Can I homeschool a friend’s child?

Hi Carol,

I would really like to homeschool my 3 children next year and would also like to pick up my daughter’s best friend as well. She and her mother have expressed an interest in having me homeschool her. I live in Maryland and am having a hard time finding info on whether or not I can do that and how to go about it. Do you have any info on that kind of thing? From what I understand, I would have to start up a small business. My question is would I have to be a licensed childcare provider? She is 9 years old, and her brother is 4 and I was considering schooling him also.

Thanks ahead of time for any help you can give me!
Karen

I’m not an attorney nor familiar with MD homeschool laws, so you’ll have to do some homework on whether it is legal to homeschool other people’s children.

Some states allow it; others apply restrictions. Many states do not address it at all!

Start with this helpful diagram from Homeschool Legal Advantage: http://homeschoollegaladvantage.com/statelaws/Maryland_Revised_09.pdf

and this explanation from HSLDA: http://www.hslda.org/laws/analysis/Maryland.pdf

You could also contact the Maryland Home education Association at http://www.mhea.com/askmhea.htm

Then at the A to Z Home’’s Cool website (http://homeschooling.gomilpitas.com/laws/blMD.htm) I found this comment on using tutors and ‘alternative resources’ from the President of the Homeschool Association of Harford & Surrounding Areas

On the issue of tutoring and how much or use of alternative resource a homeschoolers uses, this is a huge NON issue. As long as the parents are overseeing the homeschooling program there is no issue or fear of using educational services.

I hope that’s a start!

P.S. For those of you outside of MD, You’ll have to do some homework for the homeschooling laws in your state. The links I share are a good place to start!

Carol Topp, CPA

Homeschool Business and Entrepreneur Directory (FREE!)

Homeschool Business and Entrepreneur Directory™has just been released this week by Paul and Gena Suarez, the publishers of  The Old Schoolhouse magazine.
This digital magazine is being sent out to homeschool families around the world.

And it’s free to everyone!

HomeschoolBusiness Directory

Feel free to pass this link to your friends. The directory is 200 pages and shares the following:

  • What kind of homeschooler are you?
  • What is your homeschooling style?
  • Unit Studies
  • Charlotte Mason Homeschooling
  • Eclectic Homeschooling
  • Classical Homeschooling
  • Homeschoolers in business
  • The Relaxed Homeschooling Lifestyle
  • Special needs homeschooling
  • Gifted homeschoolers
  • BEST RESOURCES FOR HOMESCHOOL FAMILIES

I have a few articles and ads in the Directory including:

  • p. 38 “The Ten (Unusual)Roles You’ll Play as a Work-At-Home-Mom” article
  • p. 46 “Accountant to Author: A Home Business Journey” article
  • p. 47 my ad for Micro Business for Teens, my new book series
  • p. 124 my ad for my small business consulting and accounting services at CarolToppCPA.com
  • p. 134 my ad for HomeschoolCPA.com, my website for homeschool leaders

The Homeschool Business and Entrepreneur Directory™ is full of article on homeschooling and a huge directory of resources and entrepreneurs ready to serve the homeschooling community!

Look and see!

Carol Topp, CPA

HomeschoolCPA ebooks mentioned by HSLDA

I am pleased to announce that Homeschool Legal Defense Association (HSLDA) has mentioned several of my ebooks and articles on their Group Services webpage.

HSLDAGroupServices

While homeschool groups are not HSLDA members, HSLDA does offer their group services staff, with more than twenty years experience in local and/or state support group leadership, to assist groups by providing examples of how other leaders have handled similar circumstances.

http://www.hslda.org/GroupServices/Leaders.aspx/Legal

On the Leader Support tab you’ll see Legal and Finaincial Resources and my ebooks are articles are metioned there including:

Money Management for Homeschool Organizations by Carol Topp, CPA. (e-book)

How Do We Become a Recognized Nonprofit?” by Carol Topp, CPA

Do We Need to Incorporate?” by Carol Topp, CPA

Q&A for Homeschool Leaders (e-book) by Carol Topp, CPA—The most frequently asked questions from homeschool leaders on the IRS, nonprofit and tax exempt status, boards, conflict, money, fund raising, volunteers, paying workers and insurance.


Thanks HSLDA in helping to assist homeschool leaders!

Carol Topp, CPA

Finding a Local Homeschool Co-op

cincinnati

My home, Cincinnati, Ohio, has an abundance of homeschool co-ops and other opportunities for group learning.

Here’s an incomplete list of homeschool co-ops in the greater Cincinnati area.  Locations and meeting times may have changed. Please visit the website or e-mail for up to date information. E-mail me at Carol@homeschoolcpa.com with additions or corrections.

Greater Cincinnati Homeschool Co-ops List
__________________________________________________________________________

Don’t live in near Cincinnati? Visit these sites for local homeschool group information

A to Z Home’s Cool
Go to your state page and put “co-op” in the browser search

Local Homeschool.com
Search by “Type” for “Co-op” or “Cooperative.” You can further
narrow the search by including your state and/or county.

