The basics of how to start a 501(c)(3) in Missouri include incorporating your organization and making sure you are following the rules for tax-exempt entities. For example, you will need to choose a suitable name for your corporation and list an appropriate purpose.

Introduction to Missouri Nonprofits

The main difference between a for-profit and nonprofit organization is the people in control of the company. Generally, nonprofit organizations are controlled by directors who volunteer for the role. These directors have the authority to fire and hire staff, and will also be able to guide the actions of paid staff. Establishing a nonprofit entity is much harder than starting a for-profit organization. This is because the organizers of a nonprofit must gather a large group of people, whereas it takes only a single person to form most for-profit entities.

The general rule is that if a company earns money, it is required to pay taxes. Although some organizations can earn money while avoiding taxes if they have a limited purpose, you should create your nonprofit with the idea that if you earn any money, taxes will follow.

Nonprofit organizations that want to be exempt from taxes at both the state and federal levels should apply for 501(c)(3) status. To be eligible for this status, your nonprofit must exist for a specific purpose:

  • Charitable
  • Educational
  • Literary
  • Religious
  • Scientific

Before you start your nonprofit, you should research your community to see if your entity is actually needed. For example, if there are already numerous organizations with a purpose similar to your own, the market may not be able to support your nonprofit. While it is legal for you to establish an unincorporated nonprofit entity, you will have a very tough time achieving exemption from taxes. In addition, unincorporated organizations will find it very difficult to access grant money.

Every nonprofit organization needs a vision statement, which is a description of why the organization exists. Vision statements are different than mission statements, which are a description of how the entity will fulfill its vision. When starting your 501(c)(3) organization in Missouri, there will be numerous statements that you must add to your bylaws.

Filing for 501(c)(3) Status

When filing for 501(c)(3) status, you must pay a filing fee. You can find the necessary application for this by visiting the IRS website and locating Form 8718.

Form 1023, which you must file to receive tax-exempt status, requests a variety of information about your entities:

  • The history of your organization.
  • Your entity's finances.
  • The structure of your nonprofit.
  • The policies governing your organization.
  • Activities and operations.

Because Form 1023 is so complicated, you should consult with an experienced attorney before completing this document. If you are applying for tax-exempt status for a small nonprofit, you may be able to file the much easier Form 1023-EZ. In addition to being significantly shorter than the standard Form 1023, Form 1023-EZ can be filed online, which speeds up the approval process.

To be eligible to use Form 1023-EZ, your nonprofit's annual gross receipts cannot be more than $50,000. Additionally, your organization cannot have more than $250,000 in assets. Missouri 501(c)(3) organizations are exempt from sales taxes and the use/grant sales tax.

Before your organization can fundraise, you may need to file a registration with the Missouri Attorney General. Whether or not you need to register will depend on the activities in which your organization engages. In the majority of states, nonprofits that pursue donations must complete an annual registration. Before you can solicit any donations, you need to complete this registration.

Depending on the size of your nonprofit, you may need to register in both your home state and in any other state where you are planning fundraising activities. Nonprofit entities that own property may need to file additional paperwork. The tax assessor in your jurisdiction should be able to provide you with the correct forms. If your nonprofit is planning a direct mailing campaign, you can mitigate your costs by applying for a bulk mail permit with the post office.

When e-filing your tax returns, keep the following information in mind:

  • If you have more than $25,000 in gross receipts, you should file Form 990.
  • Entities whose gross receipts are under $25,000 should file Form 990-N.
  • Missouri requires nonprofits to file an annual report.

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