I presented these two training sessions live in September 2024 during the day, but these sessions will be in the evening! That is to accommodate homeschool leaders who are usually homeschooling their children during the day.

Monday March 24, 2025 at 8 pm Eastern Time, 7 pm CT, 6 pm MT and 5 pm PT

Monday March 31, 2025 at 8 pm Eastern Time, 7 pm CT, 6 pm MT and 5 pm PT

The events will be live. It will not be recorded. But the slide handout will be sent to you. And a chat feature allows you to ask questions.

It’s free. The Foundation’s goal is to provide training to homeschool group leaders free of charge, you just have to commit the time.

REGISTER HERE

The topics I will cover:
Part 1 (on Monday March 24, 2025 at 8 pm ET/7 pm CT for two hours)

Funding Sources

• Types of homeschool group
• Setting tuition and discounts
• Donations
• Fundraisers
• Grants

Budgeting

• Chart of Accounts
• Creating a budget

Financial Reports for Homeschool Groups

• Profit and Loss better called Statement of Activities
• Balance Sheet better called Statement of Financial Position
• Helping your board understand a financial report

Part 2: Financial Practices (on Monday March 31, 2025 at 8 pm ET/7 pm CT for two hours)

Financial Practices

• Record keeping
• Reimbursement: Accountable plans
• Collecting early deposits for next year
• Paying workers as employees or independent contractors
• Thanking volunteers

Preventing Fraud

IRS and State taxes

• Tax exempt Status
• Maintaining tax exempt status
• Annual reports to your state

REGISTRATION LINK

____________________________________

Carol Topp, CPA

HomeschoolCPA.com
Helping Homeschool Leaders

The post LIVE webinar on Financial Management for Homeschool Groups at no cost to you but your time! appeared first on HomeschoolCPA.com.

Hello,
I am wondering whether you have any guidelines about a good amount of cash to keep in reserve, or what to use as a basis for determining the amount of cash. We have a substantial surplus, growing every year despite our efforts to price classes at a close-to-break-even rate.
Thank you!
-Shaun S in Minnesota

Shaun,

What a wonderful position to be in-cash reserves growing each year! Many for-profit businesses are not doing that well!

It’s a little difficult to be specific without knowing how you operate, such as do you collect all fees at the start of the semester or do you operate month to month.  Can families drop out or join mid semester? Do you offer refunds of fees paid if a family drops out? etc…

Basically, the tighter you run your cash flow (i.e., only collecting a month at a time), the more you need in reserve.

I recommend that you look at your sources of income.  Imagine any one item being eliminated, such as a major fund raiser. How would you run your co-op without that source of income? Sometimes when a nonprofit loses a major source of funding, it needs to fall back on cash reserves for a while.

Here are a few guidelines to help you determine the amount of cash reserves needed:
1. Have at least 10%, maybe 15% of your income in reserve for emergencies, damages or disasters.
2. Have at least one or two month’s rent in reserve in case you need to move locations.
3. If you pay employees, have at least three months of their pay  in reserve.
4. Consider creating a future plan of major purchases (like a computer or software) or programs you’d like to offer. Your surplus could be applied to your “wish list.”
5. Have at least enough in reserve to cover the deductibles on your liability and medical/accident insurance.

Here are a few ideas of what to do with your cash surplus:
1. Offer reduced fees to hurting families. In my homeschool co-op, we have a widow and another family with a disabled father, so they get free access to our co-op classes.
2. Offer reduced fees for significant volunteer efforts. We offer teacher discounts and discounts to our co-op director.
3. Make a contribution to the location you are renting if  it is a church or community organization.
4. Have an end of year party with a catered dinner.
5. Give appreciation gifts to all your volunteers.

For more details on managing money in a co-op, I suggest referencing my book: Money Management in a Homeschool Organization.

I hope that helps!

Carol Topp, CPA

HomeschoolCPA.com

The post What amount would be good to keep in savings to keep our homeschool co-op running? appeared first on HomeschoolCPA.com.

