Paying coaches from Booster Club accounts for meets

[gym monkeys mom]

Currently our gym pays our coaches for meets. Due to several factors the economy being one of them this is unlikely to occur next season.

So here is what I need to know. We currently as a Booster club take care of meet registration and we have 501C3 status our club does not. parents either pay or fundraise dollars to their accounts. everyone is required to join but not required to fundraise.

1. How do we go about billing and payinng coaches for meets??
Do we do it by level and per session??
2. If we are paying coaches do we have to do tax stuff for them??

Any other info you have about these things would be great or maybe there is a place or person we should be contacting.

Thanks for your thoughts on this matter. I am sure others out there currenlty do this I just need a few answers for our board so we can pre-pare for next year.

 

[Megley]

I could write a book about this topic! I am the President of our booster and have spent the last two years dealing with all of the headaches involved with assessing parents for coaches' and registration fees for meets. There are any number of ways to do it and invariably you will have parents complain about the method you choose. We assess per level, based on what it cost the previous year, but you could do it by compulsory/optional. You can assess in lump sums or by meet.

You will have to issue a tax form to the coaches. I believe its a W-9 form but someone else can confirm.

Also, be very careful about individual accounts for fundraising. It's a no-no with the IRS. I had to look into this issue in depth so I know whereof I speak.

 

[flipper's fan]

We paid the coaches per session, lump sum, based on experience/rank at the gym. So the head coach got $65/ session, the newerest coach got $50/session. We paid their mileage and we paid for meals if they had multiple sessions. You give them a 1099 at the end of the year and they are responsible for paying their taxes.

We assessed a yearly fee, added $15/meet or $25/meet coaching fees to eveyone's meet fees, and used fundraising money for this. There were not individual accounts. There were requirements that everyone fundraise. Meet fees were basically a pass through so we did not need accounts- you were billed for a meet and we sent off the fees right away.

Make sure your treasurer is aware of IRS regs. A mistake with the rules can be very costly in penalties an d fees.

 

[justanothergymmom]

Also, be very careful about individual accounts for fundraising. It's a no-no with the IRS. I had to look into this issue in depth so I know whereof I speak.

Could you please elaborate on this? Does this mean that it is a problem to individually fundraise and apply to an individual gymnast's assessments? Must all fundraising proceeds go to a general account?

 

[Megley]

We paid the coaches per session, lump sum, based on experience/rank at the gym. So the head coach got $65/ session, the newerest coach got $50/session. We paid their mileage and we paid for meals if they had multiple sessions. You give them a 1099 at the end of the year and they are responsible for paying their taxes.

We assessed a yearly fee, added $15/meet or $25/meet coaching fees to eveyone's meet fees, and used fundraising money for this. There were not individual accounts. There were requirements that everyone fundraise. Meet fees were basically a pass through so we did not need accounts- you were billed for a meet and we sent off the fees right away.

Make sure your treasurer is aware of IRS regs. A mistake with the rules can be very costly in penalties an d fees.

That's it - a 1099. Thanks Flipper's Fan!

gymmonkey'smom, you may want to check with your gym to see if there is a set rate that the coaches are usually paid. Here it's $100 per day, no matter how many sessions they coach, but I know it varies in different parts of the country and at different gyms. We also pay mileage and per diem as well as for hotel accommodations if they are necessary. Again, though, I would check with your gym owners to see what they have done in the past.

 

[Megley]

Could you please elaborate on this? Does this mean that it is a problem to individually fundraise and apply to an individual gymnast's assessments? Must all fundraising proceeds go to a general account?

Yes, if you are a 501(c)(3) there are rules against what is called "individual inurement." In other words, the funds cannot be raised to benefit certain individuals; they must benefit the entire group that the entity is organized to benefit without regard to how much each member raises. The main principle of funding by IRS 501(c)(3) nonprofit boosters is that the organizations may not discriminate in making payments for gymnasts on the basis of their family's membership in, or funding to, the booster organizations, or the family's fund-raising or time put into booster organization activities. This is known as individual inurement. All funds solicited on behalf of the booster organization in fundraisers (sales and charitable solicitations) must go into the general fund of the booster organization and not directly into individual accounts of the particular member who did the fundraising.

Here's a link to an IRS publication on the topic:

http://www.irs.gov/pub/irs-tege/eotopica93.pdf

This is a complicated topic and I am not giving advice - just sharing what I learned through having to research this topic.

 

[flipper's fan]

That was our understanding and experience as well. I know a very large gym around here that does individual accounts but they may have some other accoutning method. You cannot disburse any money to any individual gymnast.

 

[Gymdad2]

Megley,

I think you stated this issue very clearly, and I want to thank you. I have been a booster club member for 12 years and am also a past president and I have found this to be the most difficult issue to deal with. There has always been a core group who does the majority of the work on the booster club and it's fund raising projects and a corresponding feeling among the membership that those families that contribute the most to the club ought to be the ones who benefit the most, but the IRS law says that for a 501(3)(c) organization that all funds must be distributed equally and that individual accounts are prohibited.

 

[gym monkeys mom]

Ok Megley & Gymdad2 I am going to need to PM you both.

Thanks for the info.

 

[Deleted member D3987]

Megley,

I think you stated this issue very clearly, and I want to thank you. I have been a booster club member for 12 years and am also a past president and I have found this to be the most difficult issue to deal with. There has always been a core group who does the majority of the work on the booster club and it's fund raising projects and a corresponding feeling among the membership that those families that contribute the most to the club ought to be the ones who benefit the most, but the IRS law says that for a 501(3)(c) organization that all funds must be distributed equally and that individual accounts are prohibited.

i have posted before that this issue should probably not be discussed in this forum. and some states have rules that state how those fed 501c3's must be promulgated in their respective states.

yet, what is stated above by gymdad is as close to accurate as it can get.