UPDATE: I aired this podcast originally in 2014, seven years ago. It’s still very useful and paying workers is a topic that come up frequently for homeschool group leaders. I’ve updated this blog post with a few changes of IRS forms and links.
Do you pay workers in your homeschool organization?
Do you know what form to to filing with the IRS?
Homeschool CPA, Carol Topp, will share the details of what you need to know about paying workers in a homeschool organization in this 30 minute podcast. Part 2 of a 2 part series.
Be sure to listen to the first part of this podcast (Episode #17) where Carol explains the difference between employees and independent contractors.
Show Notes:
Applying for EIN. Use IRS Form SS-4. Read this helpful article first Getting an EIN from the IRS. (updated link)
IRS forms to give to independent contractors (IC).
- Use IRS Form W-9 to collect the IC’s legal name and EIN.
- Read IRS Pub 15A Employers Supplemental Tax Guide.
- Give Form 1099-MISC (UPDATE: as of Jan 2021, the Form is now 1099-NEC Nonemployee Compensation) to every IC paid more than $600 in a calendar year. Unfortunately Form 1099-MISC (now 1099-NEC) cannot be printed on your home printer. You must order them from the IRS or buy a set at an office supply store. I use FileTaxes.com (now called Yearli.com) to file and mail Form 1099-MISC. Yeali’s fee is now $5.50-$6.50 per 1099-NEC. (2021)
IRS forms to give to employees
- Collect a W-4 and an I-9 (Immigration) from each employee. Get employment forms at IRS.gov
- Read IRS Pub 15 Employers Tax Guide
- Give each employee a W-2 at the end of the year. (I recommend Yearli.com to file and mail the W-2’s to employees)
- Form 941 or 944 to pay your employer taxes (Social Security and Medicare). Find employment forms at IRS.gov. I use Yearli.com to prepare and file 941/944.
What to do if you are paid by homeschool organization an receive a 1099-NEC?
- File Schedule C Profit or Loss from Business of the Form 1040. List all your income and expenses from being a independent contractor.
- Pay federal income tax and self-employment tax (same as Social Security and Medicare for self-employed people) using Schedule SE (attached to your Form 1040.
Helpful Resources
Money Management in a Homeschool Organization
Paying Workers in a Homeschool Organization
And if you are a workers in a homeschool organization and receive a 1099-NEC or need to report your earnings even without an 1099-NEC, this ebook will be very helpful:
Taxes for Homeschool Business Owners
