How to wrap up your year as treasurer

It’s near the end of the year for many homeschool nonprofit organizations.

Here’s a list of tasks for a treasurer to do to finish the year:

  • Enter all transactions and check to ensure that your bank reconciliations are up-to-date for the entire year.
  • Fill out the IRS 990/990EZ or 990N if required. As the Treasurer, you are the most appropriate person to fill out this annual IRS form.
  • Give a year end summary to your board. My free webinar Financial Reports for Homeschool Nonprofits will show you good, bad and ugly financial reports.
  • Make a list of any items that you or the next treasurer needs to address that might be out of the norm like outstanding checks.
  • Change authorized banking signatures, if needed. Change names on state registrations and the IRS EIN too. How to change responsible party name on EIN.
  • Put together a list of important deadlines like insurance renewal, Form 990 dues date, state registration deadlines, etc. If you are the next year’s treasurer, put these dates on your calendar.
  • Review the next year’s budget with the incoming treasurer. Don’t have a budget? This should help How do I create a budget for my homeschool group?
  • Train the incoming treasurer. My Board Manual  can serve as a board training guide.

My book Money Management in a Homeschool Organization is a guide for treasurers of homeschool organizations. If you don’t have a copy, buy one today. Maybe you’ll say like Mara, a homeschool treasurer in Washington did, “I was also pleased to learn that we are doing many things right!”

 

Carol Topp, CPA

California homeschool leaders: A webinar just for you!

For California homeschool leaders: I have something special for you!
A free webinar
on

Money Tips and Traps for Homeschool Organizations

Monday December 3, 2018 at 6:30 pm California time

and
Carol Topp, CPA, the HomeschoolCPA

 

The webinar is for all homeschool leaders of co-ops, support groups, CC Communities, sports, music, clubs, etc! Whether your group is large or small, new or mature, you can learn something new or improve on what you are currently doing!
The webinar will cover:
  • Tips for managing the money in your homeschool group
  • Board duties (what leaders should be doing!) concerning money
  • What financial reports California requires
  • What reports you should be filing with the IRS
  • Money traps to avoid
  • Taxes and tax exempt status
  • Paying workers
  • Avoiding errors and embezzlement

There will also be time for your questions and answers!

The webinar will be held  Monday December 3, 2018 at 6:30 pm California time
You can join my phone, PC, Mac, iphone, iPad, etc. from wherever you are!

 

The webinar is free, but you must register to be emailed the link.

 

In addition the webinar will be recorded, so be sure to register so you get the recording link emailed to you!
If you can’t attend the live webinar, still register, so you will be sent the link to view the webinar later.

 

I hope you can join me on Monday December 3, 2018  at 6:30 pm PT
Thanks to CHEA for hosing and helping put on his webinar for homeschool leaders!

 

Register today even if you can’t join us live so you will get the link to the recording.

 

Carol Topp, CPA
HomeschoolCPA.com

Are you Confused by your Homeschool Group’s Financial Reports? Webinar for you!

Are you confused by the financial reports from your homeschool group?

You’re not alone!

In this short podcast episode (8 minutes)  Carol Topp, the HomeschoolCPA, will tell you about a webinar she is hosting on Monday October 29, 2018 at 8 pm ET.

Financial Reports for Homeschool Groups: The Good, the Bad and the Ugly

In the podcast Carol mentioned how to register for the webinar.

There is no charge for the webinar but a payment is gladly accepted to offset the cost of hosting the webinar.
https://Paypal.Me/CarolTopp/5 to pay $5.00
https://Paypal.Me/CarolTopp/10 to pay $10.00

The webinar will be recorded, so please Register so that you will be emailed the link to the video.

Like handouts? Here’s a helpful handout: Financial Reports Webinar Handout (pdf)

 

Do financial reports confuse you?

Has this happened to you?

You are at your homeschool leaders meeting. The treasurer hands out a paper showing the group’s financial status. It’s confusing, hard to read, and has weird dollar signs and labels.

