Should a volunteer get a W-2 for their taxable fringe benefits?

I am confused by a few statements in your book Paying Workers in a Homeschool Organization.  You say that a volunteer who receives tuition discounts and gift cards would have to report the income for tax purposes, but she would not receive a W-2.  However, you state that a homeschool organization should keep track of the total amount of compensation for volunteers, “including reduced tuition or fee waivers,” and would need to give them a W-2 or 1099-NEC form to report the taxable income. 

Does the organization need to issue a W-2 or not? 
Is there a minimum amount of compensation at which the W-2 must be issued?  And, if it must be issued, why not just write a paycheck to the volunteer?
Erika

Erika,

Well, it’s tricky isn’t it?

A volunteer doesn’t have an employment agreement with the homeschool group. That’s why she won’t get a W-2. But a volunteer who receives more than insignificant compensation has compensation that should be reported on her tax return as taxable income. Perhaps it would be recorded as Other income or as Business Income on Schedule C of her Form 1040.

The homeschool organization needs to give W-2s to people with whom they have an employment agreement and then must add to that W-2 any taxable compensation that was in the form of tuition discounts, gift cards, etc.

Similarly, the organization needs to give 1099-NEC to people with whom they have an Independent Contractor agreement and add to that 1099-NEC any taxable compensation that was in the form of tuition discounts.

You asked, Is there a minimum amount of compensation at which the W-2 must be issued?”

No. I’ve seen W-2s for less than $20 when a teenager worked only a few hours and quit.

  And, if it (W-2) must be issued, why not just write a paycheck to the volunteer? 

Because volunteers don’t get paid.

And a hiring an employee involves more than just writing a check and giving them a W-2. It involves FICA and Medicare withholding, quarterly statements to the IRS and state governments, workers comp, unemployment insurance, etc.

What most homeschool groups do

In general, most homeschool organizations avoid the confusion by not giving volunteers significant, taxable benefits like large tuition discounts. They keep their volunteer appreciation insignificant and not taxable (like priority registration, small discounts, appreciation dinner or small tokens of appreciation like coffee mugs). Or they hire employees and then the workers are no longer volunteers.



Carol Topp, CPA
HomeschoolCPA.com
Helping Homeschool Leaders

Volunteer board members are not held liable

I just learned (through TheRoysReoprt) that volunteer nonprofit board members are frequently immune from any liabilities facing the nonporift.

Compensated board members may not have that same protection. That’s one of the reasons why many nonprofit experts discourage paying board members.

I frequently explain to homeschool group leaders that board members in a nonprofit should not be compensated. There are lots of good reasons for that and here’s one more:

Serving as a volunteer board member means that you will not be held liable for civil lawsuits, injuries, deaths or loss.

This volunteer protection may vary by state. I’m in Ohio and Ohio laws says this:

A volunteer is not liable in damages in a civil action for injury, death, or loss to person or property that arises from the actions or omissions of any of the officers, employees, trustees, or other volunteers of the charitable organization for which the volunteer performs services…”

https://codes.ohio.gov/ohio-revised-code/section-2305.38

Now almost all laws have caveats, so read the full law in context.

https://codes.ohio.gov/ohio-revised-code/section-2305.38

A volunteer is not immune from liabilities if:

  • With prior knowledge of an action or omission of a particular officer, employee, trustee, or other volunteer, the volunteer authorizes, approves, or otherwise actively participates in that action or omission.
  • After an action or omission of a particular officer, employee, trustee, or other volunteer, the volunteer, with full knowledge of that action or omission, ratifies it.
  • An action or omission of the volunteer constitutes negligence, willful or wanton misconduct, or intentionally tortious conduct.

In other words, knowingly committing an action or omission, being grossly negligent, or willful misconduct (to name a few) is not immune from liability, even for a volunteer.

So do you job as a board member, manage the organization well, put the interests of the organization before your own, and don’t lie, cheat or steal!


You might find my Board Member Manual helpful as you understand board duties. It’s a template for organizing your nonprofits important papers and a board training manual.

Carol Topp, CPA
HomeschoolCPA.com
Helping Homeschool Leaders

Homeschool mom has concerns about Classical Conversations

I’ve written several blog posts answering questions from Classical Conversations (CC) Directors regarding:

Usually these issues affect CC Directors the most since they are the business owners that carry the responsibility and liability for operating a licensed CC Community that is compliant with local, state, and federal laws.

But sometimes the individual families in a CC Community are affected by these issues as well.

Homeschool blogger at As for Me and My Homestead, Jamie, wrote a blog posts titled, “Why My Family Left Classical Conversations.” In her post she outlines several reasons her family left CC after four years.

If you scroll to the end, she explains several business practices that she found concerning enough to make the decision to leave behind a group of homeschool families she deeply enjoyed and loved.

Through all the rest of this, I pushed the nagging, “something isn’t quite right” issues out of mind, and tried to focus on the positives.  Fortunately for me, the person who brought the errata sheet to my attention also invited me to join a Facebook group where I learned more about Classical Conversations that went beyond the mistakes and poor curriculum.

Jamie writes about several issues that bothered her including:

  • CC Corporate calling themselves (and the Directors’ businesses) a “ministry,” which can be misleading
  • Communities (as for-profit business) using churches
  • Misclassifying tutors as Independent Contractors
  • CC Corporate and local Directors using teenagers and parents as volunteer labor

She calls these issues “the tip of the iceberg.”


It’s never easy to publicly criticize a homeschool program, especially if your friends are still enthusiastic about it.

