This blog has moved!

I’m now answering questions from homeschool leaders at my website/blog combination HomeschoolCPA.com

All the posts moved with me, so you can still find the information you need over at HomeschoolCPA.com.  See you there!

Carol Topp, CPA

IRS fees will increase January 3, 2010

This just released by the IRS. Fees for applying for 501c3 tax exempt status are set to increase January 3, 2010:

User fees will increase for all applications for exemption (Forms 1023, 1024, and 1028) postmarked January 3, 2010:

• $400 for organizations whose gross receipts are $10,000 or less annually over a 4-year period
• $850 for organizations whose gross receipts exceed $10,000 annually over a 4-year period
• $3,000 for group exemption letters.

A complete schedule of all user fees will be published in the annual procedure released in January 2010.

Cyber Assistant, a Web-based software program designed to help 501(c)(3) applicants prepare a complete and accurate Form 1023 appplication, will become available during 2010.  Once the IRS announces the availability of Cyber Assistant, the user fees will change again:

• $200 for organizations using Cyber Assistant (regardless of size) to prepare their Form 1023
• $850 for all other organizations not using Cyber Assistant (regardless of size) to prepare their Form 1023.

IRS will announce when Cyber Assistant is available and the effective date of the user fee change.  Subscribe to the EO Update to automatically received an alert that Cyber Assistant is available.

http://www.irs.gov/charities/article/0,,id=212562,00.html

So get your 501c3 application (Form 1023) in before January 3rd to save $100. (The current fees are $300 or $750 depending on your gross revenues)

Cyber Assistant sounds like a good tool, but the IRS does not say when Cyber Assistant will be available in 2010, so we have no idea when the lower rate of $200 will be available.

Last time the IRS increased their fees they received a deluge of applications and had a huge backlog for months. Small, new nonprofits try to save a buck wherever they can and will try to take advantage of the lower rate.  While I am glad to see the fee will eventually be dropped to $200, I still expect to see an increase in applications before the due date.

Carol Topp, CPA

Lessons learned from a homeschool co-op

Faye, a homeschool mom and columnist for the DC Examiner.com, has a list of lessons she learned while being in two homeschool co-ops this year.

When we joined two homeschool co-ops last year, it completely changed our homeschooling life.  For one thing, I had to be sure not to plan anything else on co-op days, because we were already busy.  Sometimes this made scheduling field trips a little tricky, but the juggling was well worth the effort.  Another big change was that on co-op days, we all had to get up at a scheduled (earlier!) time, so that we could be out the door on time. We aren’t big morning people around here, but I think the change did us good.  And finally, it brought more friendship and support into our family and into our lives, which was perhaps the biggest blessing of all!  There were many other things that I learned, and I thought it would be fun to share a few of them:

1.  Kids who are not used to daily “school” may not always have pencils, pens, or paper.  Be sure to bring extra!

2.  No matter how hard you wish, if your co-op is exactly 18 minutes from your house, you will not be able to get there in 10 minutes.  Leave early (or at least on time).

3.  Even if you are the “teacher”, sometimes you will be late (refer to #2 for the solution to this problem)

4.  A big roll of paper and a box of crayons are indispensable for keeping little ones occupied.  The paper may come in handy for other uses (see #1).

5.  You probably already know this, but kids NEED time to run around outdoors.  If your co-op doesn’t have access to an outdoor space, try to find a way for the kids to take a walk or play some indoor games.  Getting the wiggles out is very important.

More of Fay’s lessons learned coming soon.

Meanwhile, if you would like to learn more about starting or running a

homeschool co-op, order my book, Homeschool Co-ops: How to Start Them, Run Them and Not Burn Out.

Carol Topp, CPA

Is insurance needed for small homeschool groups?

Do small homeschool groups need insurance?

Often they do, especially of their host/landlord requires general liability insurance.

To help you discern your risk and need for insurance, Harvey Mechanic, an attorney that specializes in nonprofit law, lists some potential claim areas:

POTENTIAL CLAIM AREAS:

1. Discrimination (Age, Race, Sex)
2. Wrongful dismissal of employee
3. Mismanagement
4. Financial failure/bankruptcy
5. Poor administration resulting in losses
6. Causing the organization to incur unnecessary tax liability
7. Imprudent investments
8. Misuse of contributions
9. Conflict of interest
10. Unauthorized loans
11. Failure to obtain competitive bids
12. Unwarranted expansion
13. Failure to obtain government funding or lower interest loans
14. Misuse of government funds or grants

How many of these situations could occur in your homeschool organization? Probably some, but not all. Large nonprofits like the Red Cross or a hospital face many of these potential risks and need insurance.

