The Profitable Tutor Framework

Module 7 – Finances and Taxes

 Sole-Proprietor, LLC??  Which one?


**Disclaimer**  These are just my opinions.  Please consult with your local government and a CPA.  This information is meant as educational and not provided by a certified public accountant.  I am in no way liable for the outcome of your decision to become an LLC or C-Corp.

This is a video recording of an interview I did with my father-in-law who owned his own business for many years and also was an H&R Block tax preparer.  Enjoy!

Cliff Notes for this Video

Sole-Proprietor = Just you as the owner, making less than $20,000 per year gross

Limited Liability Company (LLC) = Just you as the owner + contractors, employees. Making more than $20,000 per year gross.  Gives you some protection from lawsuits.  Must file quarterly sales of digital or hard goods.

S-Corp = Just you as the owner or with a partner, employees.  Making more than $100,000 per year gross.  Must issue yourself a paycheck and pay taxes/payroll.  More hassle.

C-Corp = Owners, a board of directors, making over a $1,000,000 per year.  Think big corporations. Most tutors do not need to move to this level.

For starting tutors, just be a sole-proprietor until you hit the threshold of $20,000 gross per year.  Then file an LLC.  Most people will stay in an LLC for a long time.  No need to do an S-Corp until prompted by your CPA.  At that point, it's about tax savings and protection of assets and you.


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