Taxes

Parent Cafe
1

<p>I am 17. I plan on tutoring SATs for money. Do I need to pay taxes if I ask for cash?</p>

2

<p>Yes, if you earn more than $5,000 during the calendar year. (I am assuming that you don’t also have unearned income, such as investments or interest, in which case filing requirements may be less). This is for the tutoring job in combination of any other job that you have – so for example if you already earned $1500 from a summer job, then you would have to pay taxes when your tutoring income reaches $3500. </p>

<p>You should get in the habit of keeping good records. Make a ledger or spreadsheet and keep track of all your income and also keep track of expenses related to earning - such as if you pay for supplies (like SAT review books) or costs of transportation to and from the homes of the students you tutor. </p>

<p>If this is your only job, you probably won’t make enough money to have to worry about this, but later on in life you will be very happy if you already have the habit of keeping good records, because it will be easier to figure your taxes if everything is written down. </p>

<p>You can find out more about filing requirements in IRS Publication 501:
<a href=“http://www.irs.gov/publications/p501/ar02.html[/url]”>http://www.irs.gov/publications/p501/ar02.html&lt;/a&gt; or
<a href=“http://www.irs.gov/pub/irs-pdf/p501.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p501.pdf&lt;/a&gt;&lt;/p&gt;

<p>Also, it doesn’t matter whether the people who hire you pay cash or give you checks – legally the requirements are the same.</p>

3

<p>Calmom - you rock. Great advice. :)</p>

4

<p>The $5000 limit applies to income earned when you are working for someone else, who presumably is withholding taxes. However, it sounds like your tutoring job is self-employment. In that case, you are subject to the self-employment tax as soon as your income reaches $400. The self-employment tax is 15.1%. You will have to file income tax returns and pay the tax whether you are paid by check, cash, or baskets of apples.</p>

5

<p>Thanks for the advice. Thank goodness. I only earned $200!</p>