How to report income earned from teaching at a homeschool co-op

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Hi Carol. Thank you for all the help you have already given our homeschool community!
As a teacher at a homeschool co-op that allows teachers to charge the parents $45 per student, how would I report any net income on my income tax return? Payments are made directly to me as the teacher.

Best regards, Lynn (New York)

Lynn,

You report all your income and all your expenses from teaching at a homeschool co-op on a Schedule C or the shorter form Schedule C-EZ as part of your federal Form 1040.
The net amount is carried onto page one of your 1040 (line 12 Business income) and added to other income from W-2s etc.

If you made more than $400 in net income (profit) you will also have to fill in a Schedule SE and pay Self-employment tax (it’s the same as Social Security and Medicare taxes) on Line 56.

Hope that helps!

Carol Topp, CPA

Starting a homeschool program to help disadvantaged children

Hello,
I am interested in starting something similar to a (homeschool) co op only I am not sure if it actually qualifies as a homeschool co op.  My idea is that there are many children who have learning disabilities, medical conditions and others whose parents would like to homeschool but cannot because of economic reasons.
Therefore, I decided to set up a homeschool program where teachers, non-teachers, parents etc join together and teach groups of students that range from distinct ages and grades. I was also considering paying these parents instead of having them work voluntarily because some of them do have financial needs.
I have been a teacher for over ten years and have a masters degree in administration and supervision and I would like to help these students and parents.
I would be charging an annual and monthly fee in order to economically sustain the homeschool.
I would greatly appreciate your input.
Thank you,
Angela

 

Angela,

Thank you for contacting me.What you’re describing sounds more like a homeschool supplement program.

I have several blog posts advising  people like you who want to offer services to homeschool parents.
http://homeschoolcpa.com/is-it-a-homeschool-co-op-or-mary-poppins/
http://homeschoolcpa.com/can-i-hire-a-homeschool-governess/
http://homeschoolcpa.com/homeschooling-other-peoples-children-is-it-legal/

1) The first thing to do is to find out if  what you want to do is legal under the homeschool laws of your state. Some states limit how much or how often a non-parent can instruct the student and still be considered homeschooling.

2) Then you need to determine if your idea is economically viable. You mentioned offering to pay parent/teachers, but also wanting to offer services to economically disadvantaged families. So who will come and pay the fee? Sounds like you need a detailed business plan with financial projections.

3) Next you need to determine if this is a nonprofit educational program or a for-profit business. A nonprofit requires assembling a board, creating bylaws, filing for nonprofit incorporation in your state and tax exempt status with IRS.

Forming a for-profit business is easier, but then you are not eligible for donations, grants, etc that you may need to be financially viable.

That’s a lot to think about. There’s still a lot to be decided including how often your plan to meet and where.

Let me know if you would like to discuss your ideas in further detail.

Carol Topp, CPA

Can I hire a homeschool governess?

Jane Eyre Pictures, Images and Photos

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Dear Ms. Topp,

I found your website while trying to research information on hiring a private homeschool instructor for a friend of mine.  She’s a single parent who adopted a now 12-year-old girl.  She’s having a little bit of a problem in public school and I thought it might be a good idea to homeschool her for her middle school years.

Can you point me to some information on whether my friend can  hire a homeschool instructor to work with her daughter?  I know this may sound crazy, but I keep thinking what her daughter needs is a governess.  Or maybe I’ve read too many Bronte and Austen novels.  Any help you could provide would be most appreciated.

Sincerely,

Gordon

 

Gordon,

I think you are absolutely correct in using the term governess to describe your friend’s situation.
I have a blog post titled “Is It a Homeschool Co-op or Mary Poppins?” that addresses a similar question.

I have been asked questions similar to yours several times, so it not an unusual idea. It is quite an old idea as you reference (Jane Eyre is a favorite!)

I would direct your friend to do research in three areas:
1. Her state homeschool laws and see if a non-parent is allowed to instruct a child. I imagine it is allowed, she may just have to report the governess’ name and subjects covered on an annual basis (we do here in Ohio, for example)

2. Employer laws in your state.  A local CPA would be helpful here. The governess may be considered a household employee and that has easier tax reporting requirements (like annually, not quarterly filing).  Employer taxes (Social Security and Medicare) will need to be paid.

3. Perhaps consult with an attorney to draw up an employment agreement.  Perhaps a professional tutor or nanny/au pair service in your area may have sample agreements to use as a guide.

I hope that helps!

Carol Topp, CPA