Hi Carol,
Our (homeschool group’s) yearbook is looking to take in the money through my personal PayPal account, then deposit it into a separate bank account so that our group does cross over the $5,000.00 mark. How is this done so that I don’t have to claim the money as extra income?
Currently, the group set up the PayPal account as a non-profit and now Paypal wants proof of this and we don’t have it. I suggested that they explain to Paypal that we are a Unincorporated Non-Profit Association.
Sandy in TX

Sandy,

The ideal way to operate is to set up a PayPal account for the Association/Homeschool Group and not run anything through your personal PayPal account. I understand from other homeschool leaders, that PayPal expects to see proof from the IRS of tax exempt status. They may also accept a nonprofit incorporation certificate from your state. They told one homeschool group they would accept “certified Articles of Incorporation.”

If you continue to use your personal PayPal account for the homeschool group’s revenues, then you may receive a Form 1099-K from PayPal stating how much money you were paid. A copy goes to the IRS and the IRS expects you to report this income on your tax return!

So stop using your personal PayPal account.

If your nonprofit is receiving more than $5,000 in gross revenues in a year, it’s time to file the Form 1023-EZ and apply for tax exempt status.

This webinar will help you do that.

https://homeschoolcpa.com/bookstore/webinars/501c3-application/

Carol Topp, CPA

The post Using PayPal For Payments In A Homeschool Co-op appeared first on HomeschoolCPA.com.

I know that the board members of a homeschool groups are hard-working people.  They not only homeschool their own children, but they organize support groups and co-ops to help other homeschool families.  Sometimes a homeschool group would like to “reward” these generous individuals.

Is it OK to compensate your board members?

A homeschool co-op in the Midwest contacted me recently to apply for 501c3 tax exempt status.  The Treasurer told me that her co-op had been paying their leaders anywhere from $200-$1,200 a year for their service on the board.  I discussed why paying board members was not a typical practice.  Here is some of what we discussed:

• Payments to board members can create a conflict of interest. Does the loyalty of the leader lie in herself or in the best interests of the group?
• Paying board members can call into question the duty of loyalty of the board member.  Is she acting in the best interest of the group rather than a personal, financial interest?
• Payment could compromise the leader’s duty of care. A leader should act in good faith, with the care an ordinary, prudent person would exercise and with the best interest of the group in mind.
• Payments on nonprofit boards is not a typical practice.  Charities do not usually compensate their board members. Their funds usually go back into the program. Board members serve because they have a passion for the mission and a concern for the members.
• Board payments can undermine the volunteer spirit of other members. Why should a member volunteer her time when others are paid for their efforts?
• Paying a board member can cause dissension and a sense of injustice or imbalance in the group. In this particular case the payments did not have member approval. The board voted themselves compensation, but never put the idea to a member vote. This could be considered inurement  which is forbidden for 501(c)(3) tax exempt organizations and could put the organizations tax exempt status at risk.
• Paying board members involves correctly classifying them as employees (if they are officers) or independent contractors (board members at large). The classification is a matter of IRS law, not your choice.

This group has wisely decided to stop payments to board members. I think the group will be better served by an all-volunteer board and healthier in the long run.

You can pay board members, but the income is taxable income. My book Paying Workers in a Homeschool Organization explains the correct way to pay board members as employees or independent contractors and alternative tax-free ways to thank your hard-working board members.

Carol Topp, CPA

HomeschoolCPA.com

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The post IRS concerns: what happens if you compensate homeschool board members? appeared first on HomeschoolCPA.com.

Slide Handout for Part Two covering money tips, fraud and annual reports to IRS and state

Recommended reading

Money Management in a Homeschool Organization by Carol Topp, CPA

Rethinking Sustainability: A Strategic Financial Model for Christian Schools by Dr Alan Pue https://a.co/d/4gB6W1G

The post Handouts for Fundamentals of Financial Management for Homeschool Groups appeared first on HomeschoolCPA.com.

• What tax form should I to use to report my income and expenses?
• What expenses were tax deductible?
• What tax forms do I need to give to my tutors?
• How should tutors be paid?
• How do I pay myself as a CC Director?

To help these CC Directors, I have compiled several resources including an ebook, webinar, blog posts and record keeping spreadsheet.

I recommend these blog posts:

CC Directors: Do not give yourself a 1099-MISC

Tax return for a Classical Conversations homeschool business

I’m a Classical Conversations Director. Do I have to file any forms with the IRS?

