Getting an EIN (Employer Identification Number)

Hi Carol,IRS

I am new to an existing homeschool co-op in VA. This co-op is more than 12-15 years old. We do not accept donations or need to; so far we have been handling the money through someone’s personal bank account. We receive fees from students and then pay teachers and reimburse them for materials, generally we break even each year (or can if we need to). There are regular Board meetings; I do not know if they have bylaws or take minutes but I do know they have a mission statement. The bottom line is that we want to be able to have a business checking account.

Can we get an EIN in order to open a checking account in our co-op name without incorporating and without having a state or federal annual filing requirement? I seem to remember that once you get an EIN (that I think is required for a business bank account), you are on the radar screen with the IRS and will need to file some sort of return.

Thanks so much

Nancy V in VA

Nancy,

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. Your group is doing things right by getting a checking account for their co-op instead of using a personal account.

On my website, www.HomeschoolCPA.com you can read my article Getting an EIN from the IRS.

Yes, you can get an EIN for banking purposes, but not have any other dealings with the IRS. You do not have to be a nonprofit corporation to obtain an EIN. If your organization does incorporate later, they will need to apply for a new EIN.

You will deal with the IRS if you become a 501(c)(3) tax exempt organization or pay workers. Since you mentioned that you are paying teachers, then you have required reporting to the IRS and to your state. You will have to pay payroll taxes (Social Security and Medicare) and file a W-2 if they are employees or file a 1099MISC if they are independent contractors. You should read this entry: “Paying co-op teachers is a sticky issue.”

Best of success to you!

Carol Topp, CPA

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One Response to Getting an EIN (Employer Identification Number)

  1. JustPassing says:

    Good stuff, I “Stumbled” you. My DIGG account got messed up but I like Stumbling better anyway.

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