Five Money Myths That Trip Up Homeschoolers

Myth #1:  Just a Little More Money Will Solve All My Problems

Truth: Problem is not lack of money, but lack of contentment

Read more here.

Carol Topp, CPA

Kristen and Denise of Homeschool Group Leader recently interviewed me about leader burnout.

They are currently running a series at their blog on burnout with a new topic each Wednesday.

Here is the first portion of the interview:

What a great time we had interviewing author and Homeschool CPA, Carol Topp! She shared a bundle of hand-picked truths from her super-helpful book, Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out. With knowledge and insight, Carol explained the warning signs of leader burn out and how to avoid it.

Do you feel like you might be burning out? Is homeschool group leadership overwhelming you? Have you noticed another leader’s fire seems to be fizzling out? How would you know?

HGL: From your experience, how can a leader know when he or she is burning out?

Carol Topp: It is important to recognize burn-out before it causes damage to you, your family or your homeschool group. Here are some symptoms of burn-out:

* loss of enthusiasm
* negativity
* depression
* health problems
* neglecting your own children
* neglecting your husband
* irritability
* feeling like a failure
* losing joy in serving

If you have 4-5 of any of these symptoms, you are experiencing burn-out.

This simple list can enlighten the path ahead so that leaders can take action and be completely healthy.

Kristen & Denise will make the complete interview available to you as soon as possible. Until then, you can read more of the interview at Homeschool Group Leader blog as they post excerpts from my interview each Wednesday. Soon the complete interview will be available in two reasonably-priced formats—audio cd and word-for-word transcript!

Can’t wait? Need help now?

My book Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out has an entire chapter devoted to burn out.  Actually the whole book offers suggestions on how to delegate and avoid burn out. It is available from Amazon.com.

Read a sample chapter here.

Order here.

Kristen and Denise have a terrific book One By One: The Homeschool Group Leader’s Guide to Motivating Your Members. It is an ebook and available for immediate download.
Click Here!

When does my teenager owe taxes? What about babysitting income? Is it taxable?

Taxes for teenagers can be confusing, so I am hosting a live webinar to help parents understand taxes for their teenagers.

Teens and Taxes live webinar

Thursday, March 4, 2010

9 pm EST, 8 pm CST, 7 pm MT, 6 pm PST

The live web class will be hosted via Talkshoe, a podcast service. There is no charge for the webinar, but I do ask that all attendees register so that I can send you a handout and reminders.

By registering, you will also be able to purchase a copy of my ebook Teens and Taxes: A Guide for Parents and Teenagers for only $7.50, 50% off the regular price $14.95

My ebook, Teens and Taxes is a very helpful guide for parents.  Although the ebook is helpful, it is not necessary for you to have a copy in order to benefit from the webinar.

During the webinar , I will be discussing

• When does a teenager need to file a tax return
• Should a teenager file their own return?
• Can a parent include their teenager’s income on their return?
• Do babysitters need to file a tax return?
• How much money can a teenager earn before they owe taxes?
• Can I still claim my teenagers as a dependent?

There will be time for your questionseither via on-line chat or by phone.

Here’s how the webinar works.

After you register by sending me your name and email, you will receive an e-mail from me with:

1. A link to the webinar where you can listen via your computer and participate in the on-line chat room to type in a question.

2. A phone number and code that you may use if you wish to listen into the webinar but cannot be at your computer. You will be able to hear everything I say and can even ask questions over the phone.

3. A handout you may print to take notes during the webinar

4. A link to purchase Teens and Taxes: A Guide for Parents and Teenagers for only $7.50, 50% off the regular price $14.95

I will also send you a reminder email the day before and the morning of the webinar.

Register today, buy the ebook Teens and Taxes for a discounted price and get your questions ready for Thursday, March 4!

Carol Topp, CPA

Paying Workers in a Homeschool Organization

was recorded on

Friday, January 15, 2010

and is now available for you!

or listen at the Talkshoe site here: HomeschoolCPA’s Workshops

Topics:

• Volunteers. Can you pay a volunteer? How to reward volunteers.
• Independent Contractors. What are they? What IRS forms need to be filed?
• Employees? How are they different from Independent Contractors? What forms does the IRS require?

The workshop runs for one hour.

Look for more upcoming online workshops. Sign up for my newsletter to be informed of the next date and topic.

