Nonprofit year-end checklist: books, donors, grants and Form 990

The bank, card and payroll steps are the same as for any small business. What changes is the equity side: a nonprofit has no owners, so its net assets are tracked by whether a donor restricted them.

Net assets with donor restrictions are gifts the donor limited to a purpose or a period, such as a grant for one program or a pledge for next year. When the purpose is met or the time passes, you move the amount to net assets without restrictions and keep a short memo explaining why.

The documents are also spread wider. Grant letters sit with the executive director, pledges with development staff, and minutes with the board secretary.

A gift in kind is a donation of goods or services instead of cash, such as donated software or pro bono legal work. It is recorded at fair value, using the donor’s paperwork.

Start by tying contribution revenue in the books to the donor database total for the year. Differences are usually timing, pledges recorded in one system only, or gifts in kind that never reached the ledger.

Clear the processor and donation clearing accounts the same way you clear a card processor for a business. Gross gifts, less fees and refunds, should equal what reached the bank.

Donors need a written acknowledgment for any single contribution of $250 or more before they can claim the deduction (IRS Publication 1771, Charitable Contributions: Substantiation and Disclosure). When a donor pays more than $75 and gets goods or services back, such as a gala dinner, the charity must give a written disclosure statement (IRS Publication 1771, Charitable Contributions: Substantiation and Disclosure).

• Record pledges receivable from signed pledge documents.
• Record gifts in kind at fair value, with the donor’s paperwork.
• Check that each acknowledgment says whether goods or services were given.

Build one line per grant: the award letter, the amount received, the amount spent and what is left. List federal awards separately, because their total sets whether a single audit is due.

A single audit is the audit that federal rules require of an organization that spends a large amount of federal award money in one fiscal year. Under 2 CFR 200.501, the trigger is spending $1,000,000 or more in federal awards in the year (2 CFR 200.501, Audit requirements).

If your client is near that line, tell the board early. The audit preparation checklist lists the schedules an auditor will ask for.

Form 990 asks for expenses by function: program services, management and general, and fundraising (IRS, Instructions for Form 990). If the accounting system does not allocate expenses, any reasonable method of allocation can be used (IRS, Instructions for Form 990), so agree the method before year end.

The return also asks whether the organization had a written conflict of interest policy at year end (IRS, Instructions for Form 990). Collect the signed annual statements from board members while you are gathering minutes.

Small organizations may file a shorter return. Form 990-N is open to organizations whose gross receipts are normally $50,000 or less (IRS, Form 990-N (e-Postcard) for small exempt organizations).

A nonprofit with staff files the same wage forms as a business. For calendar 2026, Forms W-2 and W-3 are due by February 1, 2027 (IRS, General Instructions for Forms W-2 and W-3 (2026)).

Contractors, such as a grant writer or an event photographer, get Form 1099-NEC when paid $2,000 or more for tax years beginning after 2025 (IRS, Instructions for Forms 1099-MISC and 1099-NEC). Ask each one for a Form W-9 before the last payment of the year.

Finish with the board packet: the year-end statements, the grant schedule and the minutes that authorized the budget, major contracts and officer pay. Then set the lock date in the software once the auditor or reviewer has posted any adjustments.

• IRS Publication 1771, Charitable Contributions: Substantiation and Disclosure: Donors need a written acknowledgment for any single contribution of $250 or more; charities must give a disclosure statement for quid pro quo payments over $75.
• IRS, Return due dates for exempt organizations: annual return: Form 990 for a December 31 year is due May 15, extended to November 15; the table gives the dates for every other year end.
• IRS, Form 990-N (e-Postcard) for small exempt organizations: Small exempt organizations whose gross receipts are normally $50,000 or less can generally file Form 990-N.
• IRS, Instructions for Form 990: Part IX reports expenses as program services, management and general, and fundraising, allocated by any reasonable method; Part VI asks about a written conflict of interest policy.
• 2 CFR 200.501, Audit requirements: A non-Federal entity that expends $1,000,000 or more in Federal awards in its fiscal year must have a single or program-specific audit.
• IRS, General Instructions for Forms W-2 and W-3 (2026): 2026 Forms W-2 and W-3 are due to the SSA by February 1, 2027, on paper or electronically, and employees must get their W-2 by the same date.
• IRS, Instructions for Forms 1099-MISC and 1099-NEC: For tax years beginning after 2025 the reporting floor is $2,000; Form 1099-NEC is due January 31, Form 1099-MISC goes to recipients by January 31 and to the IRS by February 28 on paper or March 31 electronically, and a weekend date moves to the next business day. Payments to corporations are generally not reported, except attorneys’ fees and medical payments.