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.

1Watch the Finances and Tax Video
2Download the Business Expenses Categories Cheat Sheet
3Download the Tutor Finances Tracker
4Watch the Sole-Proprietor, LLC Video
5Read the Cliff Notes about DBA, Sole-Prop, LLC, S-Corp, C-Corp

You are rocking this course!  I believe that every business owner needs a copy of EMyth Revisited by Michael E Gerber.  It helps you reframe the entire way you're building your tutoring business.

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