What is Schedule L?
Schedule L from Form 990 is used by tax-exempt organizations to report transactions with interested persons, such as board members or key employees. Its purpose is to ensure transparency and prevent conflicts of interest. This form helps the IRS and the public understand how organizations interact financially with those in control. Completing Schedule L accurately is important for compliance and maintaining trust with donors and the community. It also aids in keeping nonprofit operations transparent and accountable.
What is Schedule L used for?
Schedule L (Form 990) is used by nonprofits to disclose certain transactions with interested persons:
- to report loans made.
- to disclose compensation arrangements.
- to describe property transactions.
- to list business transactions.
How to fill out Schedule L?
- 1
Identify the organization’s interested persons, including board members and key employees.
- 2
Gather details about transactions that occurred, such as amounts and dates.
- 3
Complete the appropriate sections, providing clear descriptions for each transaction.
- 4
Ensure all figures are accurate, reflecting the organization’s financial records.
- 5
Review the form for completeness and consistency before filing.
- 6
Consult the IRS instructions for any specific requirements related to Schedule L (Form 990).
Who is required to fill out Schedule L (Form 990)?
Organizations such as nonprofit entities must complete Schedule L for reporting transactions. This includes disclosing financial dealings with interested persons to ensure transparency.
After completion, the IRS and the public can access this form to review the organization’s financial activities and compliance.
When is Schedule L not required?
Organizations do not need to file Schedule L if they do not engage in transactions with interested persons. This includes situations where there are no loans, leases, or other financial arrangements made with directors, officers, or key employees.
Additionally, small tax-exempt organizations with gross receipts below $200,000 and total assets under $500,000 are exempt from reporting these transactions on Schedule L.
When is Schedule L from Form 990 due?
The deadline for Schedule L is the 15th day of the 5th month after the end of your organization's tax year. For many organizations that operate on a calendar year, this means it is due on May 15.
If you need more time, you can request an extension by filing Form 8868. However, remember that this extension only gives you extra time to file, not to pay any taxes owed.
How to get a blank Schedule L?
To get a blank Schedule L, simply visit our platform where the form is pre-loaded and ready for you to fill. Once you complete the form, you can download it for your records.
Alternatively, the Internal Revenue Service (IRS) provides Schedule L for direct download from their website.
Do you need to sign Schedule L (Form 990)?
Schedule L, which covers transactions with interested persons, does not require a signature based on current guidelines. However, it's always wise to check the IRS website for the latest updates.
Where to file Schedule L?
Schedule L must be filed with the IRS alongside Form 990 or Form 990-EZ. This ensures compliance with reporting requirements.
You can submit Schedule L by mail or electronically through authorized e-file providers. Choose the option that best suits your organization’s needs.