Carol Topp, CPA

I am frequently, “Are there any tax breaks for homeschooling parents?”  My usual reply is, “No; there are no tax credits or deductions for homeschool expenses at the federal level.” There are tax breaks offered by some states that I discuss in another blog post.

But here’s a bit of a new twist on the question from a homeschool mother.

I spoke with an IRS representative just today about an educator’s expense tax break.

The IRS rep stated that IRS laws specifically prohibit homeschoolers from getting up to $250 credit for educational items purchased. However, he stated congressional law overrides IRS law and that congressional law requires teachers work in a school as defined by state law. In our home state, Kentucky, we are considered private schools. The IRS rep suggested I give the credit a go next year but be prepared for an audit. Can you shed some light on the situation?

She is referring to the Educators Expense deduction of up to $250 in unreimbursed expenses.

The IRS guidelines say to be an eligible educator:

“You work at least 900 hours a school year in a school that provides elementary or secondary education, as determined under state law.”

To work means to get paid (to the IRS, not to all of us SAHMs!).  Homeschool parents are not employees of a school.  We do not get paid; we do not get a W-2.  I attended a tax workshop where we were told that the IRS will check for a W-2 from a school if a taxpayer takes the Educator Expense deduction. Homeschoolers would not have a W-2 from a school, even if your state classifies your homeschool as a private school.

The intention of the tax deduction was to move the deduction from the Schedule A (Itemized deductions) Miscellaneous Deductions where it was subject to a 2% of Adjusted Gross Income limit (meaning anything over 2% of your AGI could be deducted) and put the deduction on the front page of the 1040, so even teachers who don’t itemize deductions can take advantage of the $250 deduction.

The Educator Expense Deduction was nearly eliminated in 2006, but received an extension.  I predict the deduction will not be around for much longer.  IMHO, it was President Bush’s attempt to get a few votes from paid teachers.

So in short, I do not take the Educators Expense deduction, nor recommend that other homeschool families take the deduction.  The IRS rep was right, be prepared for an audit.  But without a W-2 from a school, you won’t win.

HTH,
Carol

P.S.  Here are my required “lawyer” words:
Internal Revenue Service Circular 230 Disclosure:  Advice relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of  avoiding penalties under the Internal Revenue Code or  promoting, marketing or recommending to another party any transaction or matter addressed herein.

This homeschooling mother in NC ran into a problem when she tried to open a bank account for her family homeschool.

I live in North Carolina, homeschool my children and want to do some fund raising for some projects and field trips and also school supplies.

I went to the bank, wanting to open an account in the homeschool’s name and they said that I would have to open up an account in my name doing business as my homeschool’s name.

My question to you is, how do I go about paying taxes on the money? I do not want to get into trouble with the IRS. Was that the right thing for me to have done? Waiting to hear from you soon!
Kim

Dear Kim,

I’ve been asked questions like yours before. I answered them in two posts on my blog.

Can we (an individual homeschool) be allowed to do fund raising similar to youth sports groups, scouts,etc?

Yes, you can participate in a fund raiser if the fund raising organization allows it. BUT, the profit you make is taxable income and you’ll need to report it on your tax return.

Can my individual homeschool have a fundraiser?

Individual fundraisers and homeschool groups

I hope that answers your question; let me know if it doesn’t.

Carol Topp, CPA

I received a phone call from a homeschool support group leader that had just learned her treasurer had embezzled over $10, 000 from her group during the past two years. Her tale was heartbreaking as she spoke of what painful lessons she had learned and how to go forward.

Some of the signals that the leader saw that tipped her off were:

• The checkbooks was kept locked in the treasurer’s business office and frequently inaccessible.
• The leader had a difficult time getting the treasurer to write checks to members for expenses.
• No budget was ever created.
• The treasurer was not detailed oriented.
• The treasurer also did the bank reconciliation, so no one else saw the bank statements.
• The treasurer’s business income was severely hit by the recession making his personal finances in trouble.
• The treasurer was married to the vice chair, who was a close friend of the leader, so the leader was reluctant to confront her friends.
• The board was small and few people were willing to volunteer, making the leader desperate and grateful when anyone said they would serve as treasurer.

