See you in Cincinnati?
March 30, 2011
I’m looking forward to seeing some of you this Thursday, Friday, and Saturday, March 31-April 2, 2011 at the Midwest Homeschool Conference at the Duke Energy Center in Cincinnati, Ohio (my hometown!)
I’ll be doing two workshops this weekend. The one for leaders is a support group meeting for leaders. I will briefly discuss Homeschool Leader: Are You Burnt Out? and then we circle the chairs and just share our questions and support each other as leaders. (the picture is me in the blue shirt meeting with homeschool leaders in Memphis, TN at a convention)
Here’s the handout: Burnout Handout
This session is scheduled for Friday at 11:30 am in the MILLENNIUM
Hotel Pavilion room (you’ll have to walk to the hotel connected to
the convention center)
I am also leading a workshop on Saturday at 11:30 in the MILLENNIUM
Hotel Pavilion room on Micro Business for Teens. This is a great
class for your co-op to consider teaching.
Download a complete schedule of all the workshops offered or visit
the convention website.
http://www.cincinnatihomeschoolconvention.com
In my workshops, I always try to leave a little time for questions,
and you’re welcome to come back to Booth 1118 to ask more
questions, sit for a while, and see what resources I have for
homeschool leaders.
Hope to see some of you there!
Carol Topp, CPA
HomeschoolCPA.com
5 Ways a Homeschool Co-op Can Benefit Your Child
March 17, 2011
One of my workshops for the Ultimate Homeschool Expo 2011 is titled
5 Ways a Homeschool Co-op Can Benefit Your Child
Here’s the handout so you can follow along!
Want to learn more about the Ultimate Homeschool Expo, an on-line homeschool convention with 30 speakers and over 100 workshops?
The UHSE will be live the week of May 2-6, 2011, but until then every Thursday there are live workshops you can join for free.
If you can’t join us live, the workshops are recorded and you can listen on your computer or download to your mp3 player and listen at your leisure. I like to listen as I take my morning walk!
Tickets are $39.95, but on special for only $24.97 for a limited time.
Carol Topp, CPA
I love webinars:The Old Schoolhouse Expo Preshow
March 16, 2011
Last night I sat with my feet up, laptop on my lap and headphone logged in and attended the Old Schoolhouse Expo March Preshow program.
I “arrived” to the webinar a bit late and caught just the end of Terri Johnson talking about all the cool ways she uses her iPad in homeschooling.
But then I spent an enjoyable hour hearing how Malia Russell manages 5 children, 4 business and homeschooling! She’s my hero!
I had just met Mary Jo Tate in person last week at a homeschool convention, and so I really enjoyed hearing her story of raising and homeschool 4 sons as a single mom. Her focus on balance and goal setting was very inspiring.
All in all, it was such a nice way to spend the evening. The technology worked great. I could see the speakers’ PowerPoint slides and hear them clearly. I didn’t worry about background noise at my house because we were all muted. I could also follow the chat going on in a sidebar. It was a handy way for the host to post links and for participants to ask questions.
If you’ve never tried on on-line webinar, you’re in for a treat.
The Old Schoolhouse Expo will have another Preshow on April 12, 2011 and their full week long Expo May 16-20, 2012.
I’ll be doing a workshop on Micro Business for Teens. I have my Powerpoint slides all ready to go!
Join us by grabbing a ticket to the Expo here.
Carol Topp, CPA
Compare 501(c)(3) Charity to 501(c)(7) Social Club
March 16, 2011
The IRS offers more than a dozen different classifications of tax exempt status. The most popular by far with 80% of the total is the 501(c)(3) “Qualified charity status.”
Many homeschool organizations may qualify to be 501(c)(3) qualified charities with an educational purpose or 501(c)(7) Social Clubs.
Here’s a comparison of 501(c)(3) “qualified charity” status and 501(c)(7) Social Club.