You’re too embarrassed to show your ignorance about the report, so you don’t ask any questions.

Neither does anyone else.

You’re wondering, “Am I the only one who finds this confusing? No one else asked any questions, so they must get it. I’ll just keep quiet and hope for the best.”

Good news! The problem isn’t you!

It’s probably the way the treasurer is displaying the financial report.

 

I’ve seen all kinds of financial reports from homeschool groups. Many are very confusing and difficult to understand (and I’m an accountant!).

This prompted me to offer a webinar for homeschool group leaders on how to present financial reports that are clear and easy to understand to board members.

During this webinar you will learn:

  • What are the two most important reports for your board to see regularly
  • What mistakes treasurers make
  • How to read a financial report
  • Know what red flags to look for
  • Know if your organization is healthy or doing poorly
  • How to a better manager and leader
  • Use the financial report to make decisions and set goals.

You will be shown the good, the bad and the ugly of financial reports.

Join me on Monday October 29 at 8 pm ET, 7 pm CT, 6 pm MT and 5 pm PT for a one-hour webinar

Financial Reports for Homeschool Groups: The Good, the Bad and the Ugly

 

(There is no charge, but a payment is gladly accepted to offset the cost of hosting the webinar).
https://Paypal.Me/CarolTopp/5 to pay $5.00
https://Paypal.Me/CarolTopp/10 to pay $10.00

The webinar will be recorded, so please Register  so that you will be emailed the link to the video.

The advantages of attending live:

  • Time for your questions and answers from Carol (Carol charges $75/hour for a private phone consultation)
  • Interact in the chat room with other homeschool leaders
  • It will get done! I know you have good intentions to watch the video later, but sometimes it just doesn’t happen.

Register now and join us on Monday October 29, 2018 at 8 pm ET, 7 pm CT, 6 pm MT and 5 pm PT

Like handouts? Here’s a helpful handout: Financial Reports Webinar Handout (pdf)

Carol Topp, CPA

HomeschoolCPA.com

Webinar: Financial Reports for Homeschool Groups

 

I’ve seen all kinds of financial reports from homeschool groups. Many are very confusing and difficult to understand (and I’m an accountant!).

So I am offering a webinar for homeschool group leaders on how to present financial reports that are clear and easy to understand to board members.

During this webinar you will learn:

  • How to read a financial report
  • Know what red flags to look for
  • What are the two most important reports for your board to see regularly
  • What mistakes treasurers make
  • Use the financial report to make decisions and set goals.

You will be shown the good, the bad and the ugly of financial reports.

Financial Reports for Homeschool Groups: The Good, the Bad and the Ugly

 

The webinar was recorded and you can watch it on YouTube

 

Like handouts? Here’s a helpful handout: Financial Reports Webinar Handout (pdf)

Carol Topp, CPA

HomeschoolCPA.com

QuickBooks tip for homeschool groups: Sales

 

Here’s a  tip for all you homeschool groups using QuickBooks (or something similar like Apolos or Wave)

In the homeschooling world don’t usually think of our members as “customers” but that’s what QuickBooks calls them.

Members = Customers

We also don’t think of collecting registration dues or field trip fees as “sales” but that’s what QuickBooks calls it when you collect money and provide a service.

Registration Fees = Sales Income

Field Trip fees = Sales Income

Co-op Class fees = Sales Income

You should set up several categories on your Chart of Accounts for different types of Income. You may want to change the titles of Income accounts in QuickBooks to match your program. So instead of “Sales” Use “Program Income” or just plain “Income”

Make use of subaccounts under Income for things like

  • Membership dues
  • Co-op Tuition
  • Field Trips Income
My book Money Management in a Homeschool Organization  has some tips for using Quickbooks like setting up a Chart of Accounts and a who are your “Customers” and what are your “Sales.”

Carol Topp, CPA

HomeschooCPA.com

 

 

Do CC Directors pay for their own children’s tuition?

Do Classical Conversations (CC) Directors have to write a check (to themselves) for full tuition for each of their kids?

