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

Can you set up homeschooling as a business and get tax deductions?

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Hi Carol,

I have been involved in financial planning for 25 years and own my business. My question is concerning tax deductions that could be available for homeschooling. What are some of the possibilities?

I would assume that a person could set up a home school as a business but that would involve certain steps; what are they?  Would tax deductions be allowed if the business was not profitable or only set up to teach their own children?  Can expenses for things like mileage, activities, food, lodging or associated training expenses count as a deduction?
Thank you.

Jim B

 

Jim,

I have been asked questions similar to yours several times.

Here’s a blog post discussing tax deductions for homeschooling expenses:
http://homeschoolcpa.com/any-tax-breaks-for-homeschoolers/

Some homeschool groups (not individual families) set up a nonprofit organization and receive 501(c)(3) or 510(c)(7) tax exempt status from the IRS. But tax exempt status is only available to an organization, not to individual families.

Tax deductions are not allowed for expenses of teaching your own children. They are considered personal expenses, like food or clothing.

You would not be successful in setting up a business to homeschool your own children because you do not have  a trade; you would have no paying customers. There would be no revenue and the IRS would disallow the expenses because they are  personal expenses, not legitimate business deductions.

So, sorry Jim, but your assumptions were wrong.

Carol Topp, CPA
HomeschoolCPA.com

 

“Incorporate yourself and write off homeschool expenses.” Really?

TaxAdviceLetters

 

Hello. I’ve been doing some research lately on how best to write of homeschool expenses in the state of Florida and came across your website. I’m hoping that you can assist me.

I’ve contacted my accountant who was able to confirm that the only way to write off homeschool expenses in Florida is to incorporate yourself.

If I go through that process, is there a site or a list of what I will be able to write off? Is it 100% of costs like curriculum and field trips? I’ve also heard that I can write off mileage related to homeschool events and even a portion of my mortgage.

I haven’t been able to find a good list anywhere that will tell me what steps I need to take and what advantages I will have once I take those steps.

Can you help or direct me to a good site that can help me?

Thank you so much for your time.

Becky C in FL

Becky,

To “incorporate yourself” you need a legitimate trade or business with a source of revenue (i.e. sales of a product or service). Paying yourself for homeschooling your own children does not count as a trade or business or revenue, so you cannot legally form a corporation.

Even if you do somehow form a corporation without revenue, your homeschool expenses are personal expenses and cannot be deducted on your corporate income tax return.

The advice you received from the accountant you found was incorrect.

Carol Topp, CPA

 

Mouring the loss of homeschool pioneer Debbie Strayer

debbie
I was shocked and saddened to hear of the sudden death of Debbie Strayer on Saturday night. She was the co-author of the popular Learning Language Arts through Literature (which I used when I homeschooled my daughters).

Debbie was speaking at a homeschool convention in Alabama and traveling with her husband.

I think I first met Debbie a few years ago when we served on a homeschool panel together at a homeschool convention. We were asked to offer advice to homeschool leaders.

Later, I’d stop by her booth at homeschool conventions and she always had something positive and encouraging to say. She was one of those women that oozed wisdom. It came from her heart and through her words.

I hope I can be more like her and not take any day the Lord gives us for granted.

Offer condolences on her company Facebook page https://www.facebook.com/geomatters

Carol Topp

Using Facebook for your homeschool group?

FB_HSGroupLeader

Some homeschool leaders over at the Facebook group I am a Homeschool Group Leader were discussing using Facebook as a way to communicate with their members:

Does anyone use Facebook to connect your group members? Do you have a FB group or just a page? What are the pros/cons of each? So many people are on FB now, but is there any benefit to using FB when we already have a Yahoo Group and a website?

We do NOT have a Facebook page for our group. I have not pushed the issue since most of the other board members are very concerned about privacy and have told me that they hate Facebook. However, I do create events for some of our functions that are open to the public, invite people, and ask them to pass the word along. Every time i do this I usually have a couple of people come because they heard about it on Facebook.-Lori C.

