Carol Topp, the Homeschool CPA, is frequently asked by small homeschool groups if they are setup up correctly.
Do they owe taxes?
Do they need to be a nonprofit corporation?
Henry writes, “Can a small homeschool education club focused on speech and debate be categorized as an “unincorporated association” and therefore not apply for recognition by the IRS and not file taxes?
Less than $2,000 pass through the club to pay for insurance and facilities…
This club formed in 2015 and I joined last year and become the director this year. I am wondering if we are structured correctly…”
Listen to Carol’s reply to Henry’s questions on today’s episode of the Homeschool Leader podcast.
- Can the Speech and Debate Club be a 501c3?
- Do they need to be a formalized entity?
- Should they get an EIN?
- What should they do to be structured correctly?
- Do they owe taxes?
In the podcast, Carol mentioned how a small nonprofit like Henry’s club can self-declare 501c3 tax exempt status. Carol has a few blog posts on self-declaring 501c3 tax exempt status and the filing the IRS annual notice, Form 990-N:
https://homeschoolcpa.com/how-to-get-added-to-the-irs-database-and-file-the-form-990n/
https://homeschoolcpa.com/irs-form-990n-faq/
In the podcast I mentioned my book The IRS and Your Homeschool Organization
Does your homeschool group need to pay taxes? Could they avoid paying taxes by being a 501c3 tax exempt organization? Do you know the pros and cons of 501c3 status? Do you know what 501c3 status could mean for your homeschool group?
I have the answers for you in my book The IRS and Your Homeschool Organization. The information I share in my book has been helpful to homeschool support groups, co-ops, music and sports groups and will help you understand:
- The benefits of 501c3 status
- The disadvantages too!
- What it takes to make the IRS happy
- What your state requires
- Why your organization should consider becoming a nonprofit corporation
- What is the difference between nonprofit incorporation and tax exemption
- IRS requirements after you are tax exempt
The webinar Create a Nonprofit for Your Homeschool Community is also helpful.
The webinar is 90 minutes and covers:
- The difference between a business and a nonprofit
- What are the advantages and disadvantages of being a nonprofit
- Forming a board: who can be one it, what do they do, etc.
- Creating bylaws
- Drafting a budget
- Setting up a bank account
- Forming a nonprofit corporation in your state
- The timeline to get this all done
- The expense to accomplish this