Jamie ends her post with this wish:

My hope is that in reading this, other families will see that CC is a corporation that is not operating in a godly manner, while claiming the name of God, and will find out that they could do so much better with their money & time, than join a CC community.

Carol Topp, CPA
HomeschoolCPA.com
Helping Homeschool Leaders

Paying Volunteer Teachers

A homeschool leader asks if the way her group pays volunteer teacher is legal.

Holly, a homeschool group leader emailed HomeschoolCPA Carol Topp this situation:

“I need guidance on the method with which our organization’s volunteers are paid teacher fees. We are collecting cash from all the members for their children’s class fees, and redistributing it to the teachers for their class payment.

Apparently this is being done to simply the process and so members do not have to write checks. I am concerned this is an illegal practice.”

Listen as Carol explains:

  • Whether this is legal
  • Are these teachers really volunteers?
  • Should the teachers be employees or Independent Contractors?
  • What Holly’s organization needs to do regarding paying teachers
  • A simpler option

Featured Product

In the podcast I mentioned my book

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.

What’s a Good Way to Handle Conflicts in a Homeschool Group?

 

Conflict, hurt feeling, gossip, even bullying. Does it happen in your homeschool group Probably!  What can you do about it?

In this short podcast episode (13 minutes)  Carol Topp, the HomeschoolCPA, interviews homeschool leader Anjoli Gallo. Anjoli runs a group in southern Florida and she shares insight into dealing with conflict.  But she also shares some great tips on how she manages her time so leading a group doesn’t take over her life.

In the podcast Carol mentioned the I Am a Homeschool Group Leader Facebook Group. It is a closed group (meaning you have to request to join) of 530 homeschool leaders from across the USA. You can join us here: https://www.facebook.com/groups/72534255742/

 

Is there conflict in your homeschool group? Need help managing the volunteers in your organization? Carol Topp’s book Homeschool Co-ops: How to Start Them, Run Them and not Burn Out has a chapter devoted to managing volunteers and conflict!

 

Homeschool Co-ops:
How to Start Them, Run Them and not Burn Out

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!

 

Carol Topp, CPA

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Summer reading for homeschool leaders: Homeschool Co-ops

 

This summer, I’ll be featuring one of my books for homeschool leaders every few weeks.

This week it’s my first book for homeschool leaders,

 

I published this book in 2008 with a different cover. In 2013 I updated it and chose a new cover.

 

HomeschoolCo-opsCover

Original cover

HS Co-ops Cover_400

Updated cover

This book will help homeschool leaders start and run a homeschool co-op.

It has chapters on:

Part One: Starting a Homeschool Co-op
Chapter One: Benefits of Co-ops
Chapter Two: Disadvantages of Co-ops
Chapter Three: Different Types of Co-ops
Chapter Four: Your First Planning Meeting
Chapter Five: What’s in a Name? Names, Missions

Part Two: Running a Homeschool Co-op
Chapter Six: Leadership
Chapter Seven: Co-op Offerings
Chapter Eight: Money Management
Chapter Nine: Managing Volunteers and Conflict
Chapter Ten: Ready for the Next Step? 501c3 Tax Exempt Status

Part Three: Not Burning Out
Chapter Eleven: Avoiding Burn out

Read a sample chapter

Read more about Homeschool Co-ops the book

 

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Paying Volunteers Q&A with Homeschool Leaders

 

Can you pay a volunteer?

This short podcast episode (15minutes) from Carol Topp, the HomeschoolCPA, is the last excerpt from the Homeschool Leaders Retreat held in Indiana.

Carol Topp discusses how to pay (or thank) a volunteer and paying teachers in a homeschool co-op without causing tax problems for your volunteers (or your church host).

 

I mentioned my book

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.

 

Carol Topp, CPA

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Why Do Volunteers Quit?

 

Why do volunteers quit or leave your homeschool organization?Do you know?

I was thrilled to meet Beth Mora of www.HereToHelpLearning.com  at a homeschool convention. That’s me on the left and Beth on the right with Melanie Young of Making Biblical Family Life Practical podcast in the middle.

In this short podcast episode (11 minutes) I interview Beth who offers tips on understanding reasons why volunteers leave your homeschool group.

 

Beth’s entire workshop on Recruiting and Retaining Volunteers is available at https://www.alliancerecordings.com/?context=&cid=61.

The notes from Beth’s workshop on motivating volunteers is available at https://HereToHelpLearning.com/Notes

 

Carol Topp, CPA

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Background checks for homeschool organizations

A homeschool leader on the Homeschool-Life Leaders Forum asked,

Could you share what companies you use to do background checks for your organization?

 

Here are some of the companies that homeschool groups use for doing background checks on employees and volunteers:

Protectmyministry.com

We have used ClearStar.net for several years. They charge $7.95 for a basic criminal background check. Our members can fill in their own information, so we don’t have to deal with paperwork and shredding personal information.

We use Federal Background Services. very reasonable and efficient

My co-op uses SecureSearchPro.com. They charge us about $14/check. They customized our background search to fit our specific needs. They bill us on a monthly basis. I really like them, they are easy to use, members fill out an online form so I never have to gather their personal information.

 

Many states now require background checks on any individuals working with children. You church host may require background checks as well. So the companies mentioned above may be very helpful to you in running your homeschool programs.

 

Carol Topp, CPA

HomeschoolCPA.com

Helping homeschool leaders

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:

payingworkerscoveroutlined

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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