We actually started a high school student council FB page. It is ‘secret’ from everyone except members. Parents and students can join the group. Right now, it’s not hugely active, because not everyone is on FB and there is some disagreement about this being a good way to communicate. We do also send out emails and post on our website forums all the student council info as well.-Abby

I set up a FB group for our group and that was the worse thing I could have done. None of the ladies knew each other before I created the group. They used FB to friend each other and then started meeting behind my back which ultimately lead to the all of them teaming up against me to start their own group.  I guess it just depends on the type of people you are dealing with.-Amy

We set up a FB group last year and it has been very effective. Pretty much use it to post events. I like how the events give reminders. We are not a really large group about 25 to 30 families. We also have a yahoo group for those very few that aren’t on FB and are in the process of getting a web page designed. If you are concerned about privacy you can make it a secret group where no one sees it that is not approved in the group. We only allow parents in the group to post on the board.- Jan

We use both a website and FB page. we are able to get in contact with all our members (support group members and co-op members) by both methods. we share are “public” events on FB for all members and then our co-op group activities are posted on the website. it is a lot easier to share links etc on FB. Most of our members are on FB.-Leslie

We got a page last year for our group. Its private, and we screen everyone who wants to join. You would have to know somebody in our group and they can verify and tell us about you. Last year when it was brought up a few people did not like the idea. It was made and most everyone loves it since we can add pictures and other things to it. I feel that it has brought the group closer together instead of just emails thru yahoo. More personable.-Melissa

Helpful links

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Have you stopped by my LINKS page lately?

I have upgraded it and added a few more helpful books, links  and resources for leaders.

Did you know about the blog for homeschool leaders (besides my own blog)?

or how about an on-line support group for homeschool leaders? One exists. The link is on my LINKS page here.

Need some legal help? Go to my LINKS page and find a link to Homeschool Legal Advantage and then read the article about how they helped one group deal with a difficult situation with the IRS.

If you come across any helpful links for homeschool leaders, let me know and I’ll add them.

Carol Topp, CPA

Getting people to help in a co-op

Asked at the Facebook I am a Homeschool Group Leader page

I just found out about One-by-One (a book on motivating members in a homeschool group), it sounds like JUST what I need, I’m excited to order it. It’s the biggest struggle and frustration I have, trying to get people involved, committed and to follow-through! Really hoping the book can help me figure out how to get members out of the “give-me” mode!!! How do you ladies accomplish this?

Reply from : Jennifer C, a homeschool co-op leader
There will always be those who join and never show up to anything. There will also be a few who only want to take. I have found that most are willing to do something, they just aren’t sure what to do. A blanket “what can you offer us?” has not been effective for us.

I have learned that I have to pay attention to the gifts others naturally possess and work with them, be very specific when I do ask for help, and offer lots and lots of praise. Small steps. At our Spring semester sign-ups, I had everyone fill out a form asking “How can you help us?” followed by a list of areas where they could help with little boxes for them to check. That is how I got my planning committee for this coming semester. I was also able to see who is willing to teach now and who is considering teaching in the future.

If you are a very new group, it’s likely most want to just observe how things are run at first before they just jump in. That is probably the most common answer I have seen. That was very hard to deal with two years ago when things were running for the first time. We were all new to the process.

I often remind our co-op members of the definition of the word “co-op” and that what they get will be a result of the collective efforts of all. 🙂 Sorry I’m talking so much. I’m just really excited about what is happening in our group and I want to help others if I can.

Gain Happy Volunteers, Active Members and More Precious Time and Energy with these Simple, Proven Steps. . .
One by One: The Homeschool Group Leader’s Guide to Motivating Your Members

We’re not 501c3 and don’t want to be!

IRS 1040 Forms Post Office April 14, 20113
Creative Commons License photo credit: stevendepolo

Our support group has been in existence over 20 years… and we are  STILL  not a 501(c)(3) …. and don’t want to be!

It would take so much more work, money, etc. to be a 501(c)(3)!!

Many times it is hard for our members to understand this — they think any group who’s not set up as a ‘business’ to ‘make money’ has to be a 501(c)(3).  Our group does NOT take donations — membership fees cover our cost of doing business. And they are reasonable — $10 a year, to get our newsletter via email, $20 if you want it printed and mailed to you.  We put out a group directory each year, pay for some things like church rental for our Back to School meeting, copies of membership forms & information about homeschooling that we distribute, etc.

