Using QuickBooks Online for small nonprofits & churches

 

Here are some helpful books written by Lisa London, CPA from The Accountant Beside You, if you are using QuickBooks in your homeschool nonprofit organization.

Using QuickBooks Online for Small Nonprofits & Churches

is for users of QuickBooks Online. I recommend  QuickBooks online so that several people can log into the record keeping system including a bookkeeper, board members, the Treasurer and an outside accountant. i wish all my larger homeschool clients would use QuickBooks online.

http://accountantbesideyou.com/using-qbo-for-small-nonprofits-churches/

 

 

If you use the desktop version of QuickBooks, there’s a different book for you.

Using QuickBooks For Nonprofit Organizations, Associations & Clubs

http://accountantbesideyou.com/using-quickbooks-for-nonprofit-organizations-associations-clubs-paperback/

 

Lisa London, CPA from The Accountant Beside You, also offers classes on QuickBooks which some people prefer to reading books.

Carol Topp, CPA

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Q&A: Adding another program under your homeschool group’s umbrella

Super Bowl LII is over. Did your team win? Perhaps your homeschool group is considering adding football team.

Tricia, a treasurer if a homeschool program in Texas asked questions here and here about adding a football program. The homeschool group has 501(c)(3) status with the IRS.

She had several questions about tax exempt status and financial oversight.

  1.  What steps with the IRS do we need to follow to bring them under our homeschool group’s tax exempt umbrella?
  2. What forms would we need to file?
  3. Would they share our tax ID number or would they need their own?  What are concerns should we consider in doing this?
  4. The benefits to our members are obvious, but we don’t want to overlook concerns if there are any.  They would handle their own bank account, but how much would we need to manage?

 

Tricia,

I read your 501(c)(3) tax exempt application given to the IRS and see that sports teams was part of your mission. That’s good, because you do not have to approach the IRS and ask for permission to add the football program; it was included in your original tax exempt application.

Here are my answers to your questions:

1. When you file your 990 or 990-EZ Annual Information Return with the IRS, you simply list the football program as one of your programs. If your gross revenues are under $50,000 per year, you’ll file the simple Form 990-N and no explanation is required.

2. There are no additional forms to file beyond the annual Form 990/990-EZ or 990-N. That’s because sports teams was part of your mission in your original tax exempt application.

3. Use your main group’s EIN (tax ID number). The football program is just another activity run by the main group, so you should expect the typical concerns such as: Are they following policies, being careful, keeping good financial records and practices, etc? My book Money Management in a Homeschool Organization can help in this area.

4. Your main organization should have oversight of the football program’s bank balances. This includes allowing you, as the main group’s treasurer, access to their bank account online and require they give you a monthly bank reconciliation report and monthly reports of the income and expenses.

This may be a lot of extra work for you as a volunteer treasurer, so you may need to hire a bookkeeper or recruit more help from volunteers.

Tricia asked her questions by email. I can do that  for your homeschool program, 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. Or perhaps a phone call would be better. Contact me to arrange a private phone consultation.

Carol Topp, CPA

 

Money Tips for Homeschool Leaders: Don’t Ignore Your Balance Sheet

 

Do you know what a Balance Sheet is?

Homeschool board members don’t understand a balance sheet, so it is often ignored, but Carol Topp, the HomeschoolCPA, explains why that is a big mistake. In this short podcast she explains what a balance sheet is and what are red flags in a Balance Sheet that you should look out for.

You’ll be a better informed board member after listening to this podcast episode.

 

In the podcast Carol mentioned the Balance Sheet (or as she prefers to call it the Statement of Financial Position). Here is what it might look like for a homeschool organization:

Featured resource

Carol Topp, CPA has written a book just for homeschool treasurers:

Money Management in a Homeschool Organization

  • Does your homeschool group manage their money well?
  • Do you have a budget and know where the money is spent?
  • Do you know how to prevent fraud?

This 115 page book will help you to open a checking account, establish a budget, prevent mistakes and fraud, use software to keep the books, prepare a financial statement and hire workers. Sample forms and examples of financial statements in clear English are provided.

 

Carol Topp, CPA

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Taxes for Classical Conversations Directors

Last tax year I was asked a lot of questions about taxes by Classical Conversations directors and tutors. Things like:

  • What tax form should I to use to report my income and expenses?
  • What expenses were tax deductible?
  • What tax forms do I need to give to my tutors?
  • How should tutors be paid?
  • How do I pay myself as a CC Director?

Fortunately, there is an ebook in the works to help CC Directors titled:

Taxes for Classical Conversions Directors

The ebook is available only to Licensed CC Directors from Classical Conversations, Inc

You can find the ebook here

 

I recommend the following blog posts:

CC Directors: Do not give yourself a 1099-MISC

Tax return for a Classical Conversations homeschool business

I’m a Classical Conversations Director. Do I have to file any forms with the IRS?

