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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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5:14 PM, Apr. 14, 2008
How much money can a homeschool group earn?
(view similar articles on Q&A from Homeschool Leaders)
Here's a question asking how much money can a homeschool group earn before filing a tax return:
HI Carol-
I really appreciate your website. I have a question regarding leading a homeschool group. We have not filed for non-profit status as of yet, but we are considering it. We have a mission stmt, by-laws in place, an EIN, and a board. From what I seem to understand we would be considered a unincorporated association. Does that title seem appropriate? We want to make sure we do everything "by the book". We were under the understanding that we could not exceed $5000.00 going through our group bank account before it becomes necessary for us to go through the process of becoming a non-profit org. and filing a tax return. Any help you can pass on would be appreciated.
Thanks so much.
Christina in CA
My reply :
Yes, you are correct, your organization is a unincorporated association. See Common nonprofit types pyramid Your organization can have any amount of revenue and remain an unincorporated association.
The IRS does allow unincorporated organizations to operate as "tax exempt" (i.e. 501c3) if their revenues are under $5,000 per year. The organization can provide donors a tax deduction for their contributions. That's a pretty easy and simple way to operate. Of course, $5,000 is not a lot of money these days.
So if your organization wants to give donors tax deductions for contributions and revenues are over $5,000 per year, you will need to file with the IRS for 501c3 tax exempt status.
The main reason an organization seeks becoming "tax exempt"/501c3 (and filing the IRS forms) is to accept tax-deductible donations. Other reasons include applying for grants and to participate in some fund raisers that require 501c3 status. See Do we need 501c3 status?
It sounds as if your group is well organized with by-laws, a board, etc. That's great! It may not be too difficult to file for 501c3 status if that's the way your group decides to go.
I hope that helps,
Carol L. Topp, CPA
www.HomeschoolCPA.com
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