What are the advantages of filing a nonprofit corporation?
Under 501(c)(3) of the Tax Code, if your nonprofit is granted tax-exempt status your corporation will be exempt from payment of federal corporate income taxes. Individual donors can claim a federal income tax deduction of up to 50% of income for donations made to 501(c)(3) groups. In addition, a nonprofit is eligible to receive both public and private grants. Nonprofits also receive the same liability protection as for profit companies, i.e., directors or trustees, officers and members are typically not personally responsible for the debts and liabilities of the corporation.