Here is what the group is doing now:

• Adding more board members
• Using a bank account with on-line access for visibility
• Creating a budget
• Amending bylaws and policies to add accountability
• Having someone besides the treasurer do  the bank reconciliation
• Pursuing restitution from the treasurer
• Consulting with a lawyer on when to use criminal prosecution

I hope you don’t ever face a similar situation.  To prevent fraud in your homeschool group, follow the practices mentioned above and in my book Money Mangement for Homeschool Organizations which you can order from the Bookstore page.

Carol Topp, CPA

Tanya is referring to a sample independent contractor agreement I include in my Money Management for Homeschool Organizations and Paying Workers in a Homeschool Organization ebooks. Both are available at my bookstore.

The W-9 is the official way to collect an Independent Contractor’s name and SSN or business name and EIN(Employer Identification Number).  This information is needed if your pay them over $600 a year and issue them a 1099MISC.

It is also the unofficial way to determine if you are dealing with ethical people.  Some people do not like giving their information on a W-9 because they were not going to report the income on their tax return.  Having them fill in a W-9 indicates that your organization obeys the law and expects them to obey the law as well.

Carol Topp, CPA

Carol,
Actually the parents with students in the class pay the independent contractors directly.  It does not come from the co-op’s funds.  Do I still need to keep track of how much they get as an annual total from the parents and work complete these forms?  If so, we may need some additional guidance.
Thank you,
Tanya

Hi Carol–your website and book have provided valuable information to our group as we have grown from a medium-sized support group to a large, full-fledged co-op in just three years.  I have had the privilege of leading the group throughout this process, and I am blessed to be a part of such a wonderful group of families.

They are so wonderful, in fact, that my Board of Directors recently took up a collection from our members as a way of presenting me with an end-of-year gift of appreciation.  This was a complete surprise to me, especially when they presented me with a check totaling over $700!

My question to you is in regard to this check.  The Board collected donations from individual members and then wrote me a check on the group account.  I’m unsure of how to deal with this tax-wise.  We are a 501(c)3 with gross receipts under $25,000.  I read on your website the faq about paying an honorarium–is that what a gift of this nature is?  The gift was given with the intent of paying my expenses for our state’s homeschool convention, including the leadership conference.  If I didn’t cash the check and used the funds by using the group’s debit card to pay my hotel expenses, would this alleviate the filing requirements (since the amount would then be under $700), or does the hotel payment constitute income as well?

Thank you for taking the time to answer.  I want to make this as easy as possible for group record keeping, and I’m not sure if this is the correct way to go about it.

Blessings,
Barbie T, Florida

13 Reasons Not To Join Our Co-op

Homeschool co-ops are not for every homeschooling family, and we certainly do not expect our co-op to necessarily be perfect for your family. As a matter of fact, we would rather you determine that our co-op is not a good “fit” before you make the commitment to participate for a full 14-week semester. The following 13 reasons why you may not want to join our co-op are based on feedback from former members for whom our co-op did not work out.

If you experience any of these situations, please, please, please do not join our co-op!

1. If you have a full time job or a busy extracurricular schedule and already have limited days for “book learning” at home, then you will find co-op way too time-consuming. Co-op takes a full day out of your week because you must be at co-op if your child is there. You certainly do not have to teach, but you can serve as a class helper or co-teacher or on the clean-up crew for part of the day. Our co-op is truly a “cooperative” effort, so we rely on everyone to make it work successfully, and we expect members to honor their commitment when they join. If you already don’t have time for co-op, don’t sign up!

2. If you are moving or will move this year, or if you have health problems or family obligations to help parents or other relatives, focus on those priorities first until this season of your life has passed. Do not add more stress to your life by committing your family’s precious time and energy to our co-op. If you and your children will not be able to meet your weekly obligations, you will let yourself, your family and the co-op down.

3. If you already know that you may miss three Thursdays per semester, please do not join our co-op as you and your children will already miss a full quarter of classes — and that’s before illnesses! Of course, we understand that illnesses and emergencies occur unexpectedly (and we do not want you to attend if you are sick), but we also respect the time and effort that facilitators put into their classes each week. They deserve the mutual respect of having students be in class and on time, barring unforeseen situations and illnesses. We ask parents to honor their commitment and make punctual attendance a priority.

4. If this is your first year homeschooling, you really need to take a year to adjust and find out what style works best for your family. Co-op is not a substitute or alternative to schooling at home. Indeed, jumping right into a co-op before adjusting to homeschooling may overwhelm you and your children.

