Dear Carol,
I am a homeschooling mother of three. I recently named our homeschool and incorporated the name to offer tutoring and testing for income (in my home). What do I need to do to report the income to the IRS. Should the name be a LLC. or S-Corporation? If you can shed some light on how I need to handle this, I would greatly appreciate it. I need the income to continue homeschooling, and this is unfamiliar territory for me. Thank you in advance for help.
Connie
Connie,
Thank you for contacting me. I wish you the best of success in your new endeavor as a business owner! It can be exciting and overwhelming at the same time.
You said you incorporated the name. What specifically did you do? Did you merely register the name or did you file incorporation papers with your state? There is a big difference with respect to taxes.
Most tutors start out as sole proprietors and never progress to S Corp (or the larger C Corp) status. There is no need to be a corporation for most tutors. This blog post I wrote might be helpful: Why You Should Be a Sole Proprietor
You might benefit by reading my articles and ebook, Small Business Start Up Guide, available at https://caroltoppcpa.com/services/small-business/
Sole proprietors file a Schedule C as part of there individual Form 1040. A Schedule C shows all the income and expenses of the business.
Corporations have different IRS forms that are much more complex and usually require a CPA to prepare.
I hope that helps. There is a lot to learn!
Carol Topp, CPA