Homeschool leaders summer reading: Money Management in a Homeschool Organization

 
This summer I’m encouraging homeschool leaders to take time to become a better leader by reading through my books. This week I’m featuring my book,

 

When I originally published this book in 2008, it was a short 40 page ebook and had a horrible cover.  I was still learning and self-publishing was brand new!
MoneyMgmtCover
An update was badly needed and I tackled that project in 2014. The book ballooned to 131 pages and I subtitled it “A Guide for Treasurers.” I feel like I poured my CPA brain into this book.

 

Cover Money Mgmt HS Org
 Topics covered in this book include:
Chapter 1: Your Treasurer is a Gem!
Chapter 2: Checking Accounts Done Right
Chapter 3: Super Simple Bookkeeping Basics
Chapter 4: Show Us Your Books! Regular Reporting on Financial Status
Chapter 5: Establish a Budget: You’ll Thank Me Later
Chapter 6: Get What’s Coming to You: Collecting Fees
Chapter 7: Do I Have to Report This? Reimbursement Policies and Avoiding Taxes
Chapter 8: Using Software to Stay Sane
Chapter 9: Fraud: It Couldn’t Happen to Us
Chapter 10: Need More Money? Easy Fundraisers for Homeschool Organizations
Chapter 11: Risky Business: Insurance for Homeschool Groups
Chapter 12: Paying Workers: Hiring Employees and Independent Contractors
Chapter 13: Homeschool For Profit: Running a Homeschool Group as a Business

 

 

 

Carol Topp, CPA

 

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An affordable, online homeschool conference you can watch at any time

 

I’ve attended a lot of homeschool conferences, and I love that, but you may not be able to attend a live conference.

So… I’m excited to be a part of the

2018 Homeschool Moms Conference (online)

Watch over 100 workshops from 60 dynamic speakers and veteran homeschoolers from the comfort of your home.

There are two tracks: one on general homeschooling and one on working from home with an emphasis on blogging.

I will be giving 3 sessions on the Work at Home/Blogging Track

  • Micro Business for Moms
  • Business Tips and Taxes for Bloggers
  • Blogging: Is It a Hobby, Business or Ministry?
Early bird registration ends on Monday morning June 4, 2018 at 7:59am EST.
Early bird pricing saves you $5 and for one track is $15, All-Access Pass (both tracks) is $25.
This is quite affordable. It’s less than $.50 per session for lifetime access.

The conference begins June 4, 2018 and closes June 10, 2018.

All attendees will receive lifetime access to all conference session videos. So register today and watch the sessions at any time!

I also learned that you’ll be able to interact with the presenters in an online chat box.

Carol Topp, CPA
HomechoolCPA.com
Please note that some of the links above are affiliate links, and at no additional cost to you, I will earn a commission if you decide to make a purchase after clicking through the link.

Summer reading to be a better homeschool leader: The IRS and Your Homeschool organization

Summer is a great time for homeschool leaders to catch up on some reading. I’m highlighting a book each week of summer and this week I’m spotlighting,

 

I know it’s not a catchy title, but it explains what the book is about. I have no expectations of this book ever being a best seller (!), but I wrote it to be helpful to the hundreds of homeschool organizations that need to understand tax exempt status.
This book began in 2008 under the title of  Tax Exempt 501c3 Status for Homeschool Organizations with a cover as boring as the title. It was an ebook with only 51 pages.
TEx501c3Cover
In 2011, I expanded the book to 124 pages and changed the title to The IRS and Your Homeschool Organization with the subtitle Tax Exempt 501c3 Status for Homeschool Organizations. And I improved the cover.

IRS and Your Homeschool Org cover

After the IRS simplified the process to apply for 501(c)(3) status in 2014, I updated the book. The second edition includes a chapter on getting tax exempt status reinstated if it is revoked. I also added an index to make finding specific topics easier.

 

Who should read this book?
  • Anyone running a homeschool organization that’s been around a long time but has never filed anything with the IRS.
  • Anyone who mistakenly thinks they don’t have to do any annual reports to the IRS.
  • Anyone who fears their previous leaders did not do things properly.
  • Anyone starting a new homeschool organization and wants to be sure they are set up properly.
 Carol Topp, CPA

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We’re bringing a homeschool conference to YOU!

 

One of the best thing you can do for you homeschool is attend a homeschool conference.
The encouragement, practical helps, and advice you receive are key to your success!

 

I’ve met many of you face-to-face at homeschool conferences, and I love that, but…
I can’t attend every conference and you may not be able to attend a live conference.
so…

 

We’re bringing a homeschool conference to YOU!

 

2018 Homeschool Moms Conference

Access over 100 workshops from 60 dynamic speakers and veteran homeschoolers from the comfort of your home.

There are two tracks: one on general homeschooling and one on working from home with an emphasis on blogging.

