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I am a homeschooling mother and Certified Public Accountant (CPA) combining my experience and knowledge to help homeschool organizations such as co-ops, support groups, music and sports programs. HomeschoolCPA answers questions from homeschool leaders on many topics such as nonprofit status, liability, paying teachers, tax exempt status and taxes.
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9:28 AM, Aug. 14, 2007
Questions about checking accounts
(view similar articles on Q&A from Homeschool Leaders)
My ebook Money Management for Homeschool Organizations seems to have gotten people thinking about their homeschool group's finances. Here's a question I was asked recently:
We have always had a checking account under a parent’s name. We were adding a name to our account this year when (the bank) informed us we can no longer do this….and we need to have our own Tax ID number. Will we need to file returns with the IRS if we get a tax ID number?
Getting an EIN (Employer Identification Number) from the IRS does not mean your organization will have to report income to your state or the IRS. If you operate an an unincorporated nonprofit organization, there are usually no reporting requirements at all.
How do you establish yourself as an unincorporated nonprofit organization? You look and act like a nonprofit by having a mission statement, by-laws, and a board of at least 3 people. Your homeschool organization may already have those pieces in place.
Nonprofits have to start dealing with tax forms when they become a 501c3 tax exempt organization or do public solicitations (i.e. door-to-door selling or fund raising). My own homeschool co-op has income of $5,000-$10,000 per year. We have our own EIN (Tax ID number from the IRS), but we are not 501c3 tax exempt, so we do no reporting to the IRS.
My homeschool co-op did do a door-to-door fund raiser one year and had to register with our Secretary of State and file a 7 page report of our finances. We don't do public fund raisers anymore because of the headache of that report (and the fund raiser was a LOT of work) I was the treasurer then, so it was my job to file this report.  State laws vary, but I most states require a financial report if a nonprofit does public solicitation of funds.
Carol
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We've got the same ques only we just became incorporated...now what? Will we need to do any reporting if we get an acct w/ coops name on it?
Wish we'd found this site a couple of months sooner!!
Thanks for any help!
Posted by Anonymous on Aug. 16, 2007 at 9:11 AM
Most states do not require financial reporting from incorporated nonprofits unless they are also 501c3 tax exempt organizations or do public solictation of funds (public fund raisers).
To find out what your state's reporting requirements are visit this very useful website:
http://www.hurwitassociates.com/
It lists filing requirements by state.
Carol
Edited by HomeschoolCPA on Aug. 16, 2007 at 5:37 PM
Posted by HomeschoolCPA on Aug. 16, 2007 at 6:24 PM
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