LLC for Tutoring?

Curious, how much are you getting paid per hour and what subjects?

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Will not meet requirements to file for 2015, but expect to for 2016

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If you have any income from the tutoring in 2015 you will be required to report that income for 2015. There are no requirements to report income if you are already required to file an income tax return.

I'm assuming that because you are a FT employee, you are required to file a tax return.

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The big benefit of an single member LLC with no employees is liability protection. So I guess, are you likely to need that protection doing tutoring?

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I guess there would potentially be liability for lawsuits. I can't imagine what for, but these days it could be anything. I will be tutoring in students' homes.

I was asking more in terms of tax liabilities. From what I have been reading, filing as a sole-proprietor requires paying both employer and employee portions of payroll taxes. Does LLC change these rules?

There was also something I read about some argument by the IRS that at some point, a contractor should be considered an employee and therefore applies penalties. I doubt I will get to that point, but supposedly an LLC protects from this as well.

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you should consider going on your own and avoiding taxes

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Umm...

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I was asking more in terms of tax liabilities. From what I have been reading, filing as a sole-proprietor requires paying both employer and employee portions of payroll taxes. Does LLC change these rules?

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LLC is a state authorized entity, not a tax status. If you don't form an LLC, you will file a Schedule C on your individual tax return to report your income and deductions. Your net income from the business may also be subject to self-employment tax (if the net income from self-employment is over $400). You pay this tax generally on 92.35% of that self-employment income. Depending on your other earned income, the rate will be 15.3% or 2.0%. You may also have to pay additional medicare tax on the amount of 0.9% depending on your total earned income.

If you form an LLC but choose to be taxed as a sole prop, you will do the same as above.

If you form an LLC but choose to be taxed as an S Corporation, you will file a seperate tax return for the S Corp, you will pay yourself a salary, you will have payroll tax payment and reporting issues inside the S corp, etc. Based on the amounts we are talking about, this is probably not a good idea for you.

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There was also something I read about some argument by the IRS that at some point, a contractor should be considered an employee and therefore applies penalties. I doubt I will get to that point, but supposedly an LLC protects from this as well.

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That's an issue, but it's an issue for the company paying you, not for you. They are the ones who determine if you are an employee or an independent contractor, and if they get that choice wrong, they are the ones that are penalized. You doing the work through an LLC might be a small, small positive for the company to treat you as an independent contractor, but it won't be the deciding factor, usually. There is a 20-factor test used to make that determination.

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LSUFanHouston

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That answers all of my questions, thank you very much for your time.