I will be giving 3 sessions on the Work at Home/Blogging Track

  • Micro Business for Moms
  • Business Tips and Taxes for Bloggers
  • Blogging: Is It a Hobby, Business or Ministry?
Early bird registration kicks off Monday 5/28/18 (TODAY) and ends on 6/4/18 at 7:59am EST.
Early bird pricing: 1 track $15, All-Access Pass (both tracks) $25.

 

The conference begins June 4, 2018 and closes June 10, 2018.

All attendees will receive lifetime access to all conference session videos. So register today and watch the sessions at any time!

Carol Topp, CPA
HomechoolCPA.com
Please note that some of the links above are affiliate links, and at no additional cost to you, I will earn a commission if you decide to make a purchase after clicking through the link.

Policies for Homeschool Co-ops

 

What types of policies should your homeschool co-op have?

How will having policies help you avoid burning out as you lead your group?

In this short podcast episode (12 minutes)  Carol Topp, the HomeschoolCPA, answers these questions and more from homeschool leaders. This podcast is an excerpt from a workshop titled Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out.

In the podcast Carol mentioned tax exempt status and the IRS required reporting, Form 990-N. Read more here

 

Featured resource

Phone Consultation with Carol Topp, CPA

Phone Consultation: A pre-arranged phone call to discuss your questions. My most popular service for homeschool leaders. It’s like having your own homeschool expert CPA on the phone!

Cost: $75/hour to nonprofit organizations.  $100/hour to for-profit businesses. $60 minimum.

Q &A by Email:  I am willing to answer questions by email, but it is very time consuming to read and reply to emails. I charge a reduced rate of $50/hour to read and reply to emails. Minimum $25.

Contact HomeschoolCPA, Carol Topp, CPA, to arrange a telephone consultation.

 

Carol Topp, CPA

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Aren’t Classical Conversations tutors just like online tutors?

I’m a Classical Conversations Director and I have a local CPA. I have a question about independent contractor status for tutors. The articles I read here seem to suggest we should treat tutors as employees. Yet, for several years I worked as a tutor for national online tutoring company as an independent contractor. I was given training, direct oversight, evaluations, worked for 5-10 hours a week, yet I was an independent contractor.

What is the difference with CC tutors in the eyes of the IRS? Just trying to understand!

Thanks, Allison

 

Allison,
Thank you for contacting me.

You seem to assume that your worker classification as an Independent Contractor as  a tutor for a national online tutoring company was the correct classification. I’m not convinced it was.

You only told me four bits of information about your relationship with the online tutoring company (?I was given training, direct oversight, evaluations, worked for 5-10 hours a week), yet three of those practices (training, evaluations, and oversight) would confirm your status should have been as an employee, not an Independent Contractor.

When I make a worker determination, I do not base my conclusions on what other companies have done or are doing. I base my conclusions on the IRS guidelines, tax court cases, IRS rulings, and the facts and circumstances of each case.

You asked, “What is the difference with CC tutors in the eyes of the IRS?” There may not be many differences in the online tutoring and tutoring for CC,  but I don’t assume that you were correctly treated as an IC when you did the online tutoring.

Classical Conversations offers an ebook I wrote, Taxes for Licensed Classical Conversations Directors, where I explain the options to CC Directors in how to pay tutors.  You can treat your tutors as Independent Contractors and in the ebook I explain the risks and consequences involved.

You might show portions of the ebook to your local CPA and get his/her opinion. If they determine your tutors are Independent Contractors, then your should request that they put their conclusion in writing and on their firm letterhead. A letter like that could possibly help you avoid IRS penalties if you are ever investigated by the IRS. But let’s hope you never need it!
If you have more questions, I would be happy to arrange a phone consultation with you. I charge $75/hour for a consultation with a nonprofit organization. We can discuss a lot of topics in an hour, but in particular your questions about paying your CC tutors.

Carol Topp, CPA

 

Insurance Questions for Homeschool Co-ops

 

Do you have questions about insurance for our homeschool co-op?

In this short podcast episode (10 minutes)  Carol Topp, the HomeschoolCPA, answers questions from homeschool leaders about insurance, waivers and using a church’s insurance coverage.

This podcast is an excerpt from a workshop titled Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out.

In the podcast Carol mentioned other podcast episodes in this series. Find them (#121-125) at HomeschoolCPA.com/Podcast

Carol’s article on Insurance for Homeschool Groups

Featured resource

Phone Consultation with Carol Topp, CPA

Phone Consultation: A pre-arranged phone call to discuss your questions. My most popular service for homeschool leaders. It’s like having your own homeschool expert CPA on the phone!

Cost: $75/hour to nonprofit organizations.  $100/hour to for-profit businesses. $60 minimum.

Q &A by Email:  I am willing to answer questions by email, but it is very time consuming to read and reply to emails. I charge a reduced rate of $50/hour to read and reply to emails. Minimum $25.

