Filing Form 990-PF can feel like a daunting task, but with the right preparation, it doesn’t have to be overwhelming. Whether you’re managing the filing process yourself or working with a professional, staying organized throughout the year will save time and reduce stress. This guide will walk you through how to categorize expenses, keep essential documents in order, and follow best practices to ensure a smooth and accurate filing experience.
Categorizing Expenses
To streamline the filing process, categorize expenses throughout the year into the following main categories:
- Administration and Management: Office supplies, rent, staff salaries, and benefits.
- Expenses Incurred to Produce Income: Investment fees and board meeting expenses related to investment discussions.
- Grants and Charitable Programs: All grants and charitable program expenses should be documented.
Organizing Your Files
Keeping well-organized files throughout the year will make filing Form 990-PF more manageable. Here are the key documents you should have on hand:
Banking and Investments
- Bank Statements: Retain all monthly statements for the current tax year and the final statement from the previous year.
- Investment Schedules: Include custodial statements detailing interest income, dividend income, realized gains/losses, ending costs, and market values.
- Investment Statements: Keep all monthly investment statements for the current tax year and the final statement from the prior year.
Expenditures
- Professional Fees: Prepare a schedule of legal, accounting, and other professional fees.
- Grant Details: Maintain a list of all grants paid, including:
- Grantee name, address, and status (e.g., public charity, private operating foundation).
- Purpose and amount of each grant.
- Relationships to foundation managers or substantial contributors (if the recipient is an individual).
- Unpaid Grants: List all approved but unpaid grants at year-end with the same details as paid grants.
Taxes
- Excise Tax Schedule: Document excise tax paid, prior-year credits, and whether overpayments should be refunded or credited.
- Unrelated Business Income: Record details such as activity type, gross receipts, related expenses, and copies of K-1 reports.
Trustees, Staff, and Substantial Contributors
- Trustees Information: List all trustees, their titles, weekly hours, compensation details, benefit plan contributions, and expense allowances.
- Staff Compensation: For employees (excluding trustees) earning over $50,000, provide names, addresses, compensation, benefit plan contributions, and expense allowances.
- Independent Contractors: List names, addresses, total compensation, and services for contractors paid over $50,000.
- Major Contributors: Identify individuals/entities contributing more than 2% of total contributions or note if no contributions were made.
Grants Program Information
- Application Process: Outline how grantseekers can apply, including contact details, application forms, and submission requirements and deadlines.
- Restrictions: Note any geographic or programmatic restrictions, or indicate if unsolicited proposals are not accepted.
Organizational Documents
- Foundational Documents: Retain copies of articles of incorporation and bylaws.
- Board Meeting Minutes: Keep minutes from board meetings held during the current tax year and any subsequent meetings.
Miscellaneous
- State Registrations: List all states where the foundation is registered or required to report.
- Web and Contact Information: Provide the foundation’s website (if applicable) and bookkeeper’s contact details.
- General Ledger: Include a detailed general ledger and prior-year trial balance.
While we intend for this list to be as comprehensive as possible, it does not necessarily include every item that you may need to complete the Form 990-PF.
General Tips Before Filing
Before completing Form 990-PF, consider the following tips:
- Order of Completion: Follow the IRS-recommended nonsequential order for filling out the form.
- Stay Updated: Review the IRS instructions for updates in the “What’s New” section.
- Complete All Sections: Fill in all applicable line items, entering “None” or “N/A” where needed. Ensure all total lines have entries, even if the value is zero.
- Include Supplementary Documents: Attach all required supplementary statements and Schedule B, if applicable.
- Board Review: Depending on your foundation’s structure, consider having board members review the draft Form 990-PF before submission.
By staying organized and following this guide, you can simplify the filing process and ensure your foundation remains compliant with IRS requirements.
Key Resources for Form 990-PF Filing and Legal Compliance
Foundations 101: Legal Basics
March 4, 2025, 2:00 pm – 3:30 pm EST Virtual Seminar
This session covers key foundation rules, including Form 990-PF, public disclosure, and self-dealing, helping you spot issues and know when to seek legal guidance. Learn More »
Filing the Form 990-PF
At least 25% of Form 990-PFs contain errors—don’t let yours be one of them. This primer identifies problem areas, offers guidance on tricky sections, and includes a sample form to help your foundation file correctly and with confidence. See What’s Inside the Primer »