What is a virtual CPA?

A virtual CPA provides the same services as a traditional CPA firm — tax preparation, bookkeeping, audits, financial planning — but delivers them remotely using secure cloud technology. You get expert-level service without visiting a physical office.

How much do virtual CPA services cost?

Pricing depends on the complexity of your financial situation and the services you need. We provide transparent fee estimates during your initial consultation. Virtual CPA firms typically have lower overhead than traditional firms, which translates to more competitive rates.

Do I need an audit for my nonprofit?

Many states require nonprofits to have an independent audit once they exceed certain revenue thresholds, often $500,000-$750,000. Grant-making organizations and government agencies frequently require audited financial statements. We can help determine your specific audit requirements.

What is the difference between an S-Corp and an LLC for tax purposes?

An LLC provides liability protection and pass-through taxation by default. An S-Corp election can provide additional tax savings by allowing owners to split income between salary (subject to payroll taxes) and distributions (not subject to payroll taxes). The right choice depends on your income level, business structure, and state tax laws.

What does a virtual CFO do?

A virtual CFO (fractional CFO) provides high-level financial strategy and oversight on a part-time basis — budgeting, forecasting, cash flow management, financial analysis, KPI reporting, and strategic financial planning. You get C-suite financial leadership without the full-time cost.

Can you help if I'm behind on bookkeeping or taxes?

Yes. We offer catch-up bookkeeping services to bring your books current and can help resolve back tax issues including IRS notices, unfiled returns, and payment plans.

What accounting software do you work with?

We work with QuickBooks Online, Xero, FreshBooks, Wave, and other major cloud accounting platforms. We can also help you select and set up the best software for your business.

How do I prepare for tax season?

Organize financial records throughout the year, keep receipts for business expenses, track mileage and home office usage, make quarterly estimated tax payments, and schedule a year-end tax planning session before December 31.

What is DCAA compliant accounting?

DCAA (Defense Contract Audit Agency) compliant accounting is a system that meets federal government requirements for contractors. It includes proper timekeeping, job cost accounting, indirect cost allocation, and specific internal controls required for government contract work.

Do I need a CPA or a bookkeeper?

Bookkeepers handle day-to-day recording of financial transactions. CPAs handle higher-level work — tax planning and preparation, audits, financial analysis, and strategic advice. Many businesses need both. Our firm provides both services so you have one team managing everything.

What's the difference between an audit, review, and compilation?

An audit provides the highest level of assurance through independent verification of financial statements. A review provides limited assurance through analytical procedures and inquiries. A compilation presents financial information in statement format without assurance. The right choice depends on your stakeholders' requirements.

Do you serve businesses outside the DMV area?

Yes. While our primary service area is Washington DC, Maryland, and Virginia, we serve clients nationwide through our 100% virtual model. Our cloud-based systems allow us to work with businesses anywhere in the United States.

Is Form 990 public record?

Yes. All Form 990s (except 990-N, the e-postcard) must be made publicly available upon request and are posted on the IRS Tax Exempt Organization Search website. ProPublica Nonprofit Explorer and Charity Navigator also host searchable 990 databases.

What is the difference between Form 990, 990-EZ, and 990-N?

Form 990 is required for organizations with gross receipts of $200,000 or more or total assets of $500,000 or more. Form 990-EZ applies when gross receipts are between $50,000 and $200,000. Form 990-N (the e-postcard) is for organizations with gross receipts under $50,000 and contains minimal financial information.

What is a good program expense ratio on a 990?

Generally, directing 65–75% or more of total expenses toward programs is considered good by watchdog organizations. Charity Navigator and GuideStar use this program efficiency ratio as a key metric. Administrative and fundraising costs above 35% of total expenses can raise donor concerns.

Can I see who donated to a nonprofit from their 990?

No. Schedule B lists contribution amounts from major donors (those giving more than 2% of total contributions or $5,000), but donor names and addresses are redacted from the publicly available copy. The IRS retains the full Schedule B with names, but it is not disclosed publicly.

What does it mean if a nonprofit hasn't filed a 990?

Organizations that fail to file a required 990 for three consecutive years automatically lose their federal tax-exempt status under the IRS Pension Protection Act rules. This is a serious red flag. Check the IRS Auto-Revocation List to see if an organization's exemption has been revoked.

How do I find red flags in a 990?

Look for: executive compensation disproportionate to the organization's budget size, declining program expense ratios year over year, insider transactions on Schedule L (loans to officers, excess benefit transactions), related party relationships on Schedule R, and large unexplained changes in net assets. Also check whether audited financial statements are attached.

Does our nonprofit need a CPA to prepare Form 990?

