Choosing a Name for Your Nonprofit Organization Is the First Step Your non-profit’s name must be original and unclaimed by another Utah-based organization. Utilizing the Utah State Business Name Search tool, you may determine whether a name is available.
Make Your Non-Profit Articles of Incorporation in Step 2 Your non-profit organization is legally established in the state of Utah under the Articles of Incorporation. It must list the objectives of your organization, its name, and the founding directors’ names and addresses. The Utah Division of Corporations and Commercial Code is where you can file your articles of incorporation.
Get Your Non-Profit Federal Tax ID (EIN) in Step 3 You must request an EIN (Federal Tax Identification Number) from the IRS. To open a bank account, apply for tax-exempt status, and file taxes, you’ll need an EIN. On the IRS website, you can submit an online application for an EIN.
Apply for Tax-Exempt Status in Step Four You must complete IRS Form 1023 or Form 1023-EZ to request tax-exempt status. The form requests details about your organization’s finances, operations, and activities. Additionally, copies of your bylaws and articles of incorporation are required. Your organization will be free from federal income tax after it has been approved.
Tax Returns for an LLC An LLC is a pass-through entity, which means that the owners’ personal tax returns must include information about the business’s revenues and losses. Form 1065, the partnership tax return, must be completed in order to file taxes for an LLC. The Schedule K-1 that each owner will then get details their portion of the business’s gains and losses for them to report on their personal tax returns. Closing an LLC with a Single Member with the IRS You must file a final tax return and tick the box that says that this is the entity’s final return if you have a single-member LLC and want to close it with the IRS. You must also inform the IRS if you want to cancel your EIN.
The Drawbacks of an LLC An LLC might be more expensive to establish and operate than a single proprietorship, which is one drawback. Furthermore, there are various limitations on who can join an LLC, and some jurisdictions demand annual fees and reports.
What Is Tax Deductible for a Single-Member LLC? Rent, utilities, office supplies, and travel expenditures are all deductible business expenses for a one-member LLC. The LLC may also write off the cost of goods sold, asset depreciation, and some employee perks. To make sure you are claiming all eligible deductions, it’s crucial to keep detailed records of every expense and speak with a tax expert.