There were a lot of changes to the US taxes in 2018 and the IRS re-designed the Form 1040, so tax preparation in 2019 will be very confusing.
Here are some highlights of the tax law changes that affect homeschool business owners and that includes (nonemployee) teachers at a homeschool co-op, owners of for-profit homeschool programs, and tutors.
Yes, teacher and tutors are business owners! If you accept payment and offer a service (like a class), you are in business and are a business owner. If you teach or tutor as an Independent Contractor, you have a tutoring business!
Highlights of Tax Changes in 2018
- No more exemptions for each family member. This may hurt large families.
- Standard deduction increased to $12,000 S/$24,000 MFJ
- Child Tax credit increased to $2,000/child
- New Qualified Business Income deduction
- New tax forms: 1040 “postcard”
- Lower tax rates (12% for most of us)
The new Qualified Business Income deduction will help homeschool business owners. You’re going to love it!
The deduction is equal to 20% of your profit from a “qualified” business (sole prop, partnerships, S corp)
If your Taxable Income less than $157,000 Single or $315,000 Married Filing Joint, your business is “qualified.”
Look for this Qualified Business Income deduction on new re-designed Form 1040 Line 9
There is a lot to learn about running a business. I don’t mean to discourage you or anyone else away from operating a homeschool business. You provide a valuable service to homeschool families! I am offering this webinar to help you understand the tax implications:
I recorded a webinar on Tax Preparation for Homeschool Business Owners. It should be a lot of help to tutors, non-employee co-op teachers and other homeschool business owners! You can watch the recording at HomeschoolCPA.com/HSBIZTAXES for a small fee of $10.
Carol, thank you again for the webinar. It was one of the BEST webinars I’ve EVER attended. If you do hold another one, I would pay for it hands down. Totally worth the $10!“ -Denise, webinar attendee
“I actually don’t care for webinars at all – it is not my learning style at all and I struggle to focus, but this one was extremely value and had my attention”. -Mary, webinar attendee
I hope that helps,
Carol Topp, CPA
Helping homeschool leaders