It may take a bit of digging, emailing and persistance, but eventually you’ll find a group that may nmmet your needs!

Can’t find a co-op near you? Buy my book Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out and start your own co-op!

Carol Topp

5 Ways a Homeschool Co-op Can Benefit Your Child

One of my workshops for the Ultimate Homeschool Expo 2011  is titled

5 Ways a Homeschool Co-op Can Benefit Your Child

Here’s the handout so you can follow along!

5 Ways Co-ops Benefit Handout

UHSE2011Block1

Want to learn more about the Ultimate Homeschool Expo, an on-line homeschool convention with 30 speakers and over 100 workshops?

Learn more here.

The UHSE will be live the week of May 2-6, 2011, but until then every Thursday there are live workshops you can join for free.

If you can’t join us live, the workshops are recorded and you can listen on your computer or download to your mp3 player and listen at your leisure. I like to listen as I take my morning walk!

Tickets are $39.95, but on special for only $24.97 for a limited time.

Buy your ticket here

Carol Topp, CPA

Compare 501(c)(3) Charity to 501(c)(7) Social Club

The IRS offers more than a dozen different classifications of tax exempt status.  The most popular by far with 80% of the total is the 501(c)(3) “Qualified charity status.”

Many homeschool organizations may qualify to be 501(c)(3) qualified charities with an educational purpose or 501(c)(7) Social Clubs with a social or recreational purpose.

Here’s a comparison of 501(c)(3) “qualified charity” status and 501(c)(7) Social Club.

In general, homeschool co-ops fall under 501(c)(3) “qualified charity” because they have an educational purpose, while homeschool support groups fall under 501(c)(7) Social Club.

501(c)(3) Qualified Charity 501(c)(7) Social Club
Purpose Religious, Educational, Charitable, Scientific, Literary, Pleasure, recreation, social activities
Examples churches, charities, private schools, homeschool programs with an educational or religious purpose Fraternities, sororities, country clubs, hobby clubs, homeschool support groups
Requirements No private inurement allowed. Upon dissolution all assets must be distributed to another 501(c)(3) organization. Personal contact, fellowship and co-mingling of members. No private inurement allowed.
Activities Can hold programs, sell services and products as part of their exempt purpose. Can provide meals or services only to members in connection with club activities
Tax deductible donations allowed Yes No
Tax exempt (no taxes on profits) Exempt from federal income tax unless the organization has unrelated business income Exempt from federal income tax on income derived from members; other income taxed
Source of Income Membership fees, fees for services, donations, fund raisers, program fees Primarily (65% or more) of the income must come from the membership
Membership Serving the public or the “public good” (i.e. the education of children is a public good) Limited membership and consistent with the purpose of the club
IRS Application Required? Yes, if gross revenues over $5,000/year. File Form 1023 or 1023-EZ No. The IRS does not require 501(c)(7) organizations to file an application. They can “self-proclaim” tax exempt status.
Annual IRS Reporting Form 990-N, Form 990-EZ or Form 990 Form 990-N, Form 990-EZ or Form 990
Legislative Lobbying permitted? Insubstantial lobbying allowed (less than 20% of total expenses). No endorsement of a candidate. No limit on legislative activity as long as it furthers the exempt purpose

IRS and Your Homeschool Org cover

Need more help understanding your tax exempt status?

My book, The IRS and your Homeschool Organization is a good place to start.

If you have specific question about your homeschool program, we can arrange a phone consultation.

I hope that helps!

Carol Topp, CPA

Save

Are Homeschool Support Groups Automatically Tax Exempt?

women_group_Feet

I help homeschool groups file for tax exempt status with the IRS.

Most of them are homeschool co-ops and want 501(c)(3) status as a “qualified charity” because they have an educational purpose and desire tax deductible donations, tax -free profits and sometimes other perks that come with 501(c)(3) status.

But there is another type of tax exempt status that may apply to homeschool support groups: 501(3)(7) Social Club.

Here’s what it takes to be classified as a 501(c)(7) Social Club:

1. Purpose is for pleasure, social or recreation. A nonprofit motive and no part of the net earnings may inure to the benefit of any person having a personal and private interest in the activities of the organization

There must be an established membership of individuals, personal contacts and fellowship. A commingling of the members must play a  major role in the life of the organization.

Common examples include  college fraternities or sororities, country clubs, garden clubs, hobby clubs, etc.

2. Limited membership: membership is limited and consistent with the character of the club

3. Supported by membership fees. In general, your club should be supported solely by membership fees, dues, and assessments. A section 501(c)(7) organization can receive up to 35% of its gross receipts from sources outside of its membership without losing its tax-exempt status. For example, up to 35% of your total revenues can come from fund raising.

4. Business activities. If your club will engage in business, such as selling products or services, it generally will be denied exemption. However, your organization can provide meals, refreshments, or services related to its exempt purposes only to its own members or their dependents or guests.

5. Tax treatment of donations. Donations to social clubs are not deductible as charitable contributions on the donor’s federal income tax return.

