CPA for Nonprofits in Los Angeles

Situations We Handle

Which return the organization files. Gross receipts normally $50,000 or less: Form 990-N, where "normally" means $75,000 or less received or pledged in the first year, an average of $60,000 or less over the first two years, and an average of $50,000 or less over the prior three years after that. Gross receipts under $200,000 and total assets under $500,000: Form 990-EZ or Form 990. Gross receipts of $200,000 or more or total assets of $500,000 or more: Form 990. A private foundation files Form 990-PF regardless of size. California requires FTB 199N when gross receipts are normally $50,000 or less and Form 199 above that, with private foundations filing Form 199 regardless, in addition to the federal return; a 2025 Form 990 must be e-filed, and a paper return where e-filing is required is treated as not filed. We determine the forms from the books and prepare the federal and California returns together. See Business Tax Preparation.

Due dates, extensions and the three-year rule. Both returns are due on the 15th day of the 5th month after the fiscal year ends: May 15 for a December year end, November 15 for a June 30 year end, moving to the next business day when the date falls on a weekend or holiday. Form 8868 gives an automatic six-month extension for Forms 990, 990-EZ, 990-PF and 990-T, one per year, and does not extend the time to pay; it cannot extend a 990-N. California extends Form 199 automatically for six months when the entity is not suspended, and never extends the 199N. A late Form 990 costs $25 a day up to the lesser of $13,000 or 5 percent of gross receipts, and $130 a day up to $65,000 when gross receipts are over $1,309,500; a late Form 199 costs $5 a month up to $40. There is no penalty for a late 990-N, but an organization that files nothing for three consecutive years loses its federal exemption automatically on the due date of the third return, with no appeal, and must reapply; California revokes the exemption of a 199N filer the same way. We keep the filing calendar for both agencies and file the extension when the books or the audit are not ready in time.

The Attorney General's registry. A charity registers with the Registry of Charities and Fundraisers within 30 days of first receiving charitable assets, including donations, property and government grants. Each year it files Form RRF-1 with a copy of the Form 990, 990-EZ or 990-PF as filed, without Schedule B, or Form CT-TR-1 if it files the 990-N, due 4 months and 15 days after the fiscal year ends; IRS extensions are honored. The fee is $25 for total revenue under $50,000, $50 to $100,000, $75 to $250,000, $100 to $1,000,000, $200 to $5,000,000, $400 to $20,000,000, $800 to $100,000,000, $1,000 to $500,000,000 and $1,200 above that, and the Registry is launching an online filing service for all registrants in 2026. We prepare the RRF-1 from the finished return so the two agree. A charity with gross revenue of $2,000,000 or more in a fiscal year, excluding government grants and contracts that require an accounting, must have its financial statements audited by an independent certified public accountant, make them public like its Form 990, and have an audit committee appointed by the board that includes no staff and is separate from any finance committee. We do not perform audits; at that level we keep the books, prepare the schedules the auditor asks for, and prepare the returns from the audited figures.

Books that feed the return and the renewal. Donations, grants, program fees and event revenue are recorded by program and by restriction, so the revenue and expense lines of Form 990 and the total revenue on the RRF-1 come straight from the books, and any unrelated business activity is kept in its own accounts. An organization with gross income of $1,000 or more from an unrelated business files Form 990-T in addition to its Form 990 and pays estimated tax when the year's tax is expected to be $500 or more; California requires Form 109 when unrelated business taxable income is more than $1,000. See Bookkeeping.

Payroll under the reimbursable method. Nonprofit employers are subject to unemployment insurance, the employment training tax, State Disability Insurance and personal income tax withholding. A 501(c)(3) may instead elect the reimbursable method for unemployment insurance, repaying the state the actual cost of benefits paid to its former employees, by filing form DE 1SNP with its DE 1NP registration or later, in which case the election takes effect on the first day of the quarter it is filed; disability insurance contributions and income tax withholding remain due. We run the payroll, file the DE 9 and DE 9C and Form 941, and prepare Forms W-2 and 1099-NEC at year end. See Payroll.

Sales tax and the city business tax. In California all sales are taxable unless the law provides a specific exemption, so a nonprofit that sells merchandise generally needs a seller's permit even when some sales are nontaxable; fewer than three fundraising events with taxable sales a year can be covered by temporary permits, three or more need a regular permit, and sales at auctions and rummage sales and tickets that include a meal count as sales. The City of Los Angeles business tax exemption for an organization recognized under IRC section 501 is applied for, not automatic: the Office of Finance issues an exempt Tax Registration Certificate, sends a renewal notice every three years, and refunds tax paid while exempt only within one year of the overpayment. The books separate taxable sales from donations so the sales tax return can be prepared from them.