In my article, “Insurance for Homeschool Groups,”  discuss the various types in insurance a homeschool group might need and how to lessen your risks to obtain a reasonably priced insurance policy.

Insurance for homeschool groups

Carol Topp, CPA

Should a co-op be a separate organization?

Carol,

We have one entity (group) that works outside of our association, this is our Co-op group. This group does take in money – I believe it’s run out of a separate bank account. I know our Co-op group has a board, and bylaws but not an EIN number, which I know is very easy to get. What are they benefits of us staying as one group? My question is: should our Co-op group run their funds separately like this?

Sandy in TX

Sandy,

Your co-op could be organized as under your association or as a separate group. It’s really up to you. Since they have their own separate board and bylaws, perhaps they are really operating as a separate unincorporated association already. You could be officially separate if they obtain their own Employer Identification Number (EIN) from the IRS.

There might be advantages to staying as one group. There are fewer volunteers for the board positions, consolidated financial reports, and shared workload. The co-op could remain a part of your organization, but with a separate checking account and its own budget. It could be self-sustaining financially, but still part of your association. Many church-run schools operate like this, financially self-sufficient, but still under the umbrella of the church.

Carol Topp, CPA

Finding a CPA for your nonprofit

I wrote this article for Step by Step Fund Raising titled

A Good CPA is Hard to Find

by Carol Topp, CPA

Your nonprofit needs professional accounting help, but a good CPA can be hard to find. You desire someone who is knowledgeable but understandable, experienced but still affordable, and professional yet interested in your mission.

How to find a CPA to help your nonprofit:

• Tell your staff, members and volunteers of your need and request that they ask friends and neighbors for referrals.
• Mention your search for a CPA in your newsletter.
• Look over your member or donor list for CPAs and  call to see if they are qualified and interested.
• Join an on line professional network like LinedIn.com, join some groups and post your need.
• Call your state CPA society for referrals. WebCPA.com lists state CPA societies at.
• Ask other local nonprofits for their CPA’s contact information.
• Use an on line matching service such as Accountants for the Public Interest that matches volunteer CPAs to nonprofits at.

Finding a qualified CPA is the just the beginning. You also desire a good working relationship that benefits your nonprofit more than it costs.

When you work with an accountant:

• Be specific about the task
• Ask for an estimate of their fee
• Request an engagement letter that will spell out the specific tasks and estimated cost
• Inquire if the charges can be reduced.  Some CPAs will offer a discount if you can delay work until after tax season.
• Discuss how much of the work your staff or volunteers can do to help reduce fees.
• Ask for lower cost alternatives. For example, a review of your financial statements may suffice instead of a full audit which is much more costly and time consuming.
• Be prepared to ask questions, read and learn on your own

Seek out an accountant that has the ability advise you about the financial side of your nonprofit. You should feel comfortable with him or her and be free to ask questions. A good accountant is not just a bean counter; they are also a business advisor. They should explain issues and financial statements in a language that is accurate, yet understandable. If you leave a meeting with your accountant feeling confused, you should find another accountant.

Ask a potential CPA these questions:

• How many nonprofits do you have as clients? Hopefully, the accountant has clients similar in size to your organization. Size is usually measured in staff size, number of clients served or annual revenue.
• What is your area of specialty? Some CPAs conduct audits while others specialize in preparing the annual IRS Form 990. Select an accountant that matches your needs.
• With whom will we be working? In medium and large accounting firms there are several layers of management.  The person doing the original interview may not the one doing the work.  Alternatively, in a small or solo firm you will probably work with only one individual.
• May I see your biography or Curriculum Vitae  (CV)? Look for participation on church or community boards, published articles and professional memberships.
• Can you explain to me the reporting requirements for my nonprofit? This type of question is really a test to see how well the CPA explains IRS guidelines.  Is their explanation understandable to you or do they lapse into accounting jargon?
• Do you charge by the project or by the hour?
• Am I free after this engagement to call you with questions?  Will I be billed for the phone call?

After their first audit, a small, but growing, nonprofit asked their CPA, “ How do we compare to other nonprofits? What can we be doing better?”  The CPA was unable to answer their questions.  He was good at number crunching, but he could not see the bigger picture and seemed unable to offer advice. The director was quite disappointed. They used the techniques mentioned here and found a qualified, helpful CPA with a reputable firm that guided them through many successful years of expansion.

Carol Topp, CPA //

Have we hit the $5,000 mark?

I am trying to do some research on the non-profit status for our Homeschool group and cannot find a clear answer. We are trying to see if we have hit the $5000 gross receipts limit.

