If teachers are paid directly how does the homeschool co-op know about who has paid in order to keep track of payments?
It’s very common got homeschool co-ops and tutorial programs to ask parents to pay the teachers directly and not pay through the co-op or homeschool tutorial. This eliminates payroll paperwork and lessens the income and financial transactions flowing through the homeschool organization (and this makes life easier on your treasurer!).
Your homeschool co-op doesn’t need to keep track of which families paid the teachers. It’s the teachers job to get payments from the families.
The teachers are independent contractors and therefore are supposed to bear the burden of the risk of not getting paid. Your co-op should not carry this risk.
The IRS definition of an independent contractor says “Having the possibility of incurring a loss indicates that the worker is an independent contractor.”
I hope that helps,
Carol Topp, CPA