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I'm starting to tutor several students. I will be getting paid.

I guess I need to know how to handle taxes on this income. I know most often other tutors I've talked to have considered this pretty much under the table, but that makes me kind of uncomfortable and one parent has just asked me how to handle taxes, if he needs to report anything.

I'm very ignorant in this area.

Ishtar
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I'm starting to tutor several students. I will be getting paid.

I guess I need to know how to handle taxes on this income. I know most often other tutors I've talked to have considered this pretty much under the table, but that makes me kind of uncomfortable and one parent has just asked me how to handle taxes, if he needs to report anything.


Let's hope the other tutors aren't teaching ethics.

It's self-employment income to you unless you're working through an agency that pays you as an employee. I'm not aware of any responsibilities of the parents other than paying you.

Your responsibilities include tracking your income and expenses, reporting same on Schedule C of the 1040, which feeds Schedule SE, where you compute self-employment tax, and, perhaps, making estimated tax payments.

A starting point for your homework would be IRS Publication 334. Don't let the title put you off. You are a small business even if you don't think of yourself as one. Other publications of interest would be 505, 535, and 560.

Phil
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I'm starting to tutor several students. I will be getting paid.

Congratulations! And you will be incurring income tax as a result (both federal and state)

I guess I need to know how to handle taxes on this income.

It's self-employment income. You are responsible for paying income tax, social security and medicare taxes, and the employer portion of social security and medicare taxes (these are referred to as "self-employment taxes).

know most often other tutors I've talked to have considered this pretty much under the table

Then they're violating tax law and if the IRS find out about it, the tutors are in trouble. (The IRS has a tip line if you are feeling vindictive)

one parent has just asked me how to handle taxes, if he needs to report anything.

Unless you by some fluke qualify for the "household employee" criterion (extremely unlikely) the parent doesn't need to do anything. If s/he wants to s/he can ask you for a W-9 to get your SSN, then use the W9 to fill out a 1099 and file it with the IRS, but that's not required. Taxes are the independent contractor's (your) responsibility.
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Unless you by some fluke qualify for the "household employee" criterion (extremely unlikely) the parent doesn't need to do anything.

Correct so far.

If s/he wants to s/he can ask you for a W-9 to get your SSN, then use the W9 to fill out a 1099 and file it with the IRS, but that's not required.

I disagree with this. 1099s are only to be filed by businesses for business expenses. They are not to be filed by individuals for their personal expenses. And tutoring your child is a personal expense.

In this age of awareness about identity theft, I would not give my SSN to anyone who did not have a legitimate reason for using it. And this is not a legitimate reason.

Taxes are the independent contractor's (your) responsibility.

Again, I agree.

--Peter
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Your responsibilities include tracking your income and expenses, reporting same on Schedule C of the 1040, which feeds Schedule SE, where you compute self-employment tax, and, perhaps, making estimated tax payments.

A starting point for your homework would be IRS Publication 334. Don't let the title put you off. You are a small business even if you don't think of yourself as one. Other publications of interest would be 505, 535, and 560.


Thank you

Ishtar
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Thank you, all.

I was thinking it was like "independent contractor" but wasn't sure.

Thank you again.

Ishtar
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Oh, and since I'll be using my private vehicle to drive to people's houses, I should keep track of my milage for that, right?

Ishtar
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Oh, and since I'll be using my private vehicle to drive to people's houses, I should keep track of my milage for that, right?

Ishtar

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Yes, and any other expenses for which the students/parents do not reimburse you.

Bill
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And don't forget that being self-employed makes you eligible for other types of IRA's such as a Keogh, a solo 401k, a SEP and a SIMPLE. I highly recommend that you take advantage of these to help save for your retirement.
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