5. Similarly, if you are joining co-op as a substitute for school or so you won’t have to teach your children at home, then co-op will not meet your needs. The parent is still the primary teacher for classes taught at co-op because the parent knows her children better than any teacher ever could. While our classes are designed to provide students with specialized instruction, co-op classes do not absolve parents from their responsibility for their children’s education. Parents still must ensure that their students keep up with homework, and they may need to assign supplemental coursework at home. Additionally, parents administer tests at home and determine final grades.

6. If you homeschool because your child could not learn in a classroom environment or if your child does not do well in a group setting, you probably will not be pleased with our co-op. Although classes typically range between 4 and 10 students, as with the creative writing class pictured at right, we still group students by grade/age and expect “classroom manners” — although, since most are lifetime homeschoolers, they don’t always know to raise their hands! Also, whiteboards, tables and chairs make our classrooms very efficient for teaching a class, but give the classes a bit of a school-like feel — however, with homeschoolers as teachers, our class activities are usually more out-of-the-box! Additionally, with even a small group of families, we must rely on some rules and guidelines to maintain order and efficiency. If you unschool, you and your child may not feel comfortable even in our relaxed setting.

7. If you homeschool because you feel no one else can adequately teach your child what he needs to know in any given subject, you will not be satisfied with any parent who teaches a specialized co-op class. If you join our co-op, accept that others may not teach a subject the way you would and relinquish some control. At home, focus on subjects not taught at co-op to maximize your time. Alternatively, accept that you will be supplementing at home to a certain extent. If you’re not okay with either option, you should not join a co-op at all.

8. If you are joining co-op for purely socialization reasons, you will likely find the classes too academic. All high school classes and most junior high classes require homework. Also, a few classes, such as the Apologia sciences pictured at right, require lessons at home during winter break in order to finish the course in one year. Even kindergarten and elementary classes have lessons incorporated into their activities and games. Also, while our children see each other at other homeschool events and clubs, our co-op does not schedule field trips or clubs. You would do better to join one of the many local homeschool support groups for socialization opportunities.

9. If you are joining co-op for rigorous, college-prep courses, you may find the classes not challenging enough. Unlike some co-ops, we do not administer tests nor do we assign grades. The parents remain the primary teachers of their own children. Kindergarten and elementary classes have neither homework nor lesson plans to follow at home. However, while most high school courses are college-prep, a weekly class for only 14 weeks cannot possibly cover all there is to know in a particular subject. Depending on the subject, you may want to supplement at home by assigning extra books or research.

10. If your junior high or high school students already have a full load of schoolwork at home or are members of another co-op, our classes may interfere with their ability to complete their schoolwork. Please focus on one co-op at a time.

11. If you have babies and toddlers in your family, you may want to wait until they are a little older. Although we do maintain a small nursery, the co-op may interrupt their feedings and nap schedule. Plus, little ones usually get sick more frequently than older children, which could cause your family to miss a lot more of co-op than you want.

12. If your child is undergoing obedience issues or social or behavioral problems, this is not a good time to join co-op. Focus on the character growth of your child before putting him in a situation for which he may not be ready. This applies to all children, whether preschool, kindergarten, elementary, or high school!

13. If you are on a tight budget or live a good distance from our location, you may not want to make the financial investment. Class fees are minimal (between $1 and $15 for all 14 weeks) and cover supplies only, but fees do add up for a large family. Also, gas prices may be prohibitive if you live a considerable distance from Grace Community Church in Millbrook.

No co-op will fit every family. Before joining our co-op, or any homeschool co-op for that matter, you should consider what the Lord may have planned for your family this year. Ask yourself if participating in a co-op right now would enhance or exhaust your family at this season of your lives. Also, examine your reasons for joining a co-op. Consider what you expect from participating in this co-op, and ask other members if this co-op will likely meet those expectations. If not, don’t worry. You definitely do not need a co-op to homeschool successfully!
About the Author:
Carren W. Joye is the author of Homeschooling More Than One Child: A Practical Guide for Families (ISBN 0-595-34259-0), Alabama State History Curriculum for grades K-9, and A Stay-at-Home Mom’s Complete Guide to Playgroups (ISBN 0-595-14684-8). A homeschooling mom of four children, she has founded four successful playgroups, a homeschool support group, homeschool covering, and homeschool co-op. For more information on her books and state history curriculum, visit her web site at www.carrenjoye.com.