Karleen
Conroe, TX

Karleen,

I need to warn you in your some of your assumptions. I’m a CPA and work with homeschool organizations to organize properly and decrease their tax liabilities by obtaining tax exempt status with the IRS.

I answered a leader who asked, “Can’t we operate without IRS tax exemption?” in this blog post.

You wrote: “they think any group who’s not set up as a ‘business’ to ‘make money’ has to be a501(c)(3).” They are partially correct. If your organization makes a profit, it owes tax unless it is legally tax exempt.

If your group is a nonprofit (i.e. no profit motive) you have one of 4 legal choices:

1. Stay small and remain under the IRS threshold of $5,000 in annual gross revenues for filing for 501c3 status.The IRS allow small nonprofits to “self declare” their tax exempt status without filing an application. But even small nonprofits must file an annual report with the IRS, Form 990N.

2. Consider another tax exempt status such as 501(c)(7) Social Club if you are a support group. See my blog posts on that issue here. And, like #1, 501(c)(7) social clubs are still required to file an annual report Form 990/990EZ or 990N with the IRS.

3. File for tax exemption under 501(c)(3) as an educational organization. This just got easier with the new IRS Form 1023-EZ.

4. Or you can pay your taxes.  When paying taxes is the alternative, tax exempt status doesn’t look so bad, huh?

Just because you do not accept donations does not exempt you from the IRS and tax regulations.

The USA offers a wonderful opportunity for nonprofit groups to keep all of their surplus and avoid paying taxes on it. But it does mean filing one time a document (Form 1023 or 1024) with the IRS to become a tax exempt organization.

I hope that clears things up a bit.

 

Carol Topp, CPA
HomeschoolCPA.com

Carnival of Homeschooling-One Thousand Gifts

This Carnival is dedicated to Kristen Fagala, wife of Paul and mother to 7 children, who passed away from a sudden brain aneurysm. She was an inspiration and encouragement to homeschool leaders. What a loss to all of us in the homeschooling world, and especially to her family. Offer your condolences on her Facebook page.

Welcome to the Carnival of Homeschooling-One Thousand Gifts theme

The theme for this blog carnival is based on  the book by homeschool mom Ann Voskamp One Thousand Gifts. We are focusing on all the gifts we’ve been given as homeschoolers and all the gifts (especially the unexpected ones) we’ve received.

Please post a comment and add to our list of gifts; we’d love to see your blessings!

My list begins with these gifts:

  • air conditioning (so we’re not grumpy with each other!)
  • other homeschool parents who share their experience
  • books, books, books!
  • homeschool conventions and vendors
  • time with my daughters

Time with our children

Laura Grace Weldon shares how her kids are blessed with the freedom to be themselves can grow up strong enough to follow their dreams in “Strong Enough to be Ourselves” Laura’s gifts include lasting memories, laughter, family sayings worth repeating

The Home Educating Family Publishing Blog says that there’s one very special gift homeschooling brings to military families: time in a blog post titled The Gifts of Homeschooling. Some of the gifts homeschooling has brought include: time; family togetherness; opportunities; adventures; community; personalized education

Linda Dobson reminds parents that only you can rescue your child from the schooling that causes lasting psychic damage in Schooling Causes Psychic Damage Lasting Into Adulthood | PARENT AT THE HELM posted at PARENT AT THE HELM.

Henry from Why Homeschool writes about a new tradition for his family: Weekly Family Councils.

Homeschool vendors

Kay Ryan presents Internet Safety For Kids Podcast ? Episode #11 posted at Keep Your Family Safe Online, saying, “Bryan Bowers interviews Mary Kay Hoal, with YourSphere Media. Mary Kay is a nationally recognized expert in child Internet safety and was recently featured on the ABC News show 20/20. This is the second in a three part series.”

Amy shares Geography Resources posted at Hope Is the Word.

Nebby presents Things that are Supposed to be Good (re Homeschool Curricula) posted at Letters from Nebby.

Other who share their homeschool experience

Andrea of Notes from a Homeschool Mom shares Reasons why I’m glad we homeschool: CRCT fiasco. Local public schools were busted in a huge test cheating fiasco. So why do they want us homeschoolers testing again? Andrea’s gifts of homeschooling include closeness with my kids, expressive children, independent children, educational freedom and a heightened sense of responsibility.