Understanding Taxes for a small homeschool business

Consult a local small business CPA. To find a local tax preparer I recommend two sources:

Both of these websites allow you to search for a local tax preparer who is knowledgeable about taxes for small sole proprietor businesses.

 

Carol Topp, CPA


Free Resource

In the ebook, I mention a bookkeeping spreadsheet for CC Directors. You can get the spreadsheet now (all it costs is your email!)

 


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How to Find a Local Tax Professional

I like local!

I try to support local businesses and frequently tell tax clients in other states or cities to use a local tax professional.

How do you find a local tax professional?

Here are some tips:

I am no longer accepting tax clients for individual tax preparation, but I can help you with :

  • Business consultations by phone, especially of you operate a homeschool business like Classical Conversations, etc.
  • Nonprofit consultations by phone, especially of you are a homeschool organization or local Cincinnati nonprofit.
  • Assistance with applying for 501(c)(3) tax exempt status, especially of you are a homeschool organization or local Cincinnati nonprofit.
  • Filing annual IRS Form 990/990-EZ for tax exempt organizations

Please contact me via email, tell me a little about your business or nonprofit, and what questions and issues you have. We’ll see if I can help you or if you need to go local.

 

Carol Topp, CPA

 

How to Read a Financial Statement for Your Homeschool Group

 

When your homeschool treasurer hands you a financial statement, do you know what you’re looking at?

HomeschoolCPA Carol Topp explains how to read and understand the statement of revenues and expenses better known as the Profit and Loss or P&L . This  15 minute podcast will help your treasurer prepare a statement that is easy to read and understand.

 

In the podcast Carol mentioned the statement of revenues and expenses better known as the Profit and Loss or P&L. Here is what it might look like for a homeschool group:

Featured resource

 

Carol Topp, CPA has written a book just for homeschool treasurers:

Money Management in a Homeschool Organization

  • Does your homeschool group manage their money well?
  • Do you have a budget and know where the money is spent?
  • Do you know how to prevent fraud?

This 115 page book will help you to open a checking account, establish a budget, prevent mistakes and fraud, use software to keep the books, prepare a financial statement and hire workers. Sample forms and examples of financial statements in clear English are provided.

 

Carol Topp, CPA

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Sponsoring a football program under your homeschool group

 
 Super Bowl LII is a few days away! Even though the Green Bay Packers will not be playing (I’m a Packer fan) football is on my mind! Perhaps your homeschool group is considering adding football team. Read on!
I wrote to you about starting a football league and wanting to have a “fiscal sponsorship.”  We postponed the sponsorship last year, but are now wanting to move forward with it.  This has given us new things to consider and I am really out of my league.
  • We are wanting the football program to have a separate bank account from the main checking account, but of course have all the books open and reports/statements submitted to us.  Kind of they way some Boy Scout Troops work with their charter. Will this be a problem?
  •  Will we be able to purchase equipment and supplies for the team using our 501c3 sales tax exemption?
  •  Will businesses be able to make donations specifically earmarked for the football program and then be able to receive a tax deductible letter from us, the main organization?
  • We are planning on purchasing insurance covering the players and cheerleaders. Would the main group need to be on that policy also?
  •  If the football program ever desired to become independent from the main group, would it be able to retain the assets i.e., playing equipment?
I am very overwhelmed at the responsibility involved as a volunteer treasurer. Other board members seem to think I’m overthinking all of this, and that it is no different than a boy scout group and it’s no big deal to get set up–just file some forms and use our tax id to open a bank account for the football program.  I don’t see it as that simple.
Thank you, Tricia
Trisha,
The football program does not have to be a separate legal identity. It can be one of the programs you operate as the main group. Here’s my  reply to your questions.
  • A separate bank account is fine. It will use the main group’s EIN and belong to the parent even though the football program leaders may be signers on the checks.
  • The football program can use the main group’s 501c3 tax status to purchase equipment (sales tax free).
  • Donors can make donations to the football program, but checks should be made out to the main group. You are then obligated to set aside these donations as “restricted funds” only to be used for the football program.
  • Your homeschool group needs to be the owner of the insurance policy because the football program has no separate legal status to buy insurance.
  • All assets belong to the main group, not the football program. If your homeschool group wishes to make a gift to the football program when they split off, it can or you can sell the assets to the football program at a reduced price. I recommend you put something in writing in your fiscal sponsorship agreement about who owns the assets, but leave it up to the board to decide when the time comes whether to sell or gift the equipment to the football program.

I agree with the board; you might be over-thinking this. While it’s good to do your due diligence, it should be pretty easy to add the football program to your homeschool group’s activities.

I do recommend you write up an fiscal sponsorship agreement. Here’s a website with a few examples. I also attached an example I found at Mr Colvin’s law firm website, http://www.adlercolvin.com/index.php You can simplify the language if you wish.

I hope this allows you to sleep better tonight! 🙂

Carol Topp, CPA

Followup: Tricia had additional questions concerning sharing the tax exempt status of her organization and the finances of this new program. Read more here.

