Is a homeschool tutor an employee of the family who hires her?

Teenager&Teacher

I am hoping you can help me. I recently got hired as a homeschool teacher. I am reading articles that say I am not an independent contractor and this is really concerning me. I am hearing that I am an employee and to do things legally my employer has to fill out all this paperwork.

I want to be legal, but I don’t want to burden my new employer with all of this.

She did give me materials, an hourly wage and the times she wants me to come over.
Thanks,
Stephanie

Stephanie,

Thank you for contacting me. Worker status as an employee or independent contractor is a difficult and confusing issue.

What the IRS says about worker status
The IRS says that the facts and circumstances of each situation determines the worker status, not our desire to avoid paperwork and taxes(!). But they are the IRS, so of course they will say things like that!

What to do as a independent contractor
In practice, you and the family who hired you need to have a common understanding of your employment situation. If you agree to be an IC, then make sure you act like one. Have a written agreement stating you agree to do a certain job for a certain amount of pay. Both parties should sign it. Invoice the family on a regular basis listing the times and hours you worked for them. Make sure the family does not tell you how to do your job; you should already know how to do your job. You should also bring your own tools and supplies, although the student can have their own school supplies and books as well.

I think it is also fairly typical for private tutors to be ICs rather than employees. You are much like a piano teacher who agrees to go to a family’s home to teach. The IRS has a tendency to look at industry practice when determining worker status.

You cannot avoid some paperwork
Make sure the family gives you a 1099MISC and you report the income on your taxes at the end of 2014. You should also fill out a W-9 form Request for Taxpayer Identification Number and give it to them, so they have your legal name and SSN.

All these practices will help confirm your worker status as an IC, rather than an an employee.

I hope that helps.

Carol Topp, CPA
HomeschoolCPA.com

Comments

  1. Kayte Tebang says:

    Thank you for posting this.

    How should CC tutors handle their situation? They are required to use a specific curriculum, during a specific time and attend training.

    In light of Landry Academy switching to employees but still not being able to stay in business, I am wondering what your thoughts are.

    Many Foundations directors could be putting their families at risk.

  2. Carol Topp says:

    Kayte,
    The closing of Landry Academy is certainly sad and an eye opener. I don’t know the details of what happened to them, but it does seem they underwent an IRS audit and had to reclassify their teachers as employees.

    I usually advise the business owners (or nonprofit leaders), in CC’s case, the Director of a CC community. But you are asking what should the CC tutor (i.e. the worker classified as an independent contractor) do if they think they are misclassified and should be treated as an employee.

    1. Always report in full ALL earned income received form CC, even if you do not receive a 1099-MISC or W-2.
    2. Discuss your classification with your CC Director. Express your concern for her potential liability if she is miscalssifying workers. Tell her about this IRS website and my book Paying Workers in a Homeschool Organization. I also offer a service for business owners like CC Directors to help them correctly classify and compensate their workers.
    3. Discuss your classification with your tax preparer. Seek his or her opinion on whether you wish to take advantage of the IRS reporting program. Visit this IRS page for details: Independent Contractor (Self-Employed) or Employee? If you do not have a tax preparer, you can arrange a phone consultation with me to discuss you particular situation.

    Most important is for you to follow #1: Report all your earned income even if you do not receive a 1099-MISC form your Director.

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