I am a missionary and Im wanting to know the positive and negitive sides to going non profit with my work?

Answer 1

Congratulations on deciding to do missionary work. Becoming a non-profit can be a seemingly daunting task, but it doesn't have to be.

I would first suggest you look into how to incorporate a business in your state. Start there. From now on, your nonprofit is considered a form of business.

Second, you will need to fill out an application for nonprofit status with the IRS. It is a fairly lengthy form, but you can do it yourself. A tax professional or CPA will charge hundreds of dollars to complete this step for you. Basically you will need to state what your organization does, and what benefit to society it serves.

Once you receive approval, and it may take a few months, you are allowed to tell donors that their donations are deductible on their tax return. This is a big deal. People are more likely to give money to you if they get a benefit on their tax return.

The only hassle you may have with being a non-profit is that you must file Form 990 every year. Basically it is a business tax return for a nonprofit entity. Most people just remember to file that around the same time they file their personal return and they never forget. The bookkeeping isn't too horrible. Just have a separate checking account and use accounting software for nonprofits.

It seems like a lot, but it really isn't. The first year of setup is the worst, but after that, it is smooth sailing. Why don't you see if you can get a free consult with someone who does taxes for more help?

Answer 2

As a missionary, are you not already working for a religious or missionary organization that has nonprofit status? If this is an individual mission, forming a nonprofit org will enable you to solicit funds from foundations and apply for grants that support your cause, but on the negative side, there is a lot of work required to start up and keep records for a nonprofit.

Answer 3

"Nonprofit" and "charity" are treated differently for tax purposes. "Nonprofit" is not a classification for federal tax purposes, although you may have tax benefits at the state or local level.

I assume you wish to be classified as a charity. You have to apply for and be approved as a charity, unless you are already an organized church (which I assume is not the case). Charities are tax-exempt. Qualified donations to charities are deductible to the donor. Charities must file their annual return, which is Form 990.

If you set up a charity and then work for the charity, that does not mean your salary is tax-exempt.

The downside, of course, is the complexity of the tax code dealing with charities. You can read details here

http://www.irs.gov/charities/

Answer 4

Do you really want to be a 501C3 nonprofit status?

That will limit what you are able to say and do....

How much are you willing to give to Ceasar?