If you have experience teaching or are knowledgeable in a particular subject, tutoring can help you earn some extra cash. Like with any other job, though, if you're not an employee, you're an independent contractor, and the Internal Revenue Service considers you a small business owner. If you keep track of your tutoring earnings and expenses throughout the year, reporting your tutoring income can be a piece of cake.
Grab a copy of Form 1040, the Form 1040 instructions and Schedule C from the IRS website.
Enter your personal information in the top part of Form 1040. This information includes your name, address, social security number and, if you're married, your spouse's information.
Check the box that refers to your filing status, and complete the "Exemptions" section. If you have kids, you'll also have to provide their information.
Complete the first part of the "Income" section using the income forms you received, which can include W-2s, 1099-DIVs or 1099-Gs. Stop once you reach the line labeled "Business Income or Loss."
Grab Schedule C and fill in the top part of the form, which includes information about the business, your social security number and the address of your business. If you operate the business out of your home, use your home address. The principal business or professional activity code for tutoring is 611000 for "Educational Services."
Enter your tutoring income on the first line in the "Income" section of Schedule C and follow the instructions to calculate your gross income.
Enter your tutoring expenses in the "Expenses" section on Schedule C. You can claim any expense that directly relates to your tutoring business. These expenses might include teaching materials and mileage. If you own or rent a building to run your tutoring business, you can claim any expense incurred to maintain the business. If you operate out of your home, you might be able to claim some of your home's expenses for business use of your home. Complete Form 8829, downloadable from the IRS website, to figure this expense.
Add all your business expenses together and subtract them from your gross income. This amount is your net income or loss.
Enter this number in the line labeled "Business Income or Loss" on Form 1040.
Complete Form 1040 to find out how much you owe or will get back as a refund.
- If you're subcontracted by a school or tutoring business, you might receive a 1099-MISC at the end of the year. This form includes the amount you earned and should be included in the first line of the "Income" section of Schedule C.
- The IRS is a pay-as-you-go system and you should prepay your taxes on your tutoring income. If you plan to owe more than $1,000 at the end of the year, you have to make quarterly payments to the IRS. For more information, refer to the Estimated Tax section on the IRS website.
Angela M. Wheeland specializes in topics related to taxation, technology, gaming and criminal law. She has contributed to several websites and serves as the lead content editor for a construction-related website. Wheeland holds an Associate of Arts in accounting and criminal justice. She has owned and operated her own income tax-preparation business since 2006.