In this episode of the Dollars and Sense Show host Carol Topp discusses
What is tax exemption and how do I get it for my homeschool group?
In this episode, Carol discusses who is eligible for tax exemption (you might be surprised!), the benefits of tax exempt status and the disadvantages.
Your homeschool group may be a nonprofit and not know it! What makes your group a nonprofit?
- Organized as a nonprofit: board run, bylaws, nonprofit incorporation or unincorporated association
- Operate as a nonprofit: no profit motive, have a charitable purpose (education), serve a charitable class (children), no inurement (sharing of the group’s money with individuals)
Benefits of tax exempt status:
- no tax to pay on your surplus,
- can accept tax deductible donations,
- may be eligible for grants,
- some fundraisers like Box Tops only open to tax exempt organizations
Costs of tax exempt status:
- IRS application fee,
- nonprofit incorporation in your state.
- Regular reporting to the IRS and your state.
Different types of tax exempt status for homeschool organizations:
- Support groups: 501(c)(7) social club
- Homeschool co-ops: 501(c)(3) educational organization
On the show Carol mentioned several resources:
- Tax exempt status for homeschool support groups
- Checklist for tax exemption for homeschool groups
- The required IRS annual reporting Form 990N
- The IRS and Your Homeschool Organization book