In general, homeschool co-ops fall under 501(c)(3) “qualified charity” because they have an educational purpose, while homeschool support groups fall under 501(c)(7) Social Club.
| 501(c)(3) Qualified Charity | 501(c)(7) Social Club | |
| Purpose | Religious, Educational, Charitable, Scientific, Literary, | Pleasure, recreation, social activities |
| Examples | churches, charities, private schools, homeschool co-ops with an educational purpose | Fraternities, sororities, country clubs, hobby clubs, homeschool support groups |
| Requirements | No private inurement allowed. Upon dissolution all assets must be distributed to another 501(c)(3) organization. | Personal contact, fellowship and co-mingling of members. No private inurement allowed. |
| Activities | Can hold programs, sell services and products as part of their exempt purpose. | Can provide meals or services only to members in connection with club activities |
| Tax deductible donations allowed | Yes | No |
| Tax exempt (no taxes on profits) | Exempt from Federal income tax unless the organization has unrelated business income | Exempt from Federal income tax on income derived from members; other income taxed |
| Source of Income | Membership fees, fees for services, donations, fund raisers, program fees | Primarily (65% or more) from membership fees. |
| Membership | Open to public | Limited membership and consistent with the purpose of the club. |
| IRS Application Required? | Yes, if gross revenues over $5,000/year. File Form 1023 | No. The IRS does not require 501(c)(7) organizations to file an application. They can “self-proclaim” tax exempt status. |
| Annual IRS Reporting | Form 990N, Form 99EZ or Form 990 | Not required |
| Legislative Lobbying permitted? | Insubstantial lobbying allowed (less than 20% of total expenses). No endorsement of a candidate. | No limit on legislative activity as long as it furthers the exempt purpose |
I hope that helps!
Carol Topp, CPA
Are Homeschool Support Groups Automatically Tax Exempt?
March 11, 2011
I help homeschool groups file for tax exempt status with the IRS.
Most of them want 501(c)(3) status as a “qualified charity” because they have an educational purpose and desire tax deductible donations, tax -free profits and sometimes other perks that come with 501(c)(3) status.
But their is another type of tax exempt status that may apply to some homeschool organizations: 501(3)(7) Social Club.
This status allows an organization to be tax exempt (no taxes to pay on their profit), but they cannot offer a tax deduction for donations.
Here’s what it takes to be classified as a 501(c)(7) Social Club:
1. Purpose is for pleasure, social or recreation. A nonprofit motive and no part of the net earnings may inure to the benefit of any person having a personal and private interest in the activities of the organization
There must be an established membership of individuals, personal contacts and fellowship. A commingling of the members must play a major role in the life of the organization.
Common examples include college fraternities or sororities, country clubs, garden clubs, hobby clubs, etc.
2. Limited membership: membership is limited and consistent with the character of the club
3. Supported by membership fees. In general, your club should be supported solely by membership fees, dues, and assessments. A section 501(c)(7) organization can receive up to 35% of its gross receipts from sources outside of its membership without losing its tax-exempt status. For example, up to 35% of your total revenues can come from fund raising.
4. Business activities. If your club will engage in business, such as selling products or services, it generally will be denied exemption. However, your organization can provide meals, refreshments, or services related to its exempt purposes only to its own members or their dependents or guests.
5. Tax treatment of donations. Donations to exempt social and recreation clubs are not deductible as charitable contributions on the donor’s federal income tax return.
Sources:
http://www.irs.gov/pub/irs-tege/rr58-589.pdf
http://www.irs.gov/publications/p557/ch04.html#en_US_2010_publink1000200325
http://www.irs.gov/irm/part7/irm_07-025-007.html
These criteria might fit a homeschool support group. The members are limited to homeschool parents (or interested in homeschooling), meet for social reasons, are supported by membership fees (and maybe a little bit of fund raisers), do not sell products or services and do not collect tax deductible donations.
So most homeschool support groups can be considered 501(c)(7) Social Clubs.
Most homeschool co-ops do not fit this description because they sell services (classes) and have an educational purpose, not a social or recreational purpose. They may qualify for 501(c)(3) tax exempt status as an educational organization.
Confused about whether your organization is a 501(c)(3) “qualified charity” or 501(c)(7) Social Club?
This chart may help: Compare 501c3 to_501c7
Here’s the good news: If your organization fits the bill to be a 501(c)(7) Social Club, you do not have to do any of the IRS application filings like 501(c)(3) organizations must do. You are allowed to “self-proclaim” tax exempt status.
Carol Topp, CPA
Video: Homeschool and Taxes
March 10, 2011
The Homeschool Channel TV has a short video explaining tax breaks for homeschoolers.
You may need to register as a member of Homeschool Channel. It’s free and an excellent resource of videos for your family.
View Homeschool Channel TV: Homeschool and Taxes here
Jeremy and Steve discuss 501c3 charitable status.
I have an article on my blog that answers the question:
Can my family homeschool be a nonprofit charity?
Carol Topp, CPA