Would money that individual members write to the group, so that the group can write one check to an organization, for instance a field trip, be considered in the gross receipts?

Nikki E

Nikki,
All money that comes in, even if it goes out almost right away like for a field trip, is considered gross income.

Not difficult to get over that $5,000 limit, is it?

To help in your research you might want to read my e-book Tax Exempt 501c3 Status for Homeschool Organizations.

You can find it on my website www.HomeschoolCPA.com/Books.html

Best of success to you,

Carol Topp, CPA

Using Quickbooks for reports

Hi Carol,

Our Board of directors for our homeschool group of 100 families just received your 2 books (Money Management for Homeschool Organizations and Tax Exempt 510c3 Status for Homeschool Organizations).  I have read them.  It has reassured me that we are on the right track and that we have instituted many of the things that you mentioned.

We have purchased Quickbooks and our treasurer is working hard to learn  the software.

What financial reports do we need to generate monthly?  We need these reports to be a simple process.The Balance Sheet and P&L (Profit and Loss) statement in Quickbooks looks are overwhelming.

We are not accountants and double entry lines are confusing.We have reconciled our checkbook successfully.  YEAH!

Any advise would be helpful,

Hilary S

Hilary,

I’m glad that my books were helpful.  Your organization sounds as if they are getting things set up well.  I hope you’ll be serving homeschool families for a long time to come.

I think Quickbooks (QB) can be as simple or as complicated as it needs to be. The reports your treasurer generates is dependent on what the board wants to see. When I was treasurer, I gave my board a P&L (Profit and Loss) statement.  They really liked to see the budget in one column and actual P&L in another column.  Then they could see how we were doing compared to our budget. This report can be generated in QB as a Budget Report.
I also created a mini balance sheet at the bottom of the P&L.  I took the amount in the checking account and then listed payments to be made.  This gave the board an idea of how much cash we had on hand and where it was planned to go.

If the P&L statements in QB are too overwhelming, then perhaps you’re not using QB correctly.  I frequently see QB users make their Chart of Accounts too long.  Then the P&L becomes 2-3 pages long.  I recommend that a P&L be condensed into one page or less.

If your treasurer would like my help in setting up QB, I’d be happy to help.  She can e-mail me with what needs to be done and I’ll give you an estimated cost.  I also do QB training over the phone. I keep things as simple as possible.

I hope that helps.  I wish you the best of success! (Congrats on balancing the checkbook!)

Carol Topp, CPA

Carnival of Homeschooling

Welcome to the Carnival of Homeschooling!   Our theme this week is:

As Time Goes By: Reflecting on 25 Years of Marriage and 12 Years of Homeschooling

In 2009 my family celebrates two milestones, our oldest daughter graduates from homeschool high school and my husband and I are celebrating 25 years of marriage (today!), so I’m reflecting on the passage of time.

Before you begin

This is Dave and I before we were married, setting the stage for marriage with a period of engagement. Like engaged couples, parents just starting to homeschool can be excited and fearful at the same time.

Teri’s Take asks Will you begin homeschooling this fall?

Praiseworthy Things asks parents to consider the important question, What About Preschool?

Percival Blakeney Academy compares Home Schooling VS Home Cooking

Why Homeschool has a video of John Taylor Gatto talking about the purpose of Public Schools brainwashing and preparing for factories.

Starting to homeschool

Our family went from just the two of us to four when we added two daughters. We had a lot to learn as parents and many parents learn a lot as they begin homeschooling. I am so grateful for the parents and experienced homeschoolers that shared their wisdom with us.

Wired For Noise shares a review of a book set that is great for beginner readers in Reading Together

The Frugal Homeschooling Mom adds reason number 8 in Why Homeschool? Eight Reasons (and more to come)

Terri Sue Bettis presents Homeschooling an Only posted at Cricket’s Corner.

explore-discover-learn asks Why do Kids Bully? and offers  Bully and Cyberbully Printables

Terry presents Art Supplies Can Spark a Child’s Creativity posted at My Creativity Blog.

Growing and learning

This is one of my favorite pictures from early in our homeschool journey.  My daughter is about seven and is pretty happy to show us her spelling book! Notice little sister peeking out from behind her shoulder. Our daughters kept growing and learning as these homeschool bloggers also continue to do:

Purls of Wisdoms blogs about learning styles in Homeschooling Styles

Whippasnappa’s Blog notices the changes in her children because of homeschooling in Thoughts on Homeschooling

C h r y s a l i s tells us that stargazers across the world are in for a major event next month. Scientists say that on July 22, a total solar eclipse will be visible from India, China, and parts of the South Pacific in The Eclipse Will Look Like a Diamond Ring

Barbara Frank Online asks Is your young teen sleeping through the summer? in The Young Teen in Your House

A Mountain Mom shares The process of being organized.

