Celebrate my podcast birthday and enter to win an iPad mini!

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My podcast, the Dollars and Sense Show is a year old! Hard to believe that a year ago I started recording podcasts twice a month on a topic important to everyone: money!

The Dollars and Sense show is part of a larger network of podcasts by homeschoolers, for homeschoolers called the Ultimate Homeschool Radio Network.

For exactly one year, the Ultimate Homeschool Radio Network has been blessing homeschool families with fun, informative, and encouraging radio broadcasts every single week. All of our shows can be 1) played through the internet 2) downloaded to your computer or 3) subscribed to in iTunes as a podcast. Have you taken the time to listen to a show and find out what the Ultimate Homeschool Radio Network is all about?

As a newsletter subscriber for the Ultimate Homeschool Radio Network, you can get free audios sent to you every single week through email which makes it super easy to try listening. All of our shows are free!

As we celebrate our one year anniversary, several of the show hosts are joining together to offer a spectacular Anniversary Giveaway – you can win an iPad Mini!

Happy Birthday Ultimate Homeschool Radio Network! Win an iPad MINI from us!

iPad Mini Celebration Giveaway

A entire year of totally free podcasts that talk about every aspect of homeschooling, from planning, curriculum, money, marriage and more! We have an exciting line-up of shows and it is amazing to see the growth, especially over the last month! This is a thank you for all of you who are current listeners or those of you finding us for the first time – we began our network with a handful of show hosts and plan on growing! Each show host was carefully selected
and these shows are amazing!

Here is a snap shot of our current shows:UltimateHomeschoolRadioNetworkShowHosts_2014

And here is your chance to win an iPad Mini!

Rafflecopter GIVEAWAY

I hope one of you wins the iPad mini! If you do, let me know!

Carol Topp, CPA

HomeschoolCPA.com

 

Experienced Homeschoolers Offer Advice (podcast)

Carol Topp recently interviewed experienced homeschoolers at the HSLDA National Homeschool Leaders Conference. Listen to Carol’s lastest podcast as the leaders discussed:

  • Why they became a homeschool leader
  • What they wish they had known
  • What advice they have to offer you

Listen to the podcast

(I apologize for some of the poor audio! I’m improving, but I’m still learning about recording with lively background noise)

 

If you find this podcast helpful, please share it (below!) and leave a review on iTunes. (click on “View in iTunes” to leave a review)

How to leave a review on iTunes

Thank you!

Carol Topp, CPA

Tax Exempt Status for Homeschool Co-ops (video)

I presented as workshop called “Homeschool Co-ops Are Like Marriage: Know What You’re Getting Into” at the Midwest Homeschool Convention in Cincinnati this year.

This is Part 7 of 7 is titled “Tax Exempt Status for Homeschool Co-ops.”

I explain:

  • What tax exempt is and how to get it for your homeschool co-op!
  • Required IRS reports that every homeschool organization needs to file.
  • What to do if your group has not filed the required IRS forms.
  • Homeschool co-ops being under a church.

 

 

In the video I mentioned my books
Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out.
The IRS and Your Homeschool Organization
Money Management in a Homeschool Organization

Here’s a handout for the presentation.

More clips from this presentation can be found at HomeschoolCPA’s YouTube Channel.

 

Carol Topp, CPA

Will getting an EIN put us on the IRS radar?

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Usually the first contact a homeschool organization has with the IRS is getting an Employer Identification Number (EIN). Most banks now request an EIN when a group opens a checking account. One group in Virginia is doing things right by getting a checking account for their homeschool co-op instead of using a personal account, but they wonder if this will mean more contact with the IRS.

Hi Carol,
I am new to an existing homeschool co-op in VA. This co-op is more then 12-15 years old, we do not accept donations or need to, so far we have been handling the money through someone’s personal bank account, we receive fees from students and then pay teachers and reimburse them for materials, generally we break even each year (or can if we need to).

The bottom line is that we want to be able to have a business checking account.

Can we get an EIN in order to open a checking account in our co-op name without incorporating and without having a state or federal annual filing requirement? I seem to remember that once you get an EIN (that I think is required for a business bank account), you are on the radar screen with the IRS and will need to file some sort of return.
Thanks so much,
Nancy in VA

Nancy,

Yes, you need an EIN for banking purposes. It used to be that getting an EIN was the first and last time a small homeschool organizations had to deal with the IRS. But not anymore!

Since 2007, the IRS has required tax exempt organizations (like your homeschool co-op) to file an annual information return, Form 990/990EZ or 990N. Fortunately, for small organizations (under $50,000 annual gross revenues), the Form 990N, is a short online form that asks only 6 questions. Read more here: Form 990N FAQ

If you are paying teachers, then you have some reporting to the IRS and your state government. You will have to pay payroll tax (Social Security and Medicare) and file a W-2 if they are employees or file a 1099MISC if they are independent contractors. You should read this blog entry: Paying co-op teachers is a sticky issue

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Need help understanding tax exempt status or money management in your homeschool group?

Carol Topp’s books are written specifically for the homeschool leader.

