 The Clarinet BBoard
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Author: clarinetguy ★2017
Date: 2013-01-02 15:12
Quick questions for those who teach private lessons and file Schedule C (self employment income):
If your instruments are used mostly in teaching, can the cost of repairs be deducted?
Can the cost of reeds and sheet music (used in teaching) be deducted?
From my research, it appears that the answers to both questions is "yes," although I wasn't able to find anything in any IRS publication that directly answered these questions.
Post Edited (2013-01-02 15:12)
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Author: Steven Ocone
Date: 2013-01-03 23:33
Yes, Yes, Yes and there are probably a lot more Yes's you haven't even considered. Take a trip to buy reeds - deduct mileage. Teaching studio in house - more deductions.
Steve Ocone
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Author: Dileep Gangolli
Date: 2013-01-04 00:31
Milk this for what you can....
A home studio should be a profit center (Please check with your accountant but make sure your accountant knows the music and entertainment business).
Everything you have asked about is an automatic deduction and should add to your bottom line. Instruments can be expensed or depreciated. The IRS code is changing rapidly so things may change for 2013.
And I agree with Steven, mileage is a huge opportunity but even I do not keep a careful enough book to really do justice to this perk for the self-employed. You really have to keep a log book in the car and then be meticulous with recording your business trips to make this a home run. But for a working teacher/musician, this should be a huge offset to income.
For musicians who declare income from private teaching and freelance performing, Schedule C is a gift from the IRS and is an example of how the US tax policy does indeed stimulate free enterprise through creating opportunities for small business.
DRG
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Author: DAVE
Date: 2013-01-04 04:32
Things to consider:
Your deductions will not matter unless they are more than the standard deduction.
If your deductions cause you to show a "loss" then that is okay, actually good IMO.
Things I used to deduct:
cell phone bills
internet
utilities
reeds
music
cds
mileage
depreciation of assets
medical expenses
clothes needed for performances
I was a freelance musician and taught from my home. Of course, you really should consult a tax pro rather than getting info here. I used Turbo Tax and it was relatively easy to get all of this done.
Another thing: While showing a loss for your business may help in the short term, it could get the attention of the IRS if you do it year after year. Also, showing a loss will significantly hinder your ability to buy a home, etc.
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Author: johng ★2017
Date: 2013-01-04 13:56
To Dave: I am not a tax expert, but I think if you are using Schedule C, then these are business deductions against business income and not subject to the standard deduction test for itemized deductions put on Schedule A. Clarinetguy, if you are uncertain about how to handle your business expenses, go to a qualified accountant at least for one tax return to get the best and safest results.
John Gibson, Founder of JB Linear Music, www.music4woodwinds.com
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Author: jbutler ★2017
Date: 2013-01-04 15:02
One word of advice: Keep maticulous records of all income and expense.
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Author: clarinetguy ★2017
Date: 2013-01-04 21:51
Thank you, everyone, for your advice. I had a good year from private teaching, but this income is only a small part of my total income. My tax return isn't complicated, and the standard tax software usually does the job for me.
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Author: Dileep Gangolli
Date: 2013-01-04 22:23
Well like someone else said previously, use legitimate deductions to offset your studio income...what people have listed above are legitimate deductions and you are entitled to them.
No reason to pay Uncle Sam more than he deserves.
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Author: jbutler ★2017
Date: 2013-01-08 02:20
If you claim a home office don't be surprised if the IRS doesn't come by knocking on your door one day to see it. The office has to be 100% used for business and nothing else. Yes, it does happen.......I know.
jbutler
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Author: TJTG
Date: 2013-01-08 02:45
This was a note sheet given to me by a tax expert who specializes in musicians. I'm not giving out his name, but he gave me this handy sheet.
Trade or Business Expenses for Musicians
Generally, a taxpayer may deduct from gross income the ORDINARY AND NECESSARY EXPENSES paid to carry on a trade or business. An expense is ordinary and necessary if it is common in the music industry.
***Used on self employment Schedule C***
Examples of Trade or Business Expenses for Musicians
1. Advertising, printing, and photographs for promotion
2. 2. Arrangements used to produce income or auditions
3. Audition expenses
4. Benefits for employees
5. Books and subscriptions to professional journals
6. Charitable contributions
7. Commission paid to agents and booking offices
8. Computing software
9. Computers, palms, blackberry’s, PDAs, iPods, etc.
10. Copyright, and trademark expenses
11. Costumes (Not street clothing, major orchestra’s Tails and monogrammed clothing) NO SUITS OR TUXES
12. Dues – Unions
13. Dues and memberships – professional societies
14. Entertainment, meals and gifts -50% deductible
15. Home office studios (SPECIAL RULES) see form 8829 at www. IRS.gov
16. Instrument Rentals
17. Instruments (can be depreciated even if it is an antique)
18. Insurance or instruments –business loans for instruments
19. Interest
20. Job search expenses
21. Legal expenses for drawing up contracts
22. Manuscript paper
23. Music equipment –other
24. Music lessons and master classes
25. Music production costs (may have to amortized)
26. Office equipment - other (fax, copying, file cabinets, etc.)
27. Payroll taxes (except for your employees)
28. Pensions
29. Professional fees paid to accountants for income tax preparations and consulting
30. Recordings
31. Rent – office, rehearsal halls, studios
32. Rental of recording equipment
33. Repairs to instruments and office equipment
34. Salaries for staff
35. Sheet music
36. Sidemen and substitute pay
37. Stationery, postage and printing
38. Supplies and equipment needed to maintain and play instruments
39. Telephones and cell phones
40. Transcriptions
41. Transportation local: cabs, car expenses, tolls and parking
42. Travel expenses away from home: air, hotel, car rental, meals, tips, laundry, cabs, etc.
43. Website, DSL, Cable, email, etc.
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Author: clarinetwife
Date: 2013-01-08 14:42
Question: Are things like cell phone bills and internet service like home office in that they need to be only used for business? My dad used to have a separate business line at home because that was the way he could deduct the expense. It seems to me that for most people it would be hard to tease out the actual business use of your cell phone and computer.
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Author: Katrina
Date: 2013-01-08 17:38
My tax accountants have always asked me a slew of questions which help them to determine what percentage of phone/computer use are business. For me, I feel much more secure now that I've hired people to do my taxes. There are quite a few accountants out there who specialize in musicians/artists/entertainers/etc.
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Author: TJTG
Date: 2013-01-08 20:53
Yes. I remember from my accounting days of giving objects a percentage of use. Some people use their cars for personal and business use, and they keep track of miles used and such. Then certain portions of expenses are billed/credited to business and some to family, etc.
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Author: jbutler ★2017
Date: 2013-01-09 15:02
IRS has been debating the cell phone usage deduction for business. They may disallow it all together unless the phone is supplied by a company. The final decision has not yet been made.
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