining 501(c)(3) status is essential to operational success. This status is so important because it grants nonprofits exempt status from certain taxes both at the federal and state level and allows donors to make tax-deductible contributions. During its operations, a nonprofit will encounter many tax questions that must be resolved correctly; otherwise, the nonprofit risks losing this critical 501(c)(3) status. While hundreds of questions may arise during the normal course of a nonprofit’s operations, this article focuses on just a few and provides a brief overview of important tax laws that nonprofit organizations should consider.

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