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I have a Tutoring Corporation in California that employees

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I have a Tutoring Corporation in California that employees four full time employees and 35 1099 contractors that tutor students at the families' homes. Can I pay my 1099 tutors an hourly wage PLUS a travel stipend based on amount of miles travelled?
Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.

You can pay an hourly wage, but if you start paying a travel stipend, you're starting to treat the IC (Independent Contractor) as an employee. Let me explain, typically an IC is an independent business responsible for his/her own expenses, including mileage. When you pay a IC's mileage expense you're heading towards misclassification. Paying mileage is one factor that can point to employee. What I mean by this is that an employee would expect to be reimbursed for his/her mileage if they were driving to a client's house for business purposes, whereas an IC would normally tally up all of his/her business miles for the year and take a deduction for the mileage at the end of the year.
Further clarification,...if you include a travel stipend in the IC's pay, it will be considered income and the IC will be taxed on it.
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