Question

question 9

nonprofits qualifying as 501(c)(3) organizations in the united states are exempt from ______ and are required to file annual reports such as ______.

• franchise fees; form 941
• federal income tax; form 990
• state income tax; form w-2
• corporate taxes; form 1040

Explanation:

Analyze 501(c)(3) tax exemptions

Under United States tax law, organizations qualifying for 501(c)(3) status are exempt from federal income tax.

Identify annual reporting requirements

Most 501(c)(3) organizations are required to file an annual information return with the IRS, which is Form 990.

Evaluate the given options

• "franchise fees; Form 941": Form 941 is for employer's quarterly federal tax return, not annual nonprofit reporting.
• "federal income tax; Form 990": This correctly matches the exemption (federal income tax) and the annual reporting form (Form 990).
• "state income tax; Form W-2": Form W-2 is for individual wage and tax statements.
• "corporate taxes; Form 1040": Form 1040 is for individual income tax returns.

Answer:

• franchise fees; Form 941
• federal income tax; Form 990 (Correct answer)
• state income tax; Form W-2
• corporate taxes; Form 1040