The Math of Gross Receipts

Sound confusing? Hold on.

Say your organization’s gross receipts were $30,000 in 2005, $26,000 in 2006, and $20,000 in 2007.

The total of your gross receipts for those years is $76,000. The average over the three years comes out to $25,333 per year.

So, for 2007, your organization would have to file a Form 990 or 990-EZ, because the average of the gross receipts for that year plus the previous two years is greater than $25,000.

And remember, even if the three-year average had worked out to be $25,000 or less, your organization should still submit an electronic Form 990-N, beginning in 2008.