We live in California and started a homeschool group about 5 years ago. We average about 80 families a year. We are strictly social/support, not a co-op. We have different clubs that meet once a month. These are taught by moms who want to and all parents stay and participate. We also have parties and take field trips together.
We do collect $20 a year per family to off-set the cost of parties and clubs so that no one person has a financial burden. We have kept things simple all of this time and operate on a cash only basis. We carry over a balance to make sure that our kick-off parties are paid for. We collect approx. $1600.
My question is- Am I doing everything legally? It is my intention to make sure I am being legal. I would like to continue to keep things this simple 🙂
I have had some doubt due to the homeschool co-op in town that has a 501 (tax exempt status) and charges members higher prices due to church rental and insurance. However, I have been questioned why we don’t have to do that?
Any insight would be helpful.
I think you’re understanding things correctly and doing many things just fine for a group of your size. 🙂
Technically, your support group would be considered an unincorporated association and the IRS would probably classify it as a 501c7 Social Club. I discuss Social Clubs on these two blog posts:
Are Homeschool Support Groups Automatically Tax Exempt?
Compare 501(c)(3) Charity to 501(c)(7) Social Club
Homeschool co-ops are different from support groups. Co-ops do not usually fit the definition of 501c7 Social Clubs; They exist for more than just social reasons; they have an educational purpose. In additional co-ops collect more money than support groups and so they look into 501c3 status as a tax exempt educational organization.
So, Vanessa, you can tell people who ask that support groups and co-ops are different. The link above compares the two.
Carol Topp, CPA