Paying Workers in a Homeschool Organization Part 2 podcast

DollarsSenseShow18

Do you pay workers in your homeschool organization?

Do you know what form to to filing with the IRS?

Homeschool CPA, Carol Topp, will share the details of what you need to know about paying workers in a homeschool organization in this 30 minute podcast. Part 2 of a 2 part series.

Listen to the podcast

 

Show Notes:

Applying for EIN. Use IRS Form SS-4. Read this helpful article first Getting an EIN from the IRS.

IRS forms to give to independent contractors (IC).

  • Use IRS Form W-9 to collect the IC’s legal name and EIN.
  • Read IRS Pub 15A Employers Supplemental Tax Guide.
  • Give Form 1099MISC to every IC paid more than $600 in a calendar year. Unfortunately Form 1099MISC cannot be printed on your home printer. You must order it from the ITS or buy a set at an office supply store. I use FileTaxes.com to file and mail Form 1099MISC.

IRS forms to give to employees

  • Collect a W-4 and an I-9 (Immigration) from each employee. Get employment forms at IRS.gov
  • Read IRS Pub 15 Employers Tax Guide
  • Give each employee a W-2 at the end of the year. (I use FileTaxes.com to file and mail the W-2′s to the employees)
  • Form 941 or 944 to pay your employer taxes (Social Security and Medicare). Find employment forms at IRS.gov.  I use FileTaxes.com to prepare and file 941/944 or fill in online print and mail.

What to do if you are paid by homeschool organization an receive a 1099MISC

  • File Schedule C Profit or Loss from Business of the Form 1040. List all your income and expenses from being a independent contractor.
  • Pay federal income tax and  self-employment tax (same as Social Security and Medicare for self-employed people) using Schedule SE (attached to your Form 1040.

If you find these forms confusing, consider a private consultation with Carol Topp, the Homeschool CPA. She can help you prepare and file the correct forms.
Carol mentioned a few helpful resources:

Cover Money Mgmt HS Org

Paying Workers in a Homeschool Organization (short ebook)

Questions and Answers for Homeschool Leaders (ebook)

Money Management in a Homeschool Organization (newly expanded) in paperback or ebook. The Paying Workers ebook is incorporated as a chapter in this book, so you don’t need to purchase both.

Other helpful books and articles for homeschool leaders can be found at HomeschoolCPA.com

 

Be sure to listen to the first part of this podcast (Episode #17) where Carol explains the difference between employees and independent contractors.

How do you find a location for your homeschool co-op?

photo credit: http://www.mcgannconstruction.com/

 

I love the Facebook group I am a homeschool group leader. It’s like as support group for homeschool leaders.

Recently Kate asked,

How do you go about finding a location for your co-op? The church we had in mind wants us to rent the space (about $8000 for the ten month school year) which is not cost effective.

Here are some of the replies she received:

  • Municipal recreation centers
  • Try other churches
  • Public libraries
  • Vets halls, VFW Halls, American Legion Halls
  • Homeowner clubhouses
  • Boys & Girls clubs.  More than one leader commented that their local Boys and Girls Clubs were used by homeschool co-op during the day.
  • Places that offer after school programming. Lots of times they are empty during the day.
  • Public parks with buildings.

What a great list of ideas! I’d never thought of some of them.

Where does your co-op met?

Should my homeschool nonprofit corporation have members?

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Carol,

I’m filling out the paperwork for my homeschool co-op to be a nonprofit corporation in my state. They ask “Does your organization have members?” We have families that pay for co-op classes and we call them members. Is this what the form is asking?

Joann in IN

Joann,

The state is asking about members of your corporation, not what you call members who participate in your homeschool co-op classes.

Here’s a helpful explanation from Nolo.com

Although a nonprofit corporation can choose to have members who have voting rights, many nonprofit corporations decide not to adopt a membership structure and, in the interests of efficiency, leave the decision making up to the directors. If a nonprofit does opt for a membership structure, the members participate in major corporate decisions. Specifically, the members have the exclusive right to elect directors, amend articles and bylaws, and vote on a merger or dissolution of the corporation.

I have found that most homeschool co-ops are run by a board and do not have members participate in decision making or vote on anything.

One homeschool group incorrectly checked the box on their nonprofit corporation application stating they had members. Later, they needed to amend their Articles of Incorporation  when applying for 501c3 tax exempt status with the IRS. This meant they had to gather the members together for a vote to amend the Articles. This was not easy because co-op classes had ended for the summer and the members no longer gathered together. It also involved explaining complicated IRS language to a group of people who didn’t really care, gathering ballots for votes, etc.

