[USER]

Can someone explain to me in basic terms the difference between just having a GE license, a sole proprietorship or an LLC with regard to a tutoring business? Also any costs involved on the legal side?

This is something I’ve only thought of recently so I haven’t had much time to research into the pros and cons, and the online info is more generic and not tailored to my specific situation.

Thanks.

[Steve]

I tutor through Wyzant and like it. They take 25% to take care of the business side. They earn their 25% in my mind.

As soon as I finish a session, they bill the student’s credit card and I get payment within a few days. At year’s end, they send me a 1099.

I am a lawyer so I’m tutoring mainly law students. I do this work as a sole proprietor, though I do have a legal malpractice insurance to the degree someone would claim I’m practicing law in this work. I’m not sure I’ll continue in the fall because my main gig is very busy, but we shall see.

Most tutors on Wyzant are for grades 4 through 12, as far as I can tell. Send me a PM if you’d like more info on Wyzant. I’m busy the rest of the day but could respond this evening.

Don’t miss: Do I need certifications like PMP? What are some other certifications?

[Lacey]

I cannot speak as to any specific credential licensing or requirements for tutoring…

But for your business structure: If you form an LLC and you are the sole member (aka: the only owner – no other partners)… the entity is automatically considered a “disregarded entity” by the IRS, and you are taxed as a sole proprietorship, which means you report all of the LLC’s income on your personal tax return. It is an option (and speak to a CPA to determine if this is a better option or not) to elect that your single member LLC instead be taxed as an S-Corp, which would mean it files it’s own returns and it pays you a salary as an employee, and then you report that salary on your personal 1040. This is a simplified overview and not legal or tax advice – engage a pro to fully understand the difference between these two tax structures.

Think of it this way… an LLC is the LEGAL structure – all it does is limit your liability so that in the event you are sued for something you did while conducting business, only the assets of your business (probably just a bank account) are liable – not your personal assets. Then you can choose the TAX structure of that LLC.

Hope that helps.

[Lisa]

Reminder laws regarding taxes and business entities vary state to state so it would be wise to consult with a CPA licensed in your municipality to discuss pros and cons of different ways to setup your side gig (LLC vs Sole Proprietorship etc.)

If you don’t go thru an agency that will handle the business side.

[Elizabeth]

Not sure of answers to your questions. Here to share that a lot of teachers use teachers’ pay teachers or VIP kids to make side cash.

Search the group to learn more about those options.

Don’t forget to take a look at: After 6 years of being a stay at home mom, I’m returning to work in August – So..

[Cris]

I tutored independently by referrals. I wouldn’t tutor my own high school students but the math teachers in the other schools for my district would give my contact info to parents of their students who needed additional help.

Back then, I accepted cash only, $50-$65/hour depending on the level of tutoring.

[Author]

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