Tutoring payment

Discussion in 'Teacher Time Out' started by John Lee, Jun 3, 2017.

  1. John Lee

    John Lee Groupie

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    Jun 3, 2017

    I'm tutoring now, currently accepting Paypal. I feel like cash would be best (i.e. under the table). Is that a legit consideration as opposed to Paypal? With Paypal (or any online transaction thing), it is so easy. But with this sort of "paper trail", is that problematic?

    The other thing I'm considering (recently got into) is other forms of currency. Accepting payment via bitcoin, actual gold (bullion/coins). In these cases, I would even give a discount on my rate. Is there any legal considerations with this sort of transaction?
     
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  3. teacherintexas

    teacherintexas Maven

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    Report all of your income. I coach on the side. Some parents pay in cash, but I always give receipts and report it as well. I'm not messing around on my taxes.
     
  4. swansong1

    swansong1 Virtuoso

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    I'm guessing that parents are reporting the tutoring payments on their taxes.
     
  5. a2z

    a2z Maven

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    I'm not advocating under the table, but how would they report that?
     
  6. jadorelafrance

    jadorelafrance Cohort

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    Employers also have to pay taxes on the income they pay their employees. So a parent who pays for tutoring and claims the money paid to a teacher is also responsible for paying taxes. This is like the "nanny tax" and I think this is why so many choose to pay under the table.
     
  7. John Lee

    John Lee Groupie

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    Any potential problems in accepting payment in forms other than dollars? Would I be breaking any laws or anything, or asking the other party to break a law (by doing so)?
     
  8. teacherintexas

    teacherintexas Maven

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    Have people offered to do that? If not, it seems very off-putting. I'd find another tutor before hunting down gold.
     
    czacza and vickilyn like this.
  9. czacza

    czacza Multitudinous

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    Are clients weighing out the gold according to current pricing? This just seems very odd
     
  10. viola_x_wittrockiana

    viola_x_wittrockiana Comrade

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    That's only if you qualify as a statutory employee and not self-employed. Odds are, tutoring falls under self-employment and not statutory employee status because the tutor usually sets the hours and methods. You still need to report though, especially in circumstances where the parents may be paying from an ed. fund or trying to write off some of the expense.

    OP, it's not the answer you want, but report all income. Seriously, it's better to pay the piper now than have this come up later and have to pay the delinquent taxes AND penalty, plus being flagged on future returns. File it as self-employment and you can write off expenses to offset some of the tax.

    I wouldn't get into bitcoin as payment, since you'd could end up paying more in taxes that way. Bitcoin is taxable in the US, both under income when received and under capital gains when spent/traded.
     
  11. John Lee

    John Lee Groupie

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    Thanks, that's great information. I will report it, and as for the gold/bitcoin question: it is just that I'm recently into alternate currencies, but like anyone else, I'm not inclined to actually go out and get some myself. My thinking was that if someone paid me in that way, I would accumulate it unconsciously. Viola, do you know a bit about this stuff?
     
  12. GemStone

    GemStone Habitué

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    I agree with all of this... and get a tax accountant.
     
  13. Linguist92021

    Linguist92021 Phenom

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    I also agree with reporting all income. But also keep records of all expenses: gas mileage, part of your cell phone bill (let's say 25%), any products you buy for tutoring (paper, pencil, etc), and marketing items, such as business cards, advertising costs, etc.
     
  14. Upsadaisy

    Upsadaisy Moderator

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    I tutor through an agency as an employee. I supplement that with independent tutoring for which I get cash or direct deposit. If you want to claim the income, also claim all expenses and document thoroughly. Let your conscience be your guide. An accountant is helpful to make sure you take all legitimate deductions and get a self-employment credit. You may be eligible to claim a portion of your phone and home office expenses, but only if you declare the income.
     
  15. futuremathsprof

    futuremathsprof Aficionado

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    I tutor only for cash, which is what I pay my bills in. ;)
     
  16. robbyfine

    robbyfine Rookie

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    Oct 15, 2019

    I like the very idea of bitcoin payment method. I'd like to benefit from it, but I'd rather do something that actually adds value to the bitcoin economy rather than play the speculator's game.
     
    Last edited: Oct 17, 2019

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