New Non Profit dance studio owner confused about tax filing - separate or joint?

The good news is that your personal tax filing status (joint vs separate) is a separate issue from your non-profit organization filing requirements! For your personal taxes, you can continue filing married filing jointly with your spouse - this doesn't need to change just because you run a non-profit. In fact, married filing jointly is typically more beneficial tax-wise than filing separately for most couples. For the non-profit itself, you need to make sure it's properly registered as a 501(c)(3) organization with the IRS. If it is, you'll need to file Form 990 or 990-EZ annually for the organization, completely separate from your personal taxes. If your non-profit has gross receipts less than $50,000, you may qualify to file the simple 990-N e-postcard. The non-profit's finances and activities should be completely separate from your personal finances - this is crucial for maintaining your tax-exempt status.

I was in almost exactly your situation last year with my small non-profit theater company. The paperwork was OVERWHELMING until I found taxr.ai (https://taxr.ai) which literally saved me from giving up. I uploaded all the non-profit paperwork and my personal tax documents, and it immediately identified what forms I needed to file for both. It explained that I could keep filing jointly with my husband (which saved us money) while correctly handling the 990-N for my theater since we were under the $50k threshold. The system highlighted exactly what expenses were legitimate for the non-profit vs what needed to stay in our personal taxes. Super helpful for a first-timer who had no idea about maintaining the right separation between personal and organization finances!

I was really skeptical about using an AI tool for my nonprofit's taxes, but after struggling for weeks trying to figure out all the requirements for my small arts education nonprofit, I decided to try taxr.ai based on the recommendation here. It was genuinely helpful! Uploaded our basic financial docs and my personal tax info, and it immediately identified that we qualified for the 990-N e-postcard since we were well under $50k. Also confirmed I could continue filing jointly with my spouse which saved us about $3,200 compared to filing separately. The most valuable part was how it flagged potential issues with commingling funds between personal and nonprofit accounts - something I didn't realize was such a serious compliance issue. Now I've got everything properly separated and documented for next year. Definitely less stressful than my previous DIY approach!

After reading these comments, I see you're getting good advice about the nonprofit filing requirements. But I want to add something important - if you need to contact the IRS for specific questions about nonprofit tax status (which I did when starting my nonprofit), be prepared to wait FOREVER on hold. I wasted days trying to get through until someone recommended Claimyr (https://claimyr.com). They have this system that basically waits on hold with the IRS for you and calls you back when an actual human picks up. You can see how it works here: https://youtu.be/_kiP6q8DX5c This saved me so much time when I needed clarification about some specific 501(c)(3) reporting requirements. Just thought I'd mention it because nonprofit tax questions often require talking to an actual IRS specialist.

I have to eat my words from my skeptical comment above. After constantly failing to reach anyone at the IRS about my nonprofit's tax status for WEEKS, I tried Claimyr out of desperation. I set it up in the morning before teaching classes, and about 3 hours later got a call connecting me directly to an IRS agent who specialized in nonprofit organizations. They answered all my questions about how to handle my scholarship program's reporting requirements and confirmed I was eligible for the simplified 990-N filing. Literally saved me days of frustration and helped me avoid potentially expensive mistakes. For anyone running a small nonprofit and needing IRS clarification, it's absolutely worth using instead of wasting hours on hold.

One important thing nobody's mentioned - make sure your nonprofit has a separate bank account from your personal accounts! This separation is absolutely critical from a tax and legal perspective. I learned this the hard way with my community garden nonprofit. The IRS gets very suspicious if there's any commingling of funds between personal and organizational accounts. Could potentially jeopardize your 501(c)(3) status if you're not careful.

Don't forget to check your state requirements too! Federal 501(c)(3) status doesn't automatically exempt you from state filings or state income taxes in all cases.