I frequently advise homeschool co-ops to be careful how they pay teachers. I think it is best to treat paid teachers as employees or to have the parents in the co-op pay the teachers directly. In general I recommend homeschool co-ops avoid paying teachers as independent contractors from the co-op’s checking account.
See my other posts on the issue of paying teachers in a homeschool co-op
JoAnn from Texas told me recently how her co-op pays teachers. It’s a new twist that I like and I believe the IRS would approve also.
The teachers in JoAnn’s homeschool co-op invoice the co-op for their services.
The co-op collects all the money from the families and pays the teachers’ invoices, rent and other necessary expense. Each teacher creates a bill for the amount the co-op owes him or her for teaching. The co-op provides 1099MISC forms to any teacher paid over $600 annually.
This makes the role of the teachers as independent contractors, and not as an employees of the co-op, very clear. One of the hallmarks of independent contractors is that they bill for their services and do not receive hourly wages or a salary.
This might be a system your co-op could adopt. Thanks JoAnn for sharing your idea!
My ebook Paying Workers in a Homeschool Organization covers paying workers as employees or independent contractors. It includes sample forms, tips and advice to help you pay workers in accordance with the IRS laws to help your organization pay their workers correctly. Written specifically for homeschool organizations.
Available for immediate download as a pdf file
Carol Topp, CPA