Robin of Crack the Egg Blog blogs that if every homeschooling mom keeps these three things in mind, she won’t be bothered by watching other families with a summer break and wondering why she’s not getting one in Homeschool Organization: Three Tips to Help You Relax. Robin is thankful for these gifts: Not asking permission to pursue what we love, enjoying science with a cat in your lap and time and freedom to read about math, not just do it.

Lisa from Four Simply Living sees homeschooling not as a sacrifice but as a ministry. “How did do I change my pity to passion? I chose to look at homeschooling with different eyes. I no longer see this commitment as a sacrifice; I see it as a reward.” in her post Homeschooling Pity to Passion . Gifts that homeschooling has brought her include: turning pity to passion, knowing that God has my back, coffee, cookies and hot chocolate, home-ec at its best, really knowing who my kids are, and marveling at the gift of being able to spend every day with them, all day!

Cristina Payne presents Impressing Learning posted at Home Spun Juggling, saying, “Sometimes it’s better to lead by example. They learn when they are ready.” 3 gifts: wildlife (we learn so much from it!), a working car, art supplies.

ChristineMM presents A Risk My Husband (and I) Are Willing to Take posted at The Thinking Mother, saying, “ChristineMM of The Thinking Mother shares the content of a lecture her husband gave their 13 year old son about education.”

Jen from Chestnut Grove Academy explains the Why and How of using workboxes in a homeschool at Revisiting the ‘WHY’ and ‘HOW TO’ of work boxes

Book, books, books! (and other great stuff!)

Jen of Frugal Kids shows parents/teachers how to use foam shapes to explore sorting, matching, and making patterns with their preschoolers in Sorting, Matching, and Pattern Fun

Katherine of No fighting, no biting! blogs that after much angst, her 7 year old is reading in busting through the wall. Katherine’s gifts include a quality education for the children, more family cohesiveness, freedom, as opposed to being on someone else’s schedule

momtobe0520 presents the socialization issue posted at Bugs, Knights, and Turkeys in the Yard, saying, “Another voice on the issue of homeschool and socialization” as she reviews Rick Boyer’s The Socialization Trap.

Miss Nirvana presents Garfield Park Conservatory and Sunken Garden in Indianapolis posted at Nirvana Homeschooling.

Pamela Jorrick tells about the fun and trial of  Early Morning Camp Week posted at Blah, Blah, Blog. Her gifts : Sleeping in * Reading books in PJs * Strong family relationships * Watching my children grow and learn * Rediscovering my own love of learning

Kathi Weiss shares what her family does for fun and learning in It’s Too Hot To Think posted at Homeschool Online.

Lisa at School Marm Ohio has been busy reading and shares her recommendations  in Reads for High School. Her gift list includes  Cuddle time on the couch, Dreams shared, “Ah-ha!” moments, Sharing life as a family, Being real, Sharing my passion for the Lord and life with my sons, Seizing the moment, Field trips, Thinking outside the box, Sock fights, Hugs and kisses (Still even though they are young men) and A lifetime of memories

____________________________

Thanks to everyone who shared.

Since I dedicated this Carnival to my friend, fellow homeschooler, Kristen Fagala, I need to add to my gift list: Friends I make via the internet, the hope of eternal life, examples of generosity from other homeschool mothers, prayers of others, kind words, reminders that life is short.

Please post a comment and add to our list of gifts; we’d love to see your blessings!

Next week’s carnival will be hosted at MrsMamaHen.blogspot.com/

Carol Topp, CPA

HomeschoolCPA.com

Tragic loss

I am in shock at the sudden loss of my friend Kristen Fragala, wife of Paul and mother to 7 children, who went to be with the Lord yesterday after having a brain aneurysm.

KristenFragala


She wrote One By One: The Homeschool Group Leader’s Guide to Motivating Your Members and was an inspiration and encouragement to homeschool leaders. What a loss to us all, especially her family.

Kristen was a wonderful, generous woman who wanted to share what she knew about leading a homeschool group with others.

She also ran a website and Facebook group for homeschool leaders. Offer your condolences here: https://www.facebook.com/groups/72534255742

She will be greatly missed.

Carol Topp, CPA

P.S. If you would like to purchase Kristen’s book One by One (Ebook) just click here and I will donate all proceeds to her family.