 

Carol Topp, CPA

Nonprofit status for homeschool co-ops (video)

At the Midwest Homeschool Convention I presented as workshop called “Homeschool Co-ops Are Like Marriage: Know What You’re Getting Into”

This is Part 6 of 7 is titled “Nonprofit Status for Homeschool Co-ops.

I explain what it takes to be considered a nonprofit and that nonprofit status does not mean tax free (or tax exempt as the IRS calls it)!

In the video I mentioned my books
Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out.
The IRS and Your Homeschool Organization
Money Management in a Homeschool Organization

Here’s a handout for the presentation.

More clips from this presentation can be found at HomeschoolCPA’s YouTube Channel.

 

Carol Topp, CPA

Win an iPad mini! Dollars and Sense Show podcast is a year old!

I launched a  podcast Dollars and Sense Show  a year ago this month!

The podcast is part of a podcast network, The Ultimate Homeschool Radio Network, where you can find podcasts for homeschoolers by homeschoolers.

The The Ultimate Homeschool Radio Network turns a year old this month and you can win a birthday gift-an iPad mini!

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Enter here:

http://ultimateradioshow.com/giveaways/

You can also win a $25 gift card and other prizes. The celebration goes all the month of October.

Listen to my podcast Dollars and Sense Show. There are several episodes on starting or running a homeschool organization and I plan to have more shows to help homeschool leaders in the future.

If you like it, please leave a review on iTunes. Thanks!

 

Carol Topp

Scouts don’t allow individual fundraising account (and neither should you!)

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I am frequently asked questions about fundraisers for homeschool groups, especially about individual fundraising accounts.

What’s in Individual Fundraising Account?

An individual fundraising account is any method by which a nonprofit group credits an individual or family for some or all of the funds raised by that individual or family. Usually, credit is given for sales of products and services at the organization’s fundraising events.

Aren’t IFAs used by a lot of youth organizations?

These IFAs are very common, especially in scouting and  youth sports. In the past, youth organizations followed some simple guidelines  that they thought made the practice of creating IFAs acceptable. Here’s an example of an IFA policy.

I’m a conservative CPA and always discouraged the use of any IFAs. I’m not alone. ParentBooster.com strongly discourages IFAs and Trail Life USA  disallows IFAs for their members.

Boy Scouts discontinuing Individual Fundraising Accounts

And now it appears that the Boy Scouts USA has also changed their policy regarding IFAs. According to BobwhiteBather.com,

Source: http://bobwhiteblather.com/new-policy-prohibits-individual-scout-fundraising-accounts/

… the Boy Scouts of America is beginning to inform units that they may no longer allocate fundraising proceeds to “Scout accounts” for the private use of members to pay their expenses. This goes against a longstanding recommendation that units should use fundraising to allow individual Scouts to pay their own way. The new policy was first found buried in a publication aimed at councils on running effective product sales, which was released late last summer, and most recently appeared in Fiscal Policies and Procedures for BSA Unitsa summary of frequently-asked questions about unit finance.

 

FYI, the Boy Scout document cited above says quite clearly, “Funds raised by the unit from product sales belong to the unit. They may not be transferred to the Scout.”

So, my advice to homeschool organizations is unchanged:

  • Do NOT set up individual fundraising accounts.
  • If you have them now, STOP!
  • If you conduct fundraising, do not record how much each family brought in.
  • Do not have a system where tuition or dues are reduced by the amount of fundraising a family conducts.

You may find your organization can still function quite well, or even better without individual fundraising accounts like Becky’s homeschool group did.

Carol Topp, CPA

3 Tools for Running a Successful Homeschool Co-op (video)

Are you in a homeschool co-op or thinking about leading one? I have some advice for you! (I even write a book about homeschool co-ops!).

Here’s a video clip from my recent presentation of Homeschool Co-ops Are Like Marriage: Know What You’re Getting Into given at the Midwest Great Homeschool Convention in 2014.

Part 5 is titled 3 Tools for Running a Successful Homeschool Co-op.

In the video I mentioned my book Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out.

Here’s a handout for the presentation.

More clips from this presentation can be found at HomeschoolCPA’s YouTube Channel.

 

Carol Topp, CPA

IRS explains the need for an easy tax exempt application

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Did you know the IRS recently (July 1, 2014) released a new, shorter application for 501(c)(3) tax exempt status?

It’s great. I’ve helped about 3 organizations apply for tax exempt status using the new, online Form 1023-EZ and we love it!

TaxAnaylsts.com recently interviewed IRS Commissioner John Koskinen on several issues including the new Form 1023-EZ which will make applying for tax exempt status much easier for small organizations (gross revenues under $50,000 per year). That includes a lot of homeschool co-ops and other educational organizations!

Read the full interview here.

Here are some interesting excerpts (Mr Koskinen rambles a bit, so I did edit out some repetitions)

IRS reason for creating a shorter application form for small nonprofits

“Our existing problem is, it takes these organizations of any size, and certainly small ones, up to a year, over a year, to get approved. And I was concerned when I started and discovered we had a backlog of over 60,000. I was surprised that hadn’t become a bigger issue, because that is a big problem.