Karen-CC Director

Karen,

No. You do not have to write a check to your business for your children’s tuition. 

Here’s why:

If you pay your licensing fee based on student enrollment/tuition collected, you should track the total tuition collected including your own children in that head count. That way you is paying the correct amount for your licensing fee.

But for tax purposes, a you should NOT write your business a check for your own children’s tuition. Additionally, you do not include your child’s tuition in the income reported on your tax return (I’m assuming Karen, that you are operating your business as a sole proprietorship).

The reason is a principle in taxation called imputed income.

It states that a person should not be taxed when they avoid paying for services by providing the services to themselves.

There was a court case in 1928 that ruled that the imputed income from produce grown and eaten by a farm owner is not taxable as income to the farmer.[9]

Source: https://en.wikipedia.org/wiki/Imputed_income#cite_note-9. See Footnote 9 Morris v. Commissioner, 9 B.T.A. 1273, 1278 (1928). Accessed January 20, 2019. See footnote 9

Conclusion: Karen must keep track of the tuition she would owe for her children so that she pays the correct licensing fees, but she does not need to write a tuition check to her business and she should not report her child’s tuition as taxable income on her business tax return (Schedule C).

Carol Topp, CPA

HomeschoolCPA.com

My book Taxes for Licensed Classical Conversations Directors is available through Classical Conversations. Find it  in the Directors Licensing Guide  page 54, Appendix M and click on “this document.”

Homeschool leaders summer reading: Money Management in a Homeschool Organization

 
This summer I’m encouraging homeschool leaders to take time to become a better leader by reading through my books. This week I’m featuring my book,

 

When I originally published this book in 2008, it was a short 40 page ebook and had a horrible cover.  I was still learning and self-publishing was brand new!
MoneyMgmtCover
An update was badly needed and I tackled that project in 2014. The book ballooned to 131 pages and I subtitled it “A Guide for Treasurers.” I feel like I poured my CPA brain into this book.

 

Cover Money Mgmt HS Org
 Topics covered in this book include:
Chapter 1: Your Treasurer is a Gem!
Chapter 2: Checking Accounts Done Right
Chapter 3: Super Simple Bookkeeping Basics
Chapter 4: Show Us Your Books! Regular Reporting on Financial Status
Chapter 5: Establish a Budget: You’ll Thank Me Later
Chapter 6: Get What’s Coming to You: Collecting Fees
Chapter 7: Do I Have to Report This? Reimbursement Policies and Avoiding Taxes
Chapter 8: Using Software to Stay Sane
Chapter 9: Fraud: It Couldn’t Happen to Us
Chapter 10: Need More Money? Easy Fundraisers for Homeschool Organizations
Chapter 11: Risky Business: Insurance for Homeschool Groups
Chapter 12: Paying Workers: Hiring Employees and Independent Contractors
Chapter 13: Homeschool For Profit: Running a Homeschool Group as a Business

 

 

 

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

 

Fraud in a homeschool group

HandsWithCash

 

I received a phone call from a homeschool support group leader that broke my heart. She had just learned that 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.

The leader saw a few things that tipped her off:

  • The treasurer’s business income had taken a recent financial hit making his personal finances in trouble.
  • No budget was created.
  • The treasurer was not detailed oriented.
  • The treasurer did the bank reconciliation, so no one else saw the bank statements.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.
  • 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:

  • Consulting with a lawyer about criminal prosecution.
  • Pursuing restitution from the treasurer.
  • Using a bank account with on-line access for visibility.
  • Having someone besides the treasurer do  the bank reconciliation.
  • Creating a budget.
  • Amending bylaws and policies to add accountability. The treasurer will be required to make financial report at every meeting.

I hope you never 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.

I also offer an excerpt from the book, a list of Recommended Financial Practices in the Chapter titled Fraud: It Couldn’t Happen to Us. It’s so important that your homeschool group put in place good financial oversight that I’m offering that part of the book at no charge.

Carol Topp, CPA

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