Contact HomeschoolCPA, Carol Topp, CPA, to arrange a telephone consultation.

Click Here to request more information!

Carol Topp, CPA

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My homeschool is a private school. Can I use 529 funds?

I explained in “Can homeschoolers use 529 plans? Maybe!” that you can use 529 savings account funds for tuition paid to a public, private, or religious school.

Some homeschool students take classes from private schools (locally or online). The tuition payments to these schools can use 529 funds without  penalty or taxes.

So that begs the question,

“In my state, my homeschool is considered a private school. So can I use 529 funds for my private school/homeschool expenses?”

No. Sorry!

Here’s why:

The expenses must be to pay tuition. You don’t pay yourself tuition! That would be silly and not tax-smart.

Your other homeschool expenses such as books, curriculum, school supplies, field trips and are not paymnets for tuition and so you cannot use 529 funds without paying a hefty penalty!

Tuition payments to organizations that are not schools like your local co-op, Classical Conversations, etc.  cannot use 529 funds either (without incurring taxes and a 10% penalty!)

Carol Topp, CPA

Boards, Bylaws and Budgets for Your Homeschool Co-op

 

Does your homeschool co-op have a budget?

When running your homeschool co-op, you should have a board, bylaws and a budget. In this short podcast episode (10 minutes), Carol Topp, CPA offers advice and tips on these important topics to running a successful group. This podcast is an excerpt from a workshop titled Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out.

 

 

In the podcast Carol mentioned other podcast episodes in this series. Find them (#121-125) at HomeschoolCPA.com/Podcast

 

Featured resource

Phone Consultation with Carol Topp, CPA

Phone Consultation: A pre-arranged phone call to discuss your questions. My most popular service for homeschool leaders. It’s like having your own homeschool expert CPA on the phone!

Cost: $75/hour to nonprofit organizations.  $100/hour to for-profit businesses. $60 minimum.

Q &A by Email:  I am willing to answer questions by email, but it is very time consuming to read and reply to emails. I charge a reduced rate of $50/hour to read and reply to emails. Minimum $25.

Contact HomeschoolCPA, Carol Topp, CPA, to arrange a telephone consultation.

Click Here to request more information!

Carol Topp, CPA

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Should my homeschool group tithe?

If we want to tithe on our income (from registration fees and donations) are there any restrictions, red tape, or regulations we should know about? Do you have advice or thoughts on tithing by a 501(c)(3) tax exempt organization?

Homeschool leader in Idaho

 

The only restrictions is that the purpose of recipient of your tithe must be in line with your exempt purposes (charitable, educational and religious for this particular group).

So you shouldn’t give any part of your tithe to a for-profit business or to a nonprofit whose mission is outside of your purpose as you indicated to the IRS when you applied for 501(c)(3) tax exempt status (say an animal shelter).

Most 501(c)(3)s do not tithe because they consider themselves as recipients or stewards of donations for their specific mission. But some organizations do tithe. My church, for example, budgets 13% of our income to missions. We consider that part of a tithe.

From a Biblical perspective, it’s unclear if nonprofits should tithe.

Here’s a blog post from a pro-life group LifeMatters Worldwide with food for thought:

Should your ministry give a portion of your budget to the Lord’s work? That sounds good, but isn’t 100 percent of your budget already dedicated to advancing the Kingdom to your particular target audience? If you believe that a nonprofit organization should give because God will bless you in a special way, why stop at 10 percent?

Your board should discuss these questions:

  • If you choose to tithe, where would you direct the funds?
  • Would you give to a church? That could be problematic.
  • Would you only give to other similar agencies? Donors who give to your nonprofit expect that 100 percent of their gift will be used to support your mission.
  • What if you choose an organization that your donors don’t believe in?
  • Would they quit supporting you if they knew that a portion of their gift ultimately supported another organization that they don’t like? Their reason for not liking the other organization doesn’t have to be doctrinal or philosophical. Maybe they don’t like the director, or maybe they simply aren’t interested in that particular cause.

The blog post writer concludes with this:

When a nonprofit decides to give to other nonprofits, in a sense they become mutual fund managers. You are deciding for your donors how to spend a portion of their gift that is not directly connected to your ministry. As a donor, I’m writing a check because I want to support the impact your organization is making. If I wanted to support the organization that you choose for me, I would give to them directly.

The biblical instructions about tithing and giving primarily apply to individuals. Business owners may choose to tithe their income, but a nonprofit ministry should not view giving from the same perspective.

There is one critical difference — nonprofit organizations don’t earn income, you are merely stewards of the gifts someone has entrusted to your care to accomplish your mission. When you look at nonprofit tithing from a donor’s perspective, it doesn’t make sense to give something away that isn’t really yours.

I think that will give your board something to discuss!

Carol Topp, CPA

 

Carol’s book Money Management in a Homeschool Organization  will help your homeschool organization create a budget and live by it!