Greater Cincinnati Homeschool Leaders Meet Up

 

Several years ago, I organized a meet up of homeschool leaders in the greater Cincinnati area. I enjoyed meeting other leaders and it was a great time to network, encourage, and share resources. I’m organizing another meet up!

Greater Cincinnati Homeschool Leaders Meet Up

Date: Tuesday February 13, 2018

Time: 7:00 -9:00 pm

Place: Faith Bible Church 8130 E Kemper Rd, Cincinnati, OH 45249 In the Family Room which is on the mail floor, off the foyer to the left. The church is located very close to the intersection of I-275 and I-71 near Kids First Gym on Kemper Rd.

Who: Leaders of any kind (board members, etc) of any type of homeschool organization. Even though we are meeting in a church, this is not just for faith-based homeschool groups. Any and all homeschool groups can sent a representative or two (or more!). If you’re not sure that you could call yourself a “leader” come anyway! If you’re thinking about starting a group, come and glean information.

What will we do: Drink coffee and tea, enjoy dessert and fruit, meet and greet others, a brief opening by Carol Topp of HomeschoolCPA, open Q&A, sharing resources, ideas and solutions.

RSVP is not needed. Just come, but to get on an email list and be reminded of the event email Carol@HomeschoolCPA.com

Please share this information with any group leaders you know in the greater Cincinnati, Northern KY and SE Indiana area.

 

Carol Topp, CPA

Painless Homeschool Class Registration

 

Do you find registering classes in your homeschool group to be a dreaded chore? Seth Lowery from LoveMyGroups.com offers an online service called The Hub. It was built with homeschool groups in mind. Hear about how The Hub will make registration and accepting payments for classes easier!

 

In the podcast Carol mentioned

 http://www.lovemygroups.com/thehub-features/

Featured resource

Homeschool Co-ops: How to Start Them, Run Them, and Not Burn Out

Have you ever thought about starting a homeschool co-op? Are you afraid it will be too much work? Do you think you’ll have to do it all by yourself? Starting a homeschool co-op can be easy! This book Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out will give you ideas, inspiration, tips, wisdom and the tools you need to start a homeschool co-op, run it and not burn out!

Click Here to request more information!

 

Carol Topp, CPA

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Adding a football program to a homeschool organization

Super Bowl LII is a little over a week away! While my beloved Green Bay Packers will not be playing 🙁 football is on my mind! Perhaps your homeschool group would like to add a football or other sports program. Read on!
We are a homeschool organization with 501(c)(3) tax exempt status and have been approached by a new member to start a football program. He is interested in starting a football league for our members. He discovered we are a 501c3 organization and our status could help him.

 

I am a little hesitant in sharing our status with a program that is yet to be established.  However, we like the idea of our boys having the option to play football.  He wants to start practices NEXT week and wants to use our checking account for depositing the funds paid by parents.

 

On top of all the other responsibilities of budgeting the events we provide, I’m at a loss as where to begin in this new endeavor or if we should?  Would he need a board of directors?  By-laws of his own?  Would we umbrella this league?  I don’t know where to start or how to advise him.

 

I’m not sure I can take on more responsibilities, especially one this large.  Can you offer advice or point me in the right direction as how to proceed?  I am thinking perhaps he should be independent for a year to “prove himself” before we allow him under our 501c3 status?
Trisha

Tricia,

Wow, nothing like pressure to make a decision!

What the football coach is proposing is called a fiscal sponsorship, i.e. using your 501(c)(3) tax exempt status as an umbrella he can fit under. Usually the sub organization pays a fee 1%-10% of their revenue to the parent organization.

There are pros and cons to a fiscal sponsorship arrangement. It can be temporary, just a year or two until the football program is spun off to be independent.

I recommend a book called Fiscal Sponsorship: 6 Ways to Do It Right by Greg Colvin. http://fiscalsponsorship.com/ the book and the website will help a lot.

You definitely want the fiscal sponsorship agreement written up and signed by both parties so that everything is clear.

You could set up the football program as one of your activities. This increases the risk to your group (football is a risky venture because of potential injuries). Make sure your insurance allows a football program; it may not.

Or you can require his organization have a separate board, bylaws, insurance, etc.  Ask to see the list of board members, minutes of meetings, bylaws and most importantly the insurance policy.

Don’t be pressured into making a decision just because he wants to start the program now. Poor planning on his part does not constitute an emergency (or quick decision) on your part.

 

Tricia asked her questions by email. I can do that  for your homeschool program, 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. Or perhaps a phone call would be better. Contact me to arrange a private phone consultation.

 

Carol Topp, CPA

 

Follow up: Tricia’s homeschool organization postponed the sponsorship for a year and in the following year started a six-man football team and it was very successful.  They even added cheerleaders!

Read additional questions and answers Tricia had about operating a large program under her homeschool group’s tax exempt umbrella.