What homeschool leaders should do this summer to be ready for next year

Sometimes homeschool leaders take the summer off to have a break for running their homeschool programs. But Carol Topp, the HomeschoolCPA, doesn’t want you to completely forget about your homeschool group this summer. She offers a few tasks that you should do this summer to make the fall much easier!

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Carol mentioned this list of topics for your board to discuss: http://homeschoolcpa.com/calendar-of-board-topics-for-homeschool-groups/

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!

Homeschool or microschool?

I have been a teacher at a small private Christian School for many years. I have been asked by 15 families to homeschool their children, beginning in the fall. I have agreed. I purchased your books and read them (so helpful!!) I have done quite a bit of work already, but after filling out half of the 501C3 form, have decided that I really want to make sure this is all done right and am requesting your help.

-S

 

Dear S,

Are the parents committed to homeschooling or would forming a microschool be a better option?

What’s a microschool?

According to Meridian Learning, a resource and advocacy organization for grassroots micro-schools,

a micro school is a purposely small school led by a trained professional and focused on meaningful, sustainable, whole student learning.

Microschools are also called the modern-day one-room schoolroom.

Microschools are not the same as homeschool co-ops, tutorials or programs. Micro schools are registered schools in their states and meet the compulsory attendance requirements of the state. Instead. homeschool programs supplement the main teacher, the parent, with classes and extra curricular activities, but the students are homeschooled under their state laws for homeschooling.

It’s a lot of work to set up a microschool so learn more about starting a running a micro school at Meridian Learning. They host virtual training sessions on topics such as:

  • Teacherpreneur
  • How to Start a Microschool
  • Montessori for Business

Visit this Facebook page on Grassroots Microschools to meet other people running microschools.

I’m committed to helping homeschool leaders, but sometimes other options may work better for some people. I hope S. finds a program that meets the needs of the students and parents.

Carol Topp, CPA

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Keep Up To Date on State Filings for Your Homeschool Nonprofit

Most homeschool leaders know that they need to report annually to the IRS, but did you know that there are probably filings to do in your state every year? Carol Topp, the HomeschoolCPA, discusses the most common state reports that homeschool nonprofit organizations need to file.

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The IRS and Your Homeschool Organization

Does your homeschool group need to pay taxes?  Could they avoid paying taxes by being a 501c3 tax exempt organization? Do you know the pros and cons of 501c3 status? Do you know what 501c3 status could mean for your homeschool group?  The answers are in  The IRS and Your Homeschool Organization. The information in this book has been helpful to homeschool support groups, co-ops, music and sports groups and will help you understand:

  • The benefits of 501c3 status
  • The disadvantages too!
  • What it takes to make the IRS happy
  • What your state requires
  • Why your organization should consider becoming a nonprofit corporation
  • What is the difference between nonprofit incorporation and tax exemption
  • IRS requirements after you are tax exempt

Click Here to request more information!

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Homeschool Treasurers: Do this before giving your board a financial statement

Homeschool treasurers: before you prepare a financial statement for your board meeting you should reconcile your bank account!

Why is reconciling bank accounts so important?

Vickey Richardson of FreeChurchAccounting.com explains,

 I have discovered with my bookkeeping business that reconciling accounts are not very high on some organization’s to-do list. When accounts are not reconciled … financial statements are usually NOT accurate.

REMEMBER…before generating your financial statements, there is a process you should go through to ensure the accounting reports you give your pastor, treasurer, or governing council are accurate and complete.

One of the most important steps is the bank reconciliation!

See how to reconcile your bank account and additional steps you should take BEFORE you start on your monthly, quarterly, or annual reporting …

Bank Reconciliation First then Financial Statements

(click for Vickey’s detailed steps )

I completely agree with Vickey. When I see regular bank reconciliations, the financial statements are almost always correct. When a organization does not reconcile their accounts, the financial statements are usually a mess.

Vickey also reminds us that credit card statements need to be reconciled too! And so do PayPal accounts. A credit card or PayPal account is really just a type of bank account with inflows and outflows. So reconcile them monthly as well.

 

Carol Topp, CPA

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Creative Ways to Run Your Homeschool Co-op Without Employees

So you really don’t want your homeschool co-op to hire teachers as employees, but how can you run your group without them? Carol Topp, the HomeschoolCPA , offers a few creative ways to run a homeschool co-op without hiring employees or dealing with payroll.

Listen to the podcast.

Paying Workers in a Homeschool Organization

Are you paying workers in your homeschool organization? Can a volunteer be paid? Should a worker be treated as an employee or independent contractor? Do you know the difference?

Homeschool leader and CPA, Carol Topp, has the answers to your questions in her book Paying Workers in a Homeschool Organization.

This 130 page book covers paying workers as employees or independent contractors. There are also chapters on paying volunteers and board members. It includes sample forms, tips and advice to help you pay workers in accordance with the IRS laws to help your organization pay their workers correctly. Written specifically for homeschool organizations.

Click Here to request more information!

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IRS tries to decrease errors in automatic revocations for tax exempt organizations

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Every year the exempt organization (EO) branch of the IRS send out a Work Plan for the upcoming year and reviews what it accomplished in the past year.

