Josh Wagner, Principal
413 Western Drive #15
Santa Cruz, CA 95060-3078
ph 831-423-two-3-two-3
fax 831-401-one-zero-eight-two



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    Adjust Your Accounting to Form 990

    How to Report Your Expenses on IRS Form 990

    Nonprofit organizations report their expenses on page 10 of Form 990. Below are the line numbers on page 10 of Form 990 and a description of the expenses that the IRS likes to see on each line.

    If you use this as a guide when configuring your accounting program's expense line-items, it will provide the most efficient and seamless way to transfer information from your Profit and Loss Statement to Form 990.

    (If no explanation is provided, it means that the particular line is either self-explanatory or may not be used that often.)

    1. Grants and donations to US organizations or gov't agencies – You do not need to itemize grants and donations totaling less than $5,000 to any single organization or agency

    2. Grants and donations to US individuals – If the total amount of grants and donations on this line exceeds $5,000, you’ll need to itemize each type of grant (but recipients’ names are not disclosed)

    3. Grants and donations to organizations and individuals outside the US – If the total on this line is more than $5,000, additional information needs to be provided

    4. Benefits paid to members of your organization – This does not include employee benefits, which are reported on lines 5, 6, 8 and 9

    5. Compensation of all current officers, directors, and key employees (key employees are those receiving total annual compensation of $150K or more) – This includes salary and all benefits paid to these individuals

    6. Compensation paid to “disqualified” people (usually donors of $5K or more in a year)

    7. Other salaries and wages – This is where salary and wages (but not benefits) paid to all employees not listed in 5 and 6 above are stated

    8. Pension plans – This is where pension plan payments for all employees not listed in 5 or 6 above are stated

    9. Other employee benefits – List expenses for employee benefits such as health insurance (as well as for employee events, such as holiday parties, picnics, etc.), but exclude benefits for employees listed in lines 5 and 6

    10. Payroll taxesList amounts paid by the organization for all payroll taxes, including Social Security, Medicare, unemployment taxes, workers’ compensation, etc. (but do not include amounts withheld from employees' salaries)

    11. Fees paid to independent contractors – These are divided into lines 11a-11g (Management, Legal, Accounting, Lobbying, Professional fundraising, Investment management, and Other) and are fairly self-explanatory

    12. Advertising and promotion – This includes amounts paid for print and electronic media, signage, and payments to independent contractors for advertising (but not for advertising for fundraising campaigns)

    13. Office expenses – This broad category includes supplies, telephone, postage and delivery, equipment rental, bank and credit card fees, and printing of a general nature

    14. Information technology – Includes hardware; software; tech support services; Web site design, operation and security; virus protection; IT contractors; etc.

    15. Royalties – Includes payments for the use of intellectual property, copyrighted materials, etc.

    16. Occupancy – Includes rent and utilities, property insurance, real estate taxes, and mortgage interest

    17. Travel – Includes fares, mileage reimbursement, meals and lodging, per diems, and all costs associated with operating vehicles owned by the organization

    18. Payments for travel or entertainment of public officials

    19. Conferences, conventions, meetings – Includes the cost of conducting meetings related to organization’s activities, and registration fees (but not travel) to send staff members to meetings

    20. Interest

    21. Payments to affiliates

    22. Depreciation and amortization

    23. Insurance – Does not include employee health insurance and property or occupancy-related insurance

    24. Other expenses – This is divided into lines 24a-24e and allows you to fill in sub-categories in 24a-24d. The amount for non-classified miscellaneous expenses (line 24e) cannot exceed 10% of total expenses.