what is a 501(c)3?

Question

I am starting a private pet rescue. What is a 501(c)3? Do I need one? What does it mean?

Thanks to all!!

Answer 1

"501(c)(3)" refers to section 501(c)(3) of the tax code; it confers tax-exempt status on any "public charity," meaning an organization that is "organized and operated exclusively" for religious, charitable, scientific or educational purposes, or for the prevention of cruelty to animals.

Getting 501(c)(3) status isn't required, but it's a huge incentive for nonprofit organizations for three major reasons. 1) first, the obvious one, is that 501(c)(3) organizations don't have to pay income tax on whatever gains they receive each year (i.e. donations from the public); 2) second, contributions TO 501(c)(3) organizations are tax-deductible to the donor. So it's a big incentive for someone to donate to a public charity (as opposed, to, say, a foundation), because that person can deduct it on his own tax return. 3) finally, many grant programs from government entities or private foundations require that the applicant have 501(c)(3) status.

Look at Form 1023 at the IRS' webpage to look at the 501(c)(3) application and instructions. Obviously, it helps to have a lawyer prepare this application for you, as well as advise you on how to form your pet rescue (as a corporation, partnership, etc.); if your new organization is currently strapped for cash, perhaps a clinic at a local law school could help you.

Answer 2

It's the tax code for a Non Profit Organization. If you plan to operate on a large scale, you will need donations and a tax shelter. You will need a lawyer to fill out the paper work for the 501 application.

Answer 3

501(c)3 is a tax-exempt status for non-profit organizations. if you intend for your business to be a non-profit, yeah, you need one.