IRS Exempt Organization 2017 Work Plan (24 pages)

Here’s something interesting I found:

In FY 2016, EO Determinations focused on its objectives to improve processing of applications and enhance customer satisfaction. We implemented several programs to accomplish these goals.
Erroneous Revocation Prevention: On May 3, 2016, EO Rulings and Agreements formalized procedures to identify and prevent erroneous automatic revocation before the organizations are notified and before the revocations are posted to EO Select Check. Preventing these erroneous revocations eliminates adverse impact to organizations and removes the burden from organizations to identify and notify the IRS of the error. Since March 2015, we have reviewed 13,933 potential auto-revocations and prevented 3,202 erroneous revocations (through June 2016).

In plain English, thousands of nonprofits found their tax exempt status was revoked automatically before the organizations were told (!) and before the revocations were posted to EO Select Check (that’s the IRS online database of tax exempt organizations).

Over 3,000 revocations that were an error! What a mess!

The IRS didn’t get specific about why these organizations had their tax exemption revoked or how they fixed the problem, but I have some ideas:

1. It takes 6-8 weeks (yes, that’s WEEKS, not DAYS) for the IRS to update their exempt organization database so that small organizations can file their annual Form 990-N Information Return. If the organization is granted tax exempt status close to their due date for filing the 990-N, they may be unable to timely file a 990-N because the  IRS takes 6-8 weeks  to update their exempt organization database!

This happened to one of my small nonprofit clients. They had failed to file their 990-N for two years (they didn’t know about the requirement) and the deadline for the third year was quickly approaching. Failure to file your 990/990-EZ/990-N for three consecutive years means automatic revocation of tax exempt status. We were sweating bullets that they could file the 990-N on time. The board president was checking the IRS database daily as the deadline drew nearer. She managed to file the 990-N just days before the deadline! Whew!

If the IRS database of Exempt Organizations were updated in a more timely manner, then there could be fewer erroneous automatic revocations.

 

2. Another small nonprofit told me that they received an automatic revocation letter, but had never received a “You’re late in filing the Form 990-N” type of letter or a warning! This nonprofit had not changed their address, either.

So another thing the IRS could do to reduce erroneous automatic revocation is to mail organizations a reminder and a warning letter for failure to file a 990/990-EZ or 990-N.

I hope my suggestions are what the IRS has put in place.

Carol Topp, CPA

 

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How can I thank my volunteers?

 

It’s the end of your homeschool organization’s school year and you want to thank your volunteers. They work so hard, so you hand out generous gift cards as thank you gifts. You may have just created a tax liability for your volunteers! Carol Topp, CPA, the Homeschool CPA discusses ways to thank your volunteers that are tax-free.

Listen to the podcast

 

Do you have more questions about volunteers and paying workers? I spent at lot of time doing research so that homeschool leaders will know if they are paying their volunteers, board members, and workers legally and correctly. It’s all in this new book:

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Paying Workers in a Homeschool Organization-2nd edition

$9.95 paperback
130 pages
Copyright 2017
ISBN 978-0-9909579-3-5

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Church adopts homeschool group. What’s next?

The church that my homeschool co-op meets at has agreed to take us under their “ministry umbrella” for tax purposes, etc. Can you point me in the direction of what to do next? The pastor asked me what he should do to make this happen.

Thank you so much for any help you might offer!

Jill

 

Jill,

Oh that’s marvelous! Really. So few churches are willing to include homeschool groups as a ministry. It’s like your group has been adopted and brought into the family of this church.

Put something in writing stating that the church grants your organization permission to use their Employer Identification Number (EIN) and sales tax ID number as one of their ministries. Also put into the agreement that the church will cover your program under their insurance plan.

Ask if all the financial transactions will go through the church’s checking account or if they prefer you set up a separate checking account using their EIN with your homeschool group’s name.

If you pay anyone (employees or ICs) ask if the church will handle the payroll filings (hopefully they will).

There may be a few other details to iron out like background checks (who pays for them, your group or the church) and details on rooms you can use, building security, cleaning up, supplies and equipment your group can use, etc.

Count your blessings!

Carol Topp, CPA

 

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Can my homeschool group collect money now that’s for next year?

 

Many homeschool groups collect deposits in the spring for next fall’s programs. This helps with determining how many families will be returning. But how should these early deposits be recorded in a homeschool group’s bookkeeping? Carol Topp, CPA the HomeschoolCPA offers some ideas.

 

Listen to the podcast

In the podcast Carol mentioned a handout that explains how to record early deposits in accounting software like QuickBooks.

Here it is: Deferred Revenue in QuickBoooks (pdf)

Do you have more questions about managing the money in your homeschool organization?

MONEY MANAGEMENT FOR HOMESCHOOL ORGANIZATIONS: A GUIDE FOR TREASURERS

  • 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.

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Is there a penalty for misclassifying my homeschool group’s workers?

Is there a penalty for misclassifying my homeschool group’s workers?

The IRS imposes strict penalties on an employer who treats workers as Independent Contractors when they should be employees. These penalties have put homeschool businesses and nonprofits out of business. Carol Topp, CPA discusses this topic and some programs the IRS has to avoid crippling penalties.

Listen to the podcast 

Worker Classification Consultation

  • Is your homeschool teacher an employee or independent contractor?
  • Should your homeschool co-op director be paid as an employee?
  • How hard is it to set up a payroll system?
  • What happens if my homeschool group misclassifies a worker? Are their penalties?

Worker classification can be a confusing topic.

My book Paying Workers in a Homeschool Organization can help clear a lot of confusion, but perhaps you want to discuss your particular situation in a private, individual phone consultation.

I offer phone consultations to help you determine if your homeschool organization’s workers are employee or independent contractors. The phone call will be followed up with an email containing a fact-based determination and information to help you take the next steps.

Click Here to request more information!

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