What to do with a large gift from my co-op?
January 2, 2010 · Print This Article
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
I’m glad my website and book have been helpful. You sound as if you have a great group and I’m sure they appreciate you!
Your gift is an honorarium and is considered taxable income. The co-op should issue you a 1099MISC (if you are considered an independent contractor) or a W-2 if you are an employee. Since this was a gift taken up from the families, it sounds like an honorarium (to an IC) and not a salary to an employee.
If you use the payment on co-op related expenses (like the convention), then you could claim those expenses on your tax return. At the end of 2009, you should fill out a Sch C (Business Income), claim the $700 as income and then list any expenses like the convention fee, mileage and hotel costs. You may break even or show a small profit.
In retrospect, it might have been better if the Board gave you a nice note saying that you won an all expenses paid trip to the convention and use the co-op’s debit card to pay the expenses. These expenses would not be considered taxable income to you if you are a volunteer or an employee. If you are an independent contractor (and it sounds like you might be), then all fringe benefits (like the hotel cost) are taxable income and should be added to the 1099MISC. 
I hope that’s not hopelessly confusing!
Share this with someone
Related posts:
Comments
Got something to say?