So be careful about what you are agreeing to when you check the box stating your nonprofit homeschool corporation has members.

Carol Topp, CPA

 

Paying Workers in a Homeschool Organization Part 1 podcast

DollarsSenseShow17

Do you pay workers in your homeschool organization?

Are they employees or independent contractors? Do you know the difference?

Homeschool CPA, Carol Topp, will share the details of what you need to know about paying workers in a homeschool organization in this 30 minute podcast. Part 1 of a 2 part series.

Listen to the podcast here.

Carol mentioned a few helpful resources:

Cover Money Mgmt HS Org

Paying Workers in a Homeschool Organization (short ebook)

Questions and Answers for Homeschool Leaders (ebook)

Money Management in a Homeschool Organization (newly expanded) in paperback or ebook. The Paying Workers ebook is incorporated as a chapter in this book, so you don’t need to purchase both.

 

 

Be sure to listen to the second part of this podcast when Carol shares what forms you need to be filing with the IRS when you pay workers.

IRS Proposes Form 1023-EZ

Form1023EZ

The IRS is proposing a Form 1023-EZ to make applying for tax exempt status a bit easier.

See the proposed Form 1023-EZ

The instructions for the proposed form state that it can only be used by organizations that expect to be relatively small with no more than $200,000 in annual gross receipts and no more than $500,000 in total assets and are not churches, schools, hospitals, supporting organizations. There are other restrictions on who can use the Form 1023-EZ. See the checklist for eligibility here. Scroll down to page 33 and 34.

That describes almost all of the homeschool organizations I know.

This Form 1023-EZ could be a huge help to small homeschool organizations that need to file the Form 1023 to apply for tax exempt status or by organizations that had their tax exempt status revoked for failing to file the Form 990N for 3 consecutive years.

The Form 1023-EZ is not quite ready yet, but I’ll announce it here and on my Facebook page when it is ready. You can sign up for my email list on the sidebar to the right and will get notification that the Form 1023-EZ is ready (and a lot of other helpful information!)

Carol Topp, CPA

 

 

Lost your tax exept status? I can help.

Did your nonprofit organization lose your tax exempt status?

What’s this all about?

In 2010, the IRS has begun revoking the tax-exempt status nonprofit organizations that failed to file a Form 990/990EZ or 990N for three years.

A large number of these organizations are small nonprofits that were not required to file an annual Form 990 because their gross revenues were $50,000 or less  and didn’t know about the new IRS requirement.

If your organization has not filed any of the 990/990EZ/990N forms for three years, it is likely your tax exempt status was revoked.

How will I know if my organization has lost its tax-exempt status?

The IRS may have sent a letter . If not, read more here…

OK, I think our tax exempt status was revoked! Now what?

Don’t panic. The IRS has a procedure to get your tax exempt status reinstated. It involves paperwork (the IRS loves paper) and filing fees of $400 or $850.

Here’s a flowchart I designed to explain the IRS procedure in pictures.

We need help getting through this!

I can help. I offer a phone consultation with your board or leaders to discuss where you are, what options your have what it will cost to get your tax exempt status reinstated. Contact me to set up a phone call.

It’s helpful to me if you fill in this questionnaire.

What will this cost me?

My fees for reinstating tax exempt status are:

Consultation on eligibility for IRS streamlined reinstatement and Form 1023EZ (organizations with annual gross income of $200,000 or less may be eligible for Form 1023EZ): Includes verifying your organizing documents fulfill the IRS requirements and required IRS statements: $60 per hour. Estimate 2-3 hours.

Prepare Form 1023: Includes verifying your organizing documents fulfill the IRS requirements and required IRS statements: $600

Prior Year(s) Form 990EZ Annual Information Return:
Annual gross income under $50,000: $100 per return
Annual gross income more than $50,000: $250 per return

 

Carol Topp, CPA

 

 

Happy 10th Birthday HomeschoolCPA!

Happy10 HSCPA

In May  2004, I attended a meeting of homeschool group leaders and learned they were terribly confused about their status as nonprofit organizations, money and the IRS.

I wrote a three page letter to one of the leaders trying to clear her confusion. That letter turned into several articles and I launched a website called HomeschoolCPA.com in 2006. It’s grown to over 300 blog posts, 600 subscribers and dozens of articles

I went on to write books and started speaking at homeschool conventions. I’ve written 5 books for homeschool leaders and visited 10 states talking to homeschool leaders.

