Schedule B (Form 990) - Jan 2023

Tips for organizing your Schedule B (Form 990) information

Filing Schedule B is easier when your contributor records are organized before you start. Many nonprofits run into problems not because the form is complicated but because their donation records are scattered across spreadsheets, bank statements and email receipts. A little preparation saves hours of work at filing time.These tips walk you through how to get your records in order so completing Schedule B goes smoothly.

Know which contributions to track

Before you start organizing, you need to understand what Schedule B actually requires. The form reports contributors who gave $5,000 or more during your tax year. If your organization's total contributions exceed $5,000, you can use an alternative test and only report donors who gave more than 2% of that total.

Start by pulling a list of all donors for the tax year. Sort it by total contribution amount, highest to lowest. This immediately shows you which donors cross the reporting threshold and need to appear on your Schedule B.

Keep contributor records in one place

Gathering donor information from multiple systems is one of the biggest time drains at filing time. Contribution details often live in different places like your CRM, your bank account, your email and sometimes in paper files.

Set up a single tracking document or spreadsheet early in the year with columns for:

• Contributor name and mailing address
• Date of each contribution
• Amount of each contribution
• Type (cash, check, electronic transfer or noncash)
• Running total for the year

Update this tracker as donations come in rather than reconstructing everything at year-end. If your organization uses donor management software, make sure it can export the fields Schedule B requires.

Separate cash and noncash donations

Schedule B treats cash and noncash contributions differently, so your records should too. Cash contributions, including checks, wire transfers and credit card payments, are straightforward. You just need the amount and the donor's information.

Noncash contributions need more documentation. For any single noncash gift over $25,000, the IRS wants a description of the property and an explanation of how you determined its fair market value. Common noncash donations include stocks, real estate, vehicles and auction items.

Keep a separate file or tab for noncash gifts that includes:

• A description of the donated property
• The date you received it
• Your valuation method and the fair market value you assigned
• Any appraisals or third-party valuations you obtained

Having this information organized separately makes it much faster to complete Part II of Schedule B, which is dedicated to noncash contributions.

Review donor totals before filing

Small errors in contribution totals are one of the most common problems with Schedule B filings. A donor who gave multiple gifts throughout the year might appear to be under the $5,000 threshold if one contribution was recorded late or entered in the wrong period.

Run through these checks before you start filling out the form:

• Reconcile against bank deposits. Match your donor records to actual deposits to catch any contributions that were received but not logged.
• Watch for duplicate entries. A donor who gave by check and then also by credit card might show up twice in your system under slightly different names.
• Confirm the tax year dates. Contributions count based on when you received them, not when the donor sent them. A check dated December 30 but deposited January 3 falls in the new tax year.
• Verify noncash valuations. Make sure the fair market values you recorded for property donations are supported by a reasonable method and documented.

Understand what stays confidential

A common concern for nonprofits is whether donor names on Schedule B become public. For most organizations, the answer is no. Schedule B is not open to public inspection except for 501(c)(3) charities and Section 527 political organizations.

If your organization is a social welfare group, trade association or other type of exempt entity, your donor information stays between you and the IRS. Even for 501(c)(3) organizations whose Schedule B is technically public, the IRS has specific redaction rules. Understanding these rules upfront helps you reassure donors who have concerns about privacy.

Save copies of all supporting documents

Your Schedule B filing is only as strong as the records behind it. If the IRS follows up with questions or if your return is selected for review, you need documentation that supports every number on the form.

Keep organized copies of these records for at least three years after filing:

• Donor acknowledgment letters for contributions of $250 or more
• Bank statements showing deposit dates and amounts
• Appraisals or valuation reports for noncash gifts over $5,000
• Board minutes or gift acceptance policies for unusual donations
• The completed Schedule B and the Form 990 it was attached to

Store digital and physical copies in a clearly labeled filing system. If your organization ever faces an audit or needs to verify a donor's contribution for their own tax purposes, you will be able to respond quickly.

File your Schedule B (Form 990) today

Need to file Schedule B (Form 990)? Our free template makes it easy to get started. Use our fillable form to report contributor information accurately, complete required filing details and create an IRS-ready document in minutes.