What are the advantages of forming a nonprofit corporation?
If your nonprofit is granted tax-exempt status under 501(c)(3) of the tax code, your corporation will be exempt from payment of federal corporate income taxes. With federal income tax rates at between 15% to 34% this can amount to quite a tax savings. A 501(c)(3) nonprofit is eligible to receive both public and private grants. Individual donors can claim a federal income tax deduction of up to 50% of income for donations made to 501(c)(3) groups. Nonprofits also receive the same limited liability protection as for-profit companies. This means that directors or trustees, officers, and members are typically not personally responsible for the debts and liabilities of the corporation.
