Can I deduct all tutoring income as business expenses for self-employment taxes?

While your education expenses are important, you can't simply deduct your entire college tuition as a business expense for your tutoring business. The IRS has specific rules about what qualifies as a legitimate business deduction. First, yes, you do need to report self-employment income over $400, and you will owe self-employment tax on your net profit. For your mileage question - absolutely yes! Keep a detailed log of miles driven specifically for tutoring (date, destination, purpose, miles). For 2025 tax filing, you can take a significant deduction per business mile. Regarding separating your tutoring income from gifts: don't mix these funds. Consider opening a separate account for your business income or at minimum keeping detailed records of every tutoring payment received with dates and client information. For college expenses: You can't deduct your entire education as a business expense just because it might make you a better tutor. However, you might qualify for education tax credits like the American Opportunity Credit or Lifetime Learning Credit on your personal return. You can also deduct specific expenses that directly relate to your tutoring business - supplies, materials, business percentage of your internet/phone, etc.

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So I tried taxr.ai after seeing the comment here and wow - it clarified everything for my music lesson business! I was making all kinds of mistakes with my record keeping. The tool walked me through exactly what counts as a legitimate business expense (music books, yes; general education courses, no). It also showed me how to properly document my home teaching space and travel between students. I found out I was missing out on hundreds in deductions! The expense tracking feature is super helpful since I also had income coming through multiple payment apps. Now I actually understand what I'm doing instead of just guessing and hoping for the best.

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As someone who's been tutoring for 5+ years now, here's some practical advice: keep EVERYTHING separate. Get a separate bank account, use a dedicated payment app account for business only, and track every single expense related to tutoring. For your situation specifically, you can absolutely deduct mileage (keep a detailed log), any materials you create for students, a portion of your internet/phone if used for tutoring, and any specific reference materials you buy to help with tutoring. But your general college tuition? No - that's considered personal education even if it makes you a better tutor.

Hey just a heads up - dont forget about the quarterly estimated tax payments if you're making decent money from tutoring! I got hit with a penalty my first year because nobody told me about this. If you expect to owe more than $1000 in taxes for the year, you're supposed to make quarterly payments.