How does Independent Contracting work for ONLINE music instructors?
Question by LateStarterMusician: How does Independent Contracting work for ONLINE music instructors?
How much taxes should they withhold and when they surpass what amount? I have teachers in all states. Do music teachers even have to pay taxes? Are music lessons taxed? What would an online music teacher keep track of? Webcam, other computer software??
Best answer:
Answer by v b
I hope you haven’t already been paying them. Failure to do the following can prevent *you* from claiming a deduction for money you paid to them.
1. Ask where they live and if they are a US citizen or resident alien. If either, continue.
2. You give each one a W-9 and tell them to fill it out.
3. If it’s not returned or there is no SSN, you withhold 28% of the pay and send it immediately to the IRS. (This is serious. YOU can be held accountable for the 28%.)
4. If it’s returned and there is an SSN, you keep a running total for the year.
5. At the end of the year, you issue a 1099-Misc with the total in box 7. Any withholding goes in box 4. The filing threshhold is $ 600, but you can issue the form for any amount.
Yes, this is taxable income to them.
If this is their only employment, they have to file if they make $ 400 or more. If they have other employment, they have to file the self-employment income at $ 1.
As for expenses, they can depreciate a webcam for the % of business use. Ditto for any specific software they have to buy to conduct the lessons (none?). They cannot deduct their internet subscription. But this isn’t your business to do their taxes–tell them to consult the IRS. 1-800-829-1040. The small business (yes, one person can be a small business) department can help answer their questions.
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