I try to serve as an ambassador to homeschool leaders interpreting IRS regulations to them. I even named my self-publishing company Ambassador Publishing.

I have my work cut out for me, don’t I?

So Happy 10th Birthday to HomeschoolCPA!

 

Carol Topp, CPA

Streamlined tax exempt reinstatement in pictures

 

Lots of small homeschool nonprofits find themselves in a awkward situation.

Their tax exempt status was revoked by the IRS and they didn’t even know it! Now they wonder how they can get tax exempt status back.

The IRS recently introduced a “streamlined” process to get tax exempt status reinstated. It’s all explained in IRS Rev Proc 2014-11 if you like reading IRS documents!

What the IRS calls “streamlined” means they went from a snail’s pace to a turtle’s pace! This new procedure still involves a lot of paperwork (the IRS loves paper) and paying an application fee. It may also include back filing the Form 990 Information returns you failed to file.

I created a flowchart to explain the process in pictures. I hope it helps.

RevProc_2014-11flowchart page 1 Download page 1  of the IRS Rev Proc 2014-11 Streamlined Reinstatement Process as a pdf document

 

RevProc_2014-11flowchart page 2Download Page 2 of the IRS Rev Proc 2014-11 Streamlined Reinstatement Process as a pdf document

 

If you have any questions about getting your homeschool organizations tax exempt status reinstated, please contact me. Carol Topp, CPA. We can set up a phone consultation to see where you are and what the best option is for your organization.

Carol Topp, CPA

Please give your comments to the IRS on a shorter application for tax exempt status

 

IMG_0244The IRS is considering offering a shorter application form to apply for tax exempt status. The current form, Form 1023, is 25 pages long and the IRS estimates it can take up to 101 hours to complete. They are proposing a 1023-EZ which would be only 2 pages long and take only 14 hours to complete!

Now that’s a step in the right direction! Atta boy, IRS!

See the new Form 1023-EZ (draft)

See the accompanying instructions for Form 1023-EZ

If you have filled out the lengthy Form 1023, or had me prepare it for you, I think you should give the IRS your opinion on a shorter version.

Offer your comments via an email to these emails: OIRA_Submission@OMB.EOP.gov and PRA@treasury.gov

More information here

The comments are open until April 30, 2014.

I’ve looked at it and so far, I’m all for it! A From 1023-EZ would greatly reduce the burden on almost 90% of the homeschool organizations that I help.

My comments on Proposed  Form 1023-EZ 

(Feel free to copy some of my comments if they apply to your opinion. Please include a personal example how how long the Form 1023 took you to prepare.)

A simpler form would save you time, money and frustration. It would mean you could get back to what you want to do: run your homeschool co-op and not fill out IRS forms!

Carol Topp, CPA

More Money Myths Homeschool Moms Believe. Dollars and Sense Show #14

DollarsSenseShow#14

In this episode of the Dollars and Sense Show host Carol Topp and her guest Susan Raber of AtHomeAndSchool.com discuss more money myths that homeschool moms believe.

Listen to the show here
From Episode #13 of the Dollars and Sense Show, Carol and Susan discussed three money myths:

Myth #1: Just a Little More Money is All I Need…

Myth # 2:  I Need …..

Myth # 3:  It was on sale; I saved a lot of money!

On today’s show, Carol And Susan discuss two more money myths.

Myth # 4: Homeschooling is Expensive:

A study of 220 families spend between $300 and $1,000 per family each year. Private schools cost from $3,000-$10,000 year.  That’s expensive!

Truth:  Homeschooling is time consuming.

“Opportunity cost” is the cost of passing up a choice when making a decision.

Money tip:  Make up a homeschool budget.  Include books, field trips, classes, magazine subscriptions.

 

Myth # 5: I’ll use it someday

Truth:  You don’t know what the future holds

Ask yourself:

  1. Am I going to use it now or in the near future? Beware of buying things with the reasoning, ‘I’m not sure when I’ll use it, but I’ll use it someday.’  Tell yourself, “If it’s that good, it will be there when I need it.  If not, something better will replace it”
  2. Where is it going to go?  Make sure you have a clearly designated space otherwise it increases your clutter.

 

We hope you’ve enjoyed these Five Money Myths and remember them as we enter the homeschool convention shopping season!

 

Tune in for the next Dollars and Sense show on April 24, 2014 when Carol will start a series on tips for teenagers or parents wanting to start a micro business.