“It’s unfair to people who actually want to get through the process. It puts a lot of pressure on people. ..even if you’re going to have a small PTA or somebody, we’re going to give you the same fun-filled examination that Bill Gates has when he puts up his — it doesn’t make any sense. The risk to the public is much greater, and larger organizations are going to be much more complicated and allegedly doing more. And the benefit to the public is deprived by people not being able to get running and do things.

“…we’ve spent a lot of time designing that form to make sure we collect the information that we need.It will be for the first time, digital, online, so we can actually screen the applications and the answers, to pick up ones that we want to take a look at before we give approval to because we’ll know which answers are inconsistent, which ones raise questions, even though they answer them or are supposed to answer them in a way that allows you to get through without more review. So that we will have, for the first time, these applications as opposed to the old forms, we’ll be electronic and we’ll be able to screen them and analyze, as I say, of the 60,000, probably 45,000 are small. We’ll have a lot more control over the 45,000, by simply being able to screen them.

IRS plans to put some nonprofit  organizations through the process of the longer Form 1023

“The second thing we’re going to do, because in some ways it’s a pilot project, is we’re going to take a statistical sampling of the applications and put them through the more rigorous process, to see if they’ve answered the questions correctly, or whether they’ve, in fact, if they’d gone through the 26-page questionnaire, would have been not qualified, whereas that looks like they’re qualified. So we’ll actually do — I don’t know how many hundred we’ll do, but we’ll take a reasonable number of them at the front end and just put them through the process and see how accurate is the short form.  (my emphasis added)

The IRS will initiate a follow up to see if small charities are doing what they said they would do.

“We also are going to spend — take another statistical sample, once they’re out a year, and go out and audit how they’re doing and what are they doing. So they won’t be the same people we know are doing the right thing, because we’ve put them through the 26-page. There will be another set of people who we say, OK, this is what they said they were going to do. They filled out this form. What are they actually doing? And we’ll actually spend more time finding out what they’re actually doing than we do for a lot of them. You know, we have a million, six hundred thousand, 501(c) organizations out there up and running. (my emphasis added)

A more efficient IRS

“And so part of the theory is that (a) we’ll be much more efficient at the front end with the 80 percent of applications that are small, and be able to screen them out more effectively than we have, and we’re going to actually look at them at the front end and look at them a year later, and adjust accordingly.

The automatic revocation of tax exempt status created a need for a simpler reinstatement process.

“The bulk of the organizations are small ones. What happens with small ones is revealed. You know, the Congress passed a law that said if you didn’t file a [Form] 990 for three years, it got revoked. So we revoked 550,000. And 46,000 asked for reinstatement. …The bulk of what happens with these people, not surprisingly, is they start up and they are running whatever they’re doing and they don’t get a lot of funding or somebody decides to move and they just go away. And in fact, one of the advantages of that program — and then we got to streamline a way of getting people back in if they want to — has been, part of the problem, I’ve discovered, with the risk and the problem we have now, is that because it takes so long and costs so much, there’s a gray market in old 501(c)(3)s.

IRS hopes result is less risk to the public and more charitable work being done.

“So I think when you get done with it, as I say, we’re looking for the risks in trying to make sure that there is a problem that we’ll know. We’re also monitoring volume. You know, the theory was we’re going to go over everybody and his uncle who is now going to be a 501(c)(3). Thus far, the pace of applications is consistently the pace in the past. We’ve seen no uptick. But we’re monitoring that as well. But say, OK, are we now getting a lot more — suddenly everybody’s becoming more charitable, and they’ve got new organizations or not. And so we’ll find that.

But the net result is that there will be less risk to the public, that people are getting the benefit of tax exemption and contributions for what they’re doing because we will spend — have more resources available. We’ll be better at the front end, but we’ll have more resources available to check on people at the back end and see are you doing what you said you were going to do. Are you still doing the right thing? Now we’ll know.

One of the things we’re working on is how we can make better use of the 990s, which are, you know, self-reporting, but they give you some indication of where you are. But the real answer is you need to go out and write people notes and say hey, what are you up to, what are you doing, what’s going on? So I think the net result is we’ll have less risk to the public by better using our resources.”

So you made it to the end of reading all that! I’m impressed!

If you think your nonprofit organization is eligible for 501(c)(3) tax exempt status using the new shorter form, please contact me and we can discuss your situation.

Carol Topp, CPA

More homeschool organizations receive tax exempt status from the IRS

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Congratulations to two homeschool organizations that recently received tax exempt status with the IRS!

TACHE, the Tyler Area Christian Home Educators, is a homeschool co-op in Tyler, Texas

Homeschool Teen Serve is a charitable organization encouraging service projects performed by homeschool teenagers headquartered in Omaha, NE.

I was happy to help both these organizations receive 501(c)(3) tax exempt status for the IRS.

Do you know the pros and cons of 501(c)(3 status? Do you know what 501(c)(3) status could mean for your homeschool group?

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


This 120 page book explains the pros and cons of tax exempt 501(c)(3) status. Is it needed? Is it worth it?

Price: $9.95

Learn more here.

 

Carol Topp, CPA