Disclaimer: this is not a tax advice, please consult a professional.
A tutoring business is afforded the same tax deductions as any other type of business.
The general rule of thumb is that you are allowed to deduct expenses for your business as long as they are used for normal operations of your business. This basically means that if you use it in the course of business, it’s probably deductible.
Here is a list of the most common tutoring tax deductions for tutoring businesses (or any home-based business):
- Accounting and legal fees
- Computer and software
- Internet and website services
- Contract labour – web designer, worksheet designer
- Furniture and office equipment
- Shipping fees and supplies
- Office supplies – pen, paper, toner, folders, etc.
- Advertising – business cards, flyers, car magnets, postcards, website, etc. (get any ideas here?)
- Mileage – use your car for business purposes
- Your Phone – do you have a cell phone or second line specifically for your business?
- Bank charges – business checking account
- Membership fees – Education resource websites, etc.
- Continuing education – teaching classes, accounting classes, marketing classes, basically any course you take to improve your business skills
- Business Use of Home – this allows you to deduct a portion of your utilities, mortgage, etc if your home is used for business. For example, if your office is 10% of the square footage of your home, then you can deduct 10% of those expenses.
This list of tutoring tax deductions for your business is pretty basic. Your experience may be different depending on whether you travel in your business, etc. In this case you may also be able to deduct costs for insurance for your vehicle.
It all depends on how your business is structured and how you use your assets in your business.
Fortunately record-keeping for most tutoring businesses is fairly simple and straightforward. Just remember to begin with a system of record-keeping and be diligent in keeping those records.