Do not call a fee discount a scholarship

Tricia from TX is helping her homeschool co-op apply for 501c3 tax exempt status with the IRS.

On the application form (Form 1023), the IRS asks about scholarships and Tricia asks:

 We do provide scholarships for our members that cannot pay their $30 membership fee.  Should we check “yes” for line 22?

Part VIII, Line 22 is for “real” scholarships like the kind a high school graduate is given to go to college.

What your group offers is a fee discount. I find that co-ops frequently call these fee discounts “scholarships.” That is the wrong word to use.

Do not call a fee discount a scholarship.

I recommend that you change your wording in your co-op and especially change the word on your application to the IRS.

I think you should check the box NO. You do not provide scholarships as the IRS is using the word.

Carol Topp, CPA

Another homeschool group awarded 501c3 tax exempt status!

 

Hi Carol,

 

We wanted to share our excitement in that Hartsville Home Educators, Inc. of Hartsville SC has been granted their 501(c)(3) status.

You have been a great help to our organization as we have developed by-laws and our co-op. We purchased your book and submitted our IRS application in May and was awarded our status in November.

Thanks for all you do for the home school organizations throughout the country.  We could not have done this without your guidance.

Terri King

Hartsville Home Educators

 

 

Do you know the pros and cons of 501c3 status?

Do you know what 501c3 status could mean for your homeschool group?

My book The IRS and Your Homeschool Organization could help your group as well.

A 120 page book explaining the pros and cons of tax exempt 501c3 status. Is it needed? Is it worth it?

 

Table of Contents
Sample pages

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What tax forms does a homeschool co-op teacher file?

Hi Carol.

Thank you for all the help you have already given our homeschool community!

There is a homeschool co-op that allows teachers to charge the parents $0-$45 per student.  As a teacher, how would I report any net income on my income tax return? (payments are made directly to the teacher).

Best regards,

Lynn (New York)

 

 

Lynn,

You report all your income and expenses on a Schedule C or the shorter form Schedule C-EZ as part of your federal form 1040.
The net amount is carried onto page one of your 1040 and added to your other income  from W-2s etc.

If you made more than $400 in net income in 2011, you will also have to fill in a Schedule SE and pay Self-employment tax (its Social Security and Medicare taxes for self-employed people).

Hope that helps!

Carol Topp, CPA

 

Homeschool leaders: If you hired and paid a teacher in 2011 you may need to filing some paperwork with the IRS! The deadline is January 31, 2012 to give your workers a 1099MISC or W-2.

Find out what to do in my ebook Paying Workers in a Homeschool Organization.

Only $3.00.

Can homeschoolers take the $250 educator tax credit?

Educator Tax Deduction for Homeschoolers?

The IRS gives a $250 tax deduction to educators for unreimbursed supplies they spend in the classroom.

 

Can homeschoolers take this deduction?

The IRS guidelines say to be an eligible educator:

“You work at least 900 hours a school year in a school that provides elementary or secondary education, as determined under state law.”

To work means to get paid for your work as a teacher-employee. Homeschool parents are not employees of a school. We do not get paid; we do not get a W-2. The IRS will check for a W-2 from a school if a taxpayer takes the Educator Expense deduction. Homeschoolers would not have a W-2 from a school, even if your state classifies your homeschool as a private school.

The Educator Expense Deduction was initiated by President Geo W. Bush. It expired with all the other Bush tax cuts,on December 31, 2011. It will not be available for 2012 unless renewed by Congress.

I do not recommend that homeschool parents take the Educators Expense deduction. Sorry.

Carol Topp, CPA

P.S. Here are my required “lawyer” words:
Internal Revenue Service Circular 230 Disclosure: Advice relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code or promoting, marketing or recommending to another party any transaction or matter addressed herein.

Did your homeschool group pay a worker in 2011?

 

Did your homeschool group pay any workers, administrators, or teachers in 2011?

 

Don’t forget the laws about reporting payments to employees or Independent Contractors!

 

Don’t know the laws?

 

Listen to my (free) podcast Paying Workers in a Homeschool Organization

or

purchase my ebook, Paying Workers in a Homeschool Organization

Now available in pdf or Kindle format.

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