Understanding Taxes for a small homeschool business

Ebook: Taxes for Homeschool Business Owners

In 2018, I wrote an ebook Taxes for Licensed Classical Conversions Directors. It was supposed to be distributed by Classical Conversations, Inc to all their Directors. That ebook is no longer available.

So I rewrote and expanded it to become Taxes for Homeschool Business Owners. It is more up-to-date than the other ebook since there were major changes in the tax laws and forms in late 2018.

Tax Prep Webinar

There is a lot to learn about running a business. I don’t mean to discourage you or anyone else away from operating a homeschool business. You provide a valuable service to homeschool families! This webinar will help you understand the tax implications:

Tax Preparation for Homeschool Business Owners will be a lot of help to tutors, non-employee co-op teachers and other homeschool business owners! You can watch the webainr at HomeschoolCPA.com/HSBIZTAXES for a small fee of $10.

Carol, thank you again for the webinar. It was one of the BEST webinars I’ve EVER attended. If you do hold another one, I would pay for it hands down. Totally worth the $10!“ -Denise, webinar attendee

“I actually don’t care for webinars at all – it is not my learning style at all and I struggle to focus, but this one was extremely value and had my attention”. -Mary, webinar attendee

Get Professional Tax Help

Consult a local, small business CPA. To find a local tax preparer I recommend two sources:

• QuickBooks Pro Advisor at https://quickbooks.intuit.com/find-an-accountant
• Dave Ramsey Endorsed Local Provider at https://www.daveramsey.com/elp/tax-advisor

Both of these websites allow you to search for a local tax preparer who is knowledgeable about taxes for small sole proprietor businesses.

Free Record Keeping Resource

A bookkeeping spreadsheet for CC Directors. You can get the spreadsheet now (all it costs is your email!)

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How are your homeschool groups’ records? Scattered, missing, lost? One homeschool group has organized all their important papers in a binder using HomeschoolCPA’s Homeschool Board Member Manual template. In this podcast episode, the leader showed Carol Topp her board binder. It was wonderful to see how helpful this board binder was to the group.

This is the fourth part of a 4-part series on tips for homeschool leaders a workshop given to homeschool leaders in Austin, Texas in February 2020.

In the 4 part podcast series Carol discusses:

• Episode #203   Leader mindset and attitudes
• Episode # 204 What do the duties of care and loyalty look like?
• Episode # 205  The duty of compliance with the laws for nonprofit organizations
• Episode #206 Managing records and finances in you homeschool group

Each episode can be found at HomeschoolCPA.com/Podcast.

Handout of the workshop Tips for Homeschool Leaders

Helpful Resources

For more information on record keeping for your homeschool group, check out these resources

Board Member Manual

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?

Author and homeschool advisor, Carol Topp, CPA, has created a Homeschool Organization Board Manual. It is a template to create a board member binder. It has:

• A list of important documents to keep in your binder
• Section dividers so you can organize the important papers
• Tools to help you run your meetings smoothly including
• A sample agenda that you can use over and over again
• A calendar of board meetings

Read more about the Homeschool Organization Board Manual

Other Resources

Podcasts #109 How to Read a Financial Statement

Podcast #110 Look at Your Balance Sheet

Free webinar recording on creating easy-to-understand financial reports: HomeschoolCPA.com/WebinarFR

Carol Topp, CPA

HomeschoolCPA.com

The post Managing records and financial statements appeared first on HomeschoolCPA.com.

• WalMart Foundation gave her group $500
• Target gave $350 for field trips
• Publix (grocery store) gave Nicole’s homeschool group $200
• Kroger grocery store gave gift cards
• Home Depot gave a $50 gift cards to buy supplies
• Some employers like FedEx match donations given by their employees.
• Vela Foundation gives grants of $1,000, $5,000 and Nicole’s group even received a grant of $10,000!
• TechSoup.org is a nonprofit that arranges free or cheap software for nonprofit groups like QuickBooks Online.

Nicole was busy getting these grants, but she found it easy! All she had to do in most cases was ask!

Your homeschool group needs to be a nonprofit organization with a board and bylaws.

See my checklist of steps.

In addition most grantors require proof of 501c3 tax exempt status from the IRS as a “qualified” charity.” If you group does not have 501c3 tax exempt status it is fairly easy to apply for the status with the IRS with some help!

