I started up a group of a few families last year as a homeschool co-op in our community. As we have grown a little more this year, I would like to start up a checking account.
My question is, after I get an EIN and open the checking account for the co-op, what is required at tax time, if anything, for having that account?
I don’t want to be recognized yet with the IRS as a 501c3, just for sake of simplicity at this time. Am I going to be required to do anything because of having this checking account?
We do not pay teachers, the account is strictly for fees and supply costs.
This semester we will only be taking in about $2,500 at max. and that is stretching it.
Thank you for your advice.
I have answered your questions in some blog posts that you may find helpful:
The last blog post explains you have a few choices if you collect money and provide a service:
- Stay small and self declare 501c3 tax exempt status. This is the simplest option and the one I recommend for Callie’s organization.
She will have to call the IRS once to self-declare her 501c3 status and get added to the IRS Exempt Organization database so the group can file their annual IRS Form 990-N.
- Consider another tax exempt status such as 501c7 social club. This is applicable to support groups or clubs, but not for Callie’s homeschool co-op.
- Apply for 501c3 status, especially if annual revenues exceed $5,000/year. I can help with that.
- Pay taxes as a for-profit business. That’s the least simple way to go! I don’t recommend it!
If you are starting or running a tiny homeschool program (usually less than $5,000 in income in a year), then you’ll benefit from my resources and podcast series for Tiny Homeschool Groups.
Tips for Starting a Tiny Homeschool Group