Tuesday, February 24, 2015

Tax Deductions for Classical Conversations Tutor Job

We joined a Classical Conversations community this school year and I agreed to be a tutor.  This is a contract position and because it paid over $600 in the calendar year I got a 1099-MISC form.  The IRS also gets this form so it's definitely reportable income.

I am not a CPA, but in my former non-mommy life I did prepare taxes.  So I'm not a professional anymore - this is my disclaimer.  =)

The easiest way to report the income is on Line 21 of Form 1040 "Other income."  Just write in 'tutoring' and the amount.  This method means you pay tax on the full earned amount.

Less easy, but better IMHO, is to fill out a Schedule C that attaches to Form 1040.  If you use a Schedule C you'll be able to take deductions related to your earnings.  For example, materials you purchase specifically to tutor, mileage to tutor meetings, tutor training expenses etc.

Here is a list of what I was able to deduct:
  • Books required for tutoring, but that I would not have purchased as a parent
    • Classical Music for Dummies
    • Van Cleave's 201 Awesome Experiments
    • Drawing with Children
    • Discovering Great Artists
    • My Body (anatomy book)
  • Tin whistle for myself
  • Office supplies
    • Tri-fold board
    • laminating sheets
    • dry erase markers & eraser
    • ream of paper & an ink cartridge (I did most of my printing at the library, but this is a reasonable deduction for people printing at home)
    • hand sanitizer to keep in my bin
    • hanging files
  • Review game supplies
    • Timeline cards
    • Review cards for Cycle 3
    • Cardstock to make jeopardy board
    • Bean Bags
    • Floor puzzle of United States
  • Mileage - 56.5 cents per mile in 2014
    • 3 days to/from Practicum
    • Initial tutor meeting at local church
    • Tutor meeting for weeks 1-6 at our CC church
    • Tutor meeting for weeks 7-12 at our CC church
    • Costco to buy laminating sheets
    • Staples to buy tri-fold board & dry erase markers
    • Many weekly trips to library to print materials 
  • Practicum Fees 
  • CC Connected Fees
When all of these deductions are figured in, I actually pay taxes on a very small amount instead of the whole amount that was over $600.

It's important to note that you should NOT deduct expenses that you would have incurred as a parent anyway.  For example, I would have purchased the CC Foundations book and the CDs as a parent so I didn't deduct those.  I also drove to CC each week, but I would have driven my kids anyway so I didn't deduct mileage for those trips.  You only want to deduct things that were exclusive to tutoring.

Hopefully this is helpful to my fellow tutors or your husbands if they do the taxes.  

If you think of anything I missed, please comment!  

Love, Katie

12 comments:

  1. I was told I would not get a 1099 because CC didn't pay me, the parents did. Are you a Manager or a tutor? I am trying to figure out how to report the income without a 1099

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  2. Hi Challenge B mom,

    I am a tutor at my CC. My understanding is that most communities are treated sort of like a franchise of the corporate CC and Directors (you use the word Manager) are running their own business. In our CC we write checks to the "XX Classical Conversations" or directly to our director. She then writes check to the tutors & subs after each 6 week quarter. You should get a 1099 if you get a check from your director/community. Unless you get checks written to you directly from the parents, the parents aren't paying you. Tutors are technically "independent contractors" of the community. If you don't get a 1099 (because you director neglected to issue them or because you earned under $600) you can report the income on your form 1040, line 21 "other income." On the line (just to left of where you write the amount) write "tutoring." This tells the IRS you did some tutoring & earned a little money. If you want to take deductions you have to fill out an additional form: Schedule C. This is a small business form and is technically what an independent contractor should use. You use this to report income and deductions related to your tutoring business. I hope that helps. Disclaimer: remember I'm not a professional anymore; this is not professional advice.

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  3. If you were a Challenge Director how would you show deductions? Thank you.

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    Replies
    1. My only experience (so far) has been with Foundations. However, the same tax principles should apply to all levels of Challenge as well. As a Challenge Director you have income and expense. You should show both income and expense on Schedule C that attaches to Form 1040. Only include expenses that are unique to being a Challenge Director, that is do NOT include expenses you would likely incur as a parent. Don't forget mileage because it really adds up! Again, I'm not a tax professional.

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  4. Katie CC directors are licensees...not a franchise at least according to Classical Conversations.

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    Replies
    1. Thanks for the correction. I was having a hard time identifying precisely what to call it. I'll make the change. Katie

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  5. What do you consider "practicum fees?" I can't think of any.

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    1. tutors are required to attend, parents are not. So, child care would be one I can think of, milage, and lunch.

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    2. I agree. I have deducted the cost of the kids' programs and mileage in previous years. I haven't deducted lunch.

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    3. I don't think you can deduct the cost of kids' programs, because child care is not a business expense. It may qualify as a dependent care credit, but you would have to report the child care person's social security number on your return as well.

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  6. In other words, if the course helps them keep pace with the marketplace demands (or improve their skills) or if they need the course to actually keep their existing jobs, then the expense may be a legitimate deduction.tax write offs

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  7. Most tax advisers charge a fee for each form that they have to fill out, and for some it can be quite expensive. However it may end up costing you more if you do your own taxes wrong.guarantor

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So, what do you think?