How should tutors for a homeschool program handle their employment 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.
The closing of Landry Academy in late December 2016 was 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.
So what should a tutor (i.e. the worker classified as an independent contractor) do if she thinks she is misclassified and should be treated as an employee.
1. Always report in full ALL your earned income received from the homeschool program on your tax return, even if you do not receive a 1099-NEC or W-2.
2. Discuss your classification with the person who hired you, probably the owner of the homeschool program or a board officer such as the Treasurer. Express your concern for her potential liability if she is misclassifying workers. Tell her about this IRS website and my book Paying Workers in a Homeschool Organization.
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.
Most important is for you to follow #1: Report all your earned income on your tax return even if you do not receive a 1099-NEC from the homeschool program owner.
So if you are employed on a 1099 basis as a tutor, but claim 100% of the income on your tax return (and claim appropriate expenses against it – the tin whistle for the tutor, paper, dry erase markers, etc), could the TUTOR be in trouble? Is there a duty to report to the IRS? Or just opportunity?
The responsibility of any hired contractor is to report all their income to the IRS (even if the contractor did not receive a 1099-MISC) and pay their taxes.
The responsibility of properly classifying the worker as an employee or independent contractor is on the shoulders of the employer, not the worker. It is the employer who will pay penalties and taxes if they misclassified an employee as an independent contractor. I discuss those penalties in this blog post: What are the consequences of misclassifying a worker?