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Tax question for the private guitar teachers out there...

jamminoutloud1

Silver Supporting Member
Messages
1,331
Here is a question for you guys...
I have been teaching privately in NYC for some time now, and usually get paid in cash.
Just curious what I should be thinking about when it's time to pay taxes? What do you guys usually do? Any advice would be most appreciated!!
 
Messages
8,093
Well, are there any IRS watchdogs on this forum...? This past year I worked mostly with one band and was W-2'ed on that (considerable) income. It totals enough that I will probably not tell anyone about my additional cash income. Other years it's almost all free-lance (cash) work so I generally declare all (or most) of it.
 

tone4days

Silver Supporting Member
Messages
6,680
yeah, dollar thresholds matter some ... but i na larger sense, i recommend that you consult a tax accountant to get established with your quarterly payments, etc ... you dont want to be socked with a lump sum at the end of the year which might also include penalties, interest, fees for underpayment thru out the year
 

bynt

Member
Messages
2,130
yeah, dollar thresholds matter some ... but i na larger sense, i recommend that you consult a tax accountant to get established with your quarterly payments, etc ... you dont want to be socked with a lump sum at the end of the year which might also include penalties, interest, fees for underpayment thru out the year

I have an odd situation wherein I kind of rent a room from the store so I'm technically a private contractor but my students go through the front. Point being that my income is really traceable and I don't think it's worth it to try to duck anything personally. Bottom line? I get screwed HARD on taxes. I'm trying to start a quarterly payment schedule so I don't get fragged come tax time. I'm SO broke on paper but because I "own my own business" I get positively reamed for taxes. The above quote is sound advice!!!!
 

jamminoutloud1

Silver Supporting Member
Messages
1,331
Has anybody here have any real firsthand experience with paying taxes on private lessons?
I travel and teach from my apartment. So I'm wondering if I could use my rent as a taxdeductable, and what the rules are with all that?
 

bynt

Member
Messages
2,130
Has anybody here have any real firsthand experience with paying taxes on private lessons?
I travel and teach from my apartment. So I'm wondering if I could use my rent as a taxdeductable, and what the rules are with all that?

Yes and perhaps yes. You can deduct a lot of stuff but I stress that you consult with a CPA for that stuff. I did so and I can right off a bunch of stuff but some of it I can't. If you write stuff off you're going to want to declare what you make though. IMHO. Like I said, it's a good idea to talk to a CPA!!!
 

Luke

Senior Member
Messages
11,895
Home offices are a IRS red flag these days and will likely trigger an audit. Mix in, I got paid in cash and you have a headache on your hands.

You can deduct travel expenses if you log them.
 

khromo231

Guest
Messages
457
Home offices are a IRS red flag these days and will likely trigger an audit...
You can say that again, in bold capitals, except for the part that says "these days"! Home offices have always been one of the brightest of red flags for the IRS. The rules are almost universally misunderstood by non-tax-professionals (and a great many CPA's and accountants fit into this category), and myths abound. Many CPA's are not fluent in tax law, and IRS auditors and revenue agents have an easy time making what they call "adjustments" in that area.

In most cases, the deduction won't amount to much for most persons if you follow the rules, and the grief and aggravation an audit will cause is almost never worth the minimal reduction in your tax liability. Many persons who are legitimately entitled to the home office deduction don't take it to avoid triggering an examination, which will almost always involve other issues and quite often expands to other years.

If you want good advice, you need to get off the public internet boards because they are rife with misinformation. Don't assume a CPA or accountant knows anything about taxes, because many don't. You need to consult someone who specializes in income taxes, like an enrolled agent or tax attorney. Don't bother during tax season, as they are all too busy. Get up with a credentialed pro and book an hour or so to get trained in how to handle your income, and how to document your deuctible expenses.

Fishing on the internet will confuse you at best, because you won't be able to weed out the nonsense from the facts. Some of the well-intended advice offered can get you into an enormous hole down the road, when a few years worth of tax liabilities, penalties, and interest can hit you like an avalanche!
 

stevebandworks

Gold Supporting Member
Messages
144
Paying an expert to do my taxes is the best money I spend all year. I have taught out of my home for 17 years, paying taxes and taking all proper deductions, including home office. Never had any audits. I can highly recommend the folks who have done my taxes all this time, and can give you their info if you want to send me a pm.
 




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