Are U.S. nonprofits tax-exempt?

LaCharla Figgs

Last Update il y a 3 ans

Yes and No. Simply being an incorporated nonprofit doesn't automatically grant tax-exempt status.


Many--if not most--charitable nonprofits seek exemption from federal income taxes through the Internal Revenue Service (IRS). Having this status is an achievement for nonprofits, because it let's potential supports know the federal government agrees that the organization is a legitimate mission-driven, rather than profit-driven organization.


Achieving this status may make the organization eligible to apply for exemption from some state and local taxes as well. Jurisdictions have their own rules about this, though, so be sure to check the rules with your state, county, and city officials to get every kind of exemption possible.


You'll also find that the rules tend to be more relaxed for houses of worship. For example, IRS considers them exempt from federal income taxes, whether or not they apply for that tax exemption.


Also, when you're making purchases or traveling on behalf of your nonprofit, be sure to ask in advance about potential tax exemption or other savings for nonprofit organizations.

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