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The IRS and Your Homeschool Organization
The IRS and Your Homeschool Organization
The IRS and Your Homeschool Organization
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The IRS and Your Homeschool Organization

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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?

The answers are in this book: The IRS and Your Homeschool Organization.

The information will be helpful to homeschool support groups, co-ops, music and sports groups and will help you to 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 What is the difference between nonprofit incorporation and tax exemption
IRS requirements after you are tax exempt

Also covered are non profit incorporation, the application process, and how to maintain tax exempt status.

Written specifically for homeschool groups.

Author Carol Topp is a CPA and and homeschooled her daughters, both homeschool graduates for 14 years. She now helps homeschool leaders obtain tax exempt status for their organizations.

LanguageEnglish
PublisherCarol Topp
Release dateOct 29, 2011
ISBN9781465981998
The IRS and Your Homeschool Organization
Author

Carol Topp

I’m Carol Topp a CPA (Certified Public Accountant) specializing in tax preparation, small/micro business accounting, and nonprofit accounting. I work from my home office in Cincinnati Ohio. I also enjoy public speaking, writing magazine articles and helping nonprofit organizations.

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    Book preview

    The IRS and Your Homeschool Organization - Carol Topp

    The IRS

    and

    Your Homeschool Organization

    Tax Exempt 501(c)(3) Status For Homeschool Organizations

    By Carol L. Topp, CPA

    Copyright © 2011 by Carol L. Topp, CPA

    All right reserved

    ISBN-13: 978--1-4659-8199-8

    BISAC: Education / Home Schooling

    No part of this book may be reproduced without written permission of the author except for brief quotations and for reviews

    Smashwords Edition, License Notes

    This ebook is licensed for your personal enjoyment only. This ebook may not be re-sold or given away to other people. If you would like to share this book with another person, please purchase an additional copy for each recipient. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.

    Disclaimer and Limitation of Liability

    This book is designed to provide accurate and authoritative information about the subject matter covered. The author is not rending legal, accounting, or other professional advice. Any tax advice contained in this book was not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions. Furthermore, this book was not intended or written to support the promotion or marketing of any of the transactions or matters it may address.

    Please visit www.HomeschoolCPA.com or e-mail the author at Carol@HomeschoolCPA.com

    Table of Contents

    Introduction

    Chapter One: The IRS and Homeschool Organizations

    Homeschool Contact With The IRS

    Government Intrusion into Homeschoolers' Lives

    Historical Perspective on Charities and Taxes

    Does Tax Exempt Status Limit Homeschool Freedoms?

    Chapter Two: What Does 501(c)(3) Mean?

    Definition

    Support Groups

    Comparison of 501(c)(3) Qualified Charity and 501(c)(7) Social Club

    What if We’re Not a Charity?

    Can My Homeschool Be Tax Exempt?

    Chapter Three: Benefits and Costs of Tax Exempt Status

    Common Non Profit Forms

    Benefits of 501(c)(3) status

    Disadvantages 501(c)(3) status

    Chapter Four: Alternatives to 501(c)(3) Status

    File for 501(c)(3) Qualified Charity Status

    Determine Eligibility of Other Tax Exempt Status with the IRS

    Reorganize Your Group to Stay Small

    Pay Taxes

    How to Decide What to Do

    Chapter Five: What Does Your State Require?

    Secretary of State’s Office

    Attorney General's Office

    Department of Revenue

    Chapter Six: 501(c)(3) Status: What Is Involved?

    Are You Ready?

    Writing a Mission Statement

    Establishing a Board of Directors

    Writing By Laws

    Chapter Seven: Nonprofit Incorporation: Do You Need It?

    What is Incorporation

    Do You Need to Incorporate?

    What Does Incorporating Involve?

    Choosing Your Name Carefully

    Seven Great Reasons to Incorporate

    Chapter Eight: Check List for Homeschool Organizations Seeking 501(c)(3) Tax Exempt Status

    Chapter Nine: The Application Process

    IRS Form 1023

    Narrative

    A Board and Bylaws

    Financial Statements

    Chapter Ten: We’re Tax Exempt! Now What?

    Annual Reporting to the IRS and Your State

    Unrelated Business Income Tax

    Disclosure Requirements

    Donations

    Political limitations

    Conflict of Interest

    Chapter Eleven: Resources

    Appendices

    Sample Mission Statements

    Sample Bylaws

    Sample Articles of Incorporation

    Sample Conflict of Interest Policies

    About the Author

    ***

    Introduction

    As the homeschooling movement grows, so do our support groups, co-ops, music and sports programs! This growth means more organization and more structure and needed for homeschool groups.

    Perhaps your group has grown and your are wondering if you have any obligation to the IRS. Perhaps your board is asking about being officially recognized as a nonprofit organization. You’ve heard terms like ‘nonprofit,’ ‘tax-exempt’ and ‘501(c)(3).’ Do you understand what they mean?

    You may wonder what nonprofit status might mean for your group-good and bad. What are the benefits? What will it cost in dollars and time? Is it needed? Is your group ready?

    This book will help you sort out the decisions you need to make. I will discuss the different types of homeschool groups and when they need to worry about taxes and the IRS. I'll explain the pros and cons of being a nonprofit corporation and obtaining 501(c)(3) tax exempt status.

    Unlike other books on this subject, I am writing specifically to homeschool organizations. I know how they operate and understand their mission. I also know what it is like to be a homeschool leader. You want clear answers and don’t have time to read a lot of books or websites. You have no desire to become an expert in nonprofit law because your just want to run a program that benefits homeschooling families.

    My goal in this book is to clear the confusion and offer practical assistance. I hope you find it helpful.

    Carol Topp, CPA

    Cincinnati, Ohio

    ***

    Chapter One: The IRS and Homeschool Organizations

    I'm a homeschool leader and I'm wondering if my group is supposed to be paying taxes to the IRS.

    What happens when a homeschool group makes a profit? Do they owe taxes? Is there paperwork with the IRS? Should we hire an accountant?

    Homeschool leaders frequently ask questions like the ones above. They are concerned about paying taxes and filing forms, but unlike personal income taxes, homeschool leaders are in unfamiliar territory. They are unsure if their homeschool group is a business or a nonprofit organization and question whether being a nonprofit means they do not owe any taxes. Leaders wonder what their involvement should be with the Internal Revenue Service (IRS).

    Homeschool Contact With The IRS

    There are several situations when a homeschool organization should be in contact with the IRS:

    Your homeschool group opens a checking account and needs a tax identification number.

    Usually the first contact a homeschool organization has with the IRS is getting an Employer Identification Number (EIN). Most banks now request an EIN when a group opens a checking account. An EIN is similar to a Social Security Number for a business or nonprofit organization. They are available from the IRS at no charge at ww.irs.gov.

    Your homeschool group pays a worker.

    Your worker may

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