Sources:
http://www.irs.gov/pub/irs-tege/rr58-589.pdf
http://www.irs.gov/publications/p557/ch04.html#en_US_2010_publink1000200325
http://www.irs.gov/irm/part7/irm_07-025-007.html

These criteria fit a homeschool support group. The members are limited to homeschool parents (or those interested in homeschooling), meet for social reasons, are supported by membership fees (and maybe a little bit of fund raisers), do not sell products or services and do not collect tax deductible donations.

So most homeschool support groups can be considered 501(c)(7) Social Clubs.

Most homeschool co-ops do not fit this description because they sell services (classes) and have an educational purpose, not a social or recreational purpose. They may qualify for 501(c)(3) tax exempt status as an educational organization.

Confused about whether your organization is a 501(c)(3) “qualified charity” or 501(c)(7) Social Club?

This chart may help: Compare 501c3 to_501c7

Here’s the good news: If your organization fits the bill to be a 501(c)(7) Social Club, you do not have to file the IRS application (Form 1023 or 1024) like 501(c)(3) organizations must. 501(c)(7)s  are allowed to “self-proclaim” their tax exempt status.

Here’s the bad news: The IRS requires all tax exempt organizations for file an annual information return , Form 990/990EZ or 990N.  Failure to file the Form 990/990EZ/990N for 3 consecutive years means your tax exempt status is automatically revoked. Need help getting your tax exempt status reinstated? I can help.

Carol Topp, CPA

Video: Homeschool and Taxes

The Homeschool Channel TV has a short video explaining tax breaks for homeschoolers.

You may need to register as a member of Homeschool Channel. It’s free and an excellent resource of videos for your family.

View Homeschool Channel TV: Homeschool and Taxes here

HomeschoolChannel_Taxes

Jeremy and Steve discuss 501c3 charitable status.

I have an article on my blog that answers the question:

Can my family homeschool be a nonprofit charity?

Carol Topp, CPA

Can’t we operate without IRS tax exempt status?

irs_sign

Carol,

Does my homeschool support group really need to apply to 501(c)(3) tax exempt status with the IRS? It seems like a lot of time and money. We have a small budget and we don’t accept tax deductible donations.

Can’t we just operate as we are?

You described your group as a support group, meaning you exists for the benefit of the members and you do not accept or plan to seek tax deductible donations.

Many larger homeschool organizations, especially co-ops that have an educational function and not just a support group purpose, seek 501(c)(3) tax exempt status for its many benefits:

  • tax exemption
  • ability to accept tax deductible donations
  • ability to participate in fund raisers only open to 501(c)(3) charities

See my article Do we need 501c3 status?

But homeschool support groups are different. They don’t hold classes; they focus on fellowship. Support groups don’t accept donations; they get all their income from membership dues and maybe a little bit of fund raising.

I attended an IRS webinar and asked your question. Here’s what the IRS said:

It is true the Tax Reform Act of 1969 requirement to “give notice,” (to apply for recognition of tax-exempt status) applies only to organizations wanting section 501(c)(3) status.
So, although other types of organizations are not required to file Form 1024, they may still wish to do so in order to receive a determination letter of IRS recognition of their status. Having the determination letter ensures public recognition of their status and may enable exemption from some state taxes.
Also, even though an organization may “self-proclaim” its tax-exempt status, it is still subject to the rules governing its particular sub-section. It is also subject to IRS examination to determine whether it meets the requirements for the exemption it is claiming.

Translation:

If your organization wished to obtain 501(c)(3) tax exempt status, then you must file an application for that. I can help . See my Services page

If  instead, your group fits the criteria of a social club (what the IRS calls a 501(c)(7)), then your organization can “self-proclaim” that you are tax exempt without filing the paperwork.

But you still have to obey the rules and fit the IRS definition of a social club. 

What it takes to be classified as a 501(c)(7) Social Club

And you don’t have a nice letter from the IRS to prove that you are tax exempt.

So there you have it…most homeschool support groups, if they operate as a social club, can be considered tax exempt without going through the time and expense of tax exempt application with the IRS.

P.S. But even if your group does not have to file the application paperwork (Form 1023 or 1024), your organization must still file an annual information return called a Form 990/ 990EZ or the simple on-line Form 990N with the IRS. Read more here: IRS Form 990N FAQ

Carol Topp, CPA

Lessons from a goose on leadership

Geese

Who knew that geese could tell us so much about leadership?

Geese fly in a V formation to create uplift. They fly 71% farther when flying together than if they flew alone.
Application for homeschool leaders: Don’t run your group alone. Gather other people to help you and you’ll go farther and avoid burnout.

When the lead bird gets tired, he drops out of the head spot and flies in the back to recover and take advantage of the lift from the other birds.
Application for homeschool leaders: Rotate leadership. Bring in fresh, new people. Set term limits for board members.

Geese honk to offer encouragement to each other, sort of an “Atta boy!” or “You can do it! Keep going!” to each other and their leader.
Application for homeschool leaders: Encourage your leaders. Offer appreciation gifts and thank you cards.

Thanks to :

http://www.airpower.maxwell.af.mil/apjinternational/apj-s/2007/4tri07/popeeng.htm

Carol Topp, CPA