Not legally required, but highly recommended. The 990 is a public document that donors, grant makers, and journalists scrutinize. Errors or inconsistencies — even innocent ones — can trigger IRS examination, damage donor trust, or disqualify you from grants. Our CPAs prepare 990s for DC, Maryland, and Virginia nonprofits of all sizes.

What if I find an error in a filed 990?

File an amended return by checking the "Amended return" box at the top of a new Form 990 and correcting the errors. Material errors — particularly in financial data, executive compensation, or governance disclosures — should be corrected promptly. We recommend consulting a CPA before filing an amended 990.

Last Updated: May 2026

How to Read a Nonprofit Form 990

Form 990 is the IRS's window into any tax-exempt organization. Learn which sections reveal financial health, executive pay, and donor concentration — and what red flags to look for.

How do I read a nonprofit Form 990?

Form 990 is a public document filed by tax-exempt organizations with the IRS annually. To read it, start with Part I (summary of mission and financials), review Part VII (executive compensation), check Part VIII (revenue), Part IX (expenses), and look at Schedule B (major donors). It reveals financial health, leadership pay, and program spending.

Key Definitions

Form 990: The annual information return required of most tax-exempt organizations under IRC Section 501(c). It is a public document that discloses an organization's mission, program activities, finances, governance, and executive compensation. The IRS uses it to ensure continued compliance with tax-exempt status requirements.

Program Service Revenue: Income earned from activities directly related to the organization's tax-exempt purpose. For example, a nonprofit hospital earns program service revenue from patient care; a nonprofit university earns it from tuition. This is distinct from contributions, grants, or investment income.

6 Steps to Read a Form 990

1
Download the Form 990
Obtain the 990 from the IRS Tax Exempt Organization Search (apps.irs.gov/app/eos), ProPublica Nonprofit Explorer, or Charity Navigator. Most recently filed forms are available within 18 months of filing.
2
Read Part I for the financial summary
Part I provides a one-page overview: total revenue, expenses, net assets, and a summary of the mission. This is the fastest way to assess whether the organization is growing, stable, or in decline.
3
Check Part VII for executive compensation
Part VII lists every officer, director, and key employee earning more than $100,000, along with their total compensation. Compare salaries to the organization's total budget to assess proportionality.
4
Analyze revenue breakdown in Part VIII
Part VIII shows all revenue sources: contributions, grants, program service revenue, investment income, and other sources. A healthy nonprofit typically has diversified revenue streams rather than dependence on a single source.
5
Calculate the program expense ratio from Part IX
Divide program service expenses by total expenses. The result should be 65% or higher. This is the single most-cited efficiency metric by grant makers and watchdog organizations.
6
Review Schedule L for insider transactions
Schedule L discloses loans to or from officers, directors, or key employees; excess benefit transactions; and grants to interested persons. Any entries here warrant closer scrutiny — they may indicate governance problems.

Form 990 Section-by-Section Guide

Feature	What It Shows	Why It Matters
Part I — Summary	Mission, revenue, expenses, assets overview	Quick financial health snapshot
Part III — Program Service Accomplishments	Description of programs and outcomes	Proves org is fulfilling its mission
Part VII — Compensation	Officer, director, key employee pay	Largest donors and media scrutinize this
Part VIII — Revenue	All revenue broken down by type	See if org is over-reliant on one source
Part IX — Expenses	Program, management, fundraising expenses	Program ratio reveals efficiency
Schedule B — Donors	Major contributors (amounts only, names private)	Donor concentration risk
Schedule O — Explanations	Supplemental answers to key questions	Policy explanations and disclosures

How to Calculate the Program Expense Ratio

The program expense ratio is the single most important efficiency metric on a 990. Calculate it from Part IX:

Program Service Expenses (Line 25, Column B) ÷ Total Expenses (Line 25, Column A)

Below 65%

Concerning — high overhead relative to mission work

65–74%

Acceptable — Charity Navigator "meets standards"

75%+

Strong — most grant makers prefer this range

Red Flags to Look for in a 990

●Executive compensation that exceeds 10–15% of total budget for smaller organizations
●Declining program expense ratio over three or more consecutive years
●Schedule L entries showing loans to officers or excess benefit transactions
●No independent audit attached despite large revenue (over $500K)
●Significant related-party transactions on Schedule R without clear rationale
●Net asset balance declining while revenue remains stable (possible hidden losses)
●No policies on conflict of interest, whistleblower, or document retention (Part VI)

Need Help Preparing or Reviewing Your 990?

Our CPAs prepare Form 990 for nonprofits throughout DC, Maryland, and Virginia. We ensure accuracy, optimize your program expense ratio presentation, and flag governance issues before they become problems.

Frequently Asked Questions

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Questions About Your Nonprofit's 990?

Our virtual CPA team serves nonprofits across DC, Maryland, and Virginia — from 990 preparation to full audit support. Schedule a free consultation today.