In this episode of the Dollars and Sense Show host Carol Topp discusses What is tax exemption and how do I get it for my homeschool group? In this episode, Carol discusses who is eligible for tax exemption (you might be surprised!), the benefits of tax exempt status and the disadvantages. Why you want tax exemption and how to get it.
- Organized as a nonprofit: board run, bylaws, nonprofit incorporation or unincorporated association
- Operate as a nonprofit: no profit motive, have a charitable purpose (education), serve a charitable class (children), no inurement (sharing of the group’s money with individuals)
Benefits of tax exempt status: no tax to pay on your surplus, can accept tax deductible donations, may be eligible for grants, some fundraisers like Box Tops are only open to tax exempt organizations Costs of tax exempt status: IRS application fee ($400 or $850), nonprofit incorporation in your state. Regular reporting to the IRS (Form 990) and your state. Different types of tax exempt status for homeschool organizations:
- Support groups: 501(c)(7) social club
- Homeschool co-ops: 501(c)(3) educational organization
On the show Carol mentioned several resources:
- Tax exempt status for homeschool support groups
- Checklist for tax exemption for homeschool groups
- The IRS and Your Homeschool Organization book
Need more information? Visit the Homeschool Leader Tools/Articles page and sign up for her e-newsletter for homeschool leaders:
Tune in for the next Dollars and Sense show on January 2, 2014 when Carol will start a four part series on teaching your kids about money.