HomeschoolCPA.com has assisted over 200 homeschool groups apply for 501c3 status and has plenty of resources to help you get this coveted status and begin asking for grants!

Resources to apply for 501c3 tax exempt status

The IRS and Your Homeschool Organization explains when and how often your homeschool group needs to interact with the Internal Revenue Service (IRS). Specific attention given to the application for 501c3 tax exempt status for homeschool organizations. Helpful to homeschool support groups, co-ops, hybrids, music, and sports groups.

This 90 minute webinar 501c3 Application for Homeschool Nonprofits will explain the pros and cons of tax exempt status, what is needed before applying for tax exempt status, the cost and steps to take, and an explanation of the IRS Form 1023-EZ line-by-line. All created for homeschool groups by CPA Carol Topp.

HomeschoolCPA’s Recommended Consultants can help advise homeschool organizations. These qualified, experts in homeschool groups offers consultations to homeschool leaders. Some of the consultants also help homeschool groups apply for 501c3 tax exempt status.

Carol Topp, CPA

HomeschoolCPA.com

The post Finding grants for your homeschool group appeared first on HomeschoolCPA.com.

I encourage homeschool nonprofit organizations to use QuickBooks online and now qualified nonprofits can use QuickBooks online for (almost) FREE!

TechSoup, a charity that arranges free or discounted software for nonprofit organizations, offers

One year subscription to Quickbooks online

Do this NOW!

If your homeschool organization has more than $50,000 in revenues in a year I HIGHLY recommend you start using accounting software and Quickbooks online is an excellent choice.

Lots of homeschool parents are depending on you to run your organization successfully.

The advantages of using Quickbooks online are huge:

• Multi-user so you don’t overburden one person with all the record keeping. Your bookkeeper or CPA can log in remotely with your permission.
• Online backup so nothing is lost.
• Email invoices so you can easily track who still owes you.
• Create reports that show how much money has been spent.

There are a few conditions to TechSoup’s free program:

• You need to be a qualified nonprofit organization, that means nonprofits with 501(c)(3) tax exempt status and the letter from the IRS to prove it.
• You need to re-subscribe each year, but Techsoup’s renewal fee very reasonable, $75/year for most homeschool groups. Without this offer, Quickbooks Online costs $80/month!

Help is available

Are you afraid of accounting software? It can be complicated, but Tech soup offers some helpful videos.

Carol Topp, CPA

HomeschoolCPA.com

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The post Use Quickbooks online for (almost) free appeared first on HomeschoolCPA.com.

She had several questions about tax exempt status and financial oversight.

• What steps with the IRS do we need to follow to bring them under our homeschool group’s tax exempt umbrella?
• What forms would we need to file?
• Would they share our tax ID number or would they need their own?
• They would handle their own bank account, but how much would we need to manage?
  

Tricia,

I read your 501(c)(3) tax exempt application given to the IRS and see that sports teams was part of your mission. That’s good, because you do not have to approach the IRS and ask for permission to add the football program; it was included in your original tax exempt application.

Here are my answers to your questions:

1. When you file your 990 or 990-EZ Annual Information Return with the IRS, you list the football program as one of your programs. If your gross revenues are under $50,000 per year, you’ll file the simple Form 990-N and no explanation is required.

2. There are no additional forms to file beyond the annual Form 990/990-EZ or 990-N. That’s because sports teams was part of your mission in your original tax exempt application.

3. Use your main group’s EIN (tax ID number). The football program is just another activity run by the main group, so you should expect the typical concerns such as: Are they following policies, being careful, keeping good financial records and practices, etc?

4. Your main organization should have oversight of the football program’s bank balances. This includes allowing you, as the main group’s treasurer, access to their bank account online and require they give you a monthly bank reconciliation report and monthly reports of the income and expenses.

This may be a lot of extra work for you as a volunteer treasurer, so you may need to hire a bookkeeper or recruit more help from volunteers.

Money Management in a Homeschool Organization explains how to create a budget, monitor it, and inform your board of the financial health of your organization with clear, easy-to-understand financial reports. Specifically written for treasurers of homeschool organizations.

Carol Topp, CPA

HomeschoolCPA.com

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