ChristineMM presents Homeschool Stuff Reorg Before & After posted at The Thinking Mother.

Freehold2 discusses an important topic in Copyright and Homeschoolers

Kathy presents Airborn: Homeschool Review posted at Homeschoolbuzz.com Reviews.

Jen presents My Homeschool Recipe posted at Cage Free Monkeys.

Jimmie presents Living Math Curriculum Review posted at The Curriculum Choice.

Travel and field trips

My husband used to say that the money we saved by homeschooling meant we could take really big field trips and here’s a picture from one of our biggest “field trips” ever-to China in 2003. We all learned so much and see the world differently as a result of traveling. Here some homeschool families share their travels near and far.

Summers’ Family Adventures enjoys Cleveland’s Metroparks in Rocky River Nature Center

Kimberly from Life of a Homeschool Family visits a local museum in Macon Museum of Arts & Sciences

Home Spun Juggling shares photos from her recent trip to the aquarium in Sharks, Jellies, and Penguins, Oh My!

Amy from Neighborhood Clubhouse explains How Homeschooling Families Can Find Free Travel Accommodations

Dave from Home School Dad explains a service project his family did in Oh Where is My Hairnet?

Susan presents Riding the Escalator posted at The Expanding Life.

Continued commitment

My daughters have continued to be committed to homeschooling all the way through high school. This picture shows their books from one year of high school!  They really felt a sense of accomplishment when they saw their book towers!  The following posts will encourage you to continue in your commitment to homeschool.

Aimless Conversation discusses the importance of setting goals in Homeschooling With a Purpose

Loving Learning at Home reflects on her homeschool life in Assessment Time; Reflection Time

Homeschooler Cafe’ encourages other homeschool parents in Just Hang In There!

See what the Weird, Unsocialized Homeschoolers will be using next school year in Our 2009-2010 Curriculum

Kiwi Polemicist is concerned about homeschooling freedoms in Sweden in Update: Sweden wants to outlaw homeschooling done for religious and philosophical reasons

Take Dana’s poll How Involved are Dads in Homeschooling? at Principled Discovery

Beverly’s Homeschooling Blog shares Pfc. Bowe R. Bergdahl was homeschooled. Pfc Bergdahl is a soldier being held captive in Afghanistan

Milestones and celebration

Here is my daughter, Emily, on her graduation from homeschool high school. Quite a milestone in her life that we’re happy to celebrate! Of course milestones mark an event, usually an ending, but in Emily’s case this milestone is a beginning as well as she heads off to Grove City College in PA this fall.

Homemaking 911 celebrates a milestone in Christina is Graduating This Month

Amanda presents I Think I Can, I Think I Can, Wait? Yep, I Know I Can! posted at The Daily Planet.

From my other blog I share Homeschool High School Graduation and Sending Your Kids to College.

Wrap up

Thank you to all the bloggers that shared their posts! I hope you have enjoyed this reflection on our family life and marriage. No matter where you are on your path, remember that the joy is in the journey!

This final picture is Dave and I at a family celebration of our 25th wedding anniversary. We haven’t changed a bit, right?  Wrong! Of course our past 25 have years have changed us for the better, I hope.  Homeschooling our daughters has been a rewarding, fulfilling experience.

The next Carnival of Homeschooling will be at Small World. Submit your blog article to the next edition of carnival of homeschooling using the carnival submission form. Past posts and future hosts can be found on our blog carnival index page.  The deadline is Monday July 27 at 6 pm PST.

Carol Topp

I’m hosting the Carnival of Homeschooling

I’ll be hosting the Carnival of Homeschooling Blog Carnival next week!

The current Carnival is over at  Tami’s blog

The theme is:

As Time Goes By: Reflecting on 25 Years of Marriage and 12 Years of Homeschooling

This year my oldest daughter graduated from homeschool high school in May and my husband and I are celebrating 25 years of marriage on July 21st, so I’m reflecting on the passage of time.

My categories will be along the lines of time such as:

Before you begin
Starting to homeschool
Growing and learning
Travel and field trips
Continued commitment
Milestones and celebration

If you have a post that could fit my theme or a particular category, send it me using this handy submission form: http://blogcarnival.com/bc/submit_199.html

Any posts on homeschooling will be accepted, but if you have a post (even an old one) fitting the theme or my categories, that would be appreciated.

The due date is Monday, July 20 at 6 pm. The earlier, the better!

If you haven’t read any blog carnivals before, please read What is a Blog Carnival.
Thanks!!

Carol Topp