You’ve worked for a lifetime to become a professional — an artist, musician and teacher. But how confident are you when it comes to filing your income tax?
Are you sure you’re claiming everything you can? As a small business owner, you can claim more than just music books and pencils!
There are tricks that will give you the full benefit of your expenses so that you can reduce the amount of tax you owe.
Keep more of the the money you earn!
Disclaimer: Though I use the tax program Turbotax and refer to it throughout this blog post, I have no affiliation with the company and am not being financially compensated.
If you teach piano in your own home, you can claim a portion of your home expenses. These are expenses you’re already paying for! And because you use your home for your business, you get to claim a portion of the expense against your earnings to save on the amount of income tax you owe:
- Mortgage interest
Keep track of all bills and payments throughout the year. At tax time, enter the full amounts paid and Turbotax will calculate the amount you are allowed to claim against your income.
The formula is based on the number of rooms you use for your business compared to the total number of rooms in your house (or the area).
For example, this year my husband and I resurfaced our driveway. My piano families drop off kids, park and access my studio here, so we’re able to claim the same percentage for this “maintenance” that we do for our furnace oil and other home expenses.
Claim expenses for running your piano studio. You must have receipts to back up these claims. This list includes these and other headings:
Think Facebook ads, website fees for design and hosting, email marketing, business cards, brochures and print ads.
Anything you buy, from pencils and erasers to stickers and sticky notes. You can claim every expense directly related to your your teaching activities.
Piano Studio Business Claims: The best things in life are tax-deductible Want to pay less in income tax? Find out how investing in yourself and your piano studio can help you level-up as a small business owner. It’s a win-win you can’t afford to miss!
This might include paying to use TurboTax to file your income tax, having your piano tuned, etc.
Do you use your car to drive to students’ homes? To calculate the mileage travelled for your business:
- Write down your odometer reading on January 1st of the taxation year, then again on December 31st at the end of the year.
- Use Google maps to calculate the distances you drive for each lesson appointment. This is easier than writing down the odometer reading for each trip.
- Multiply the distance by the number of “travel” lessons (or if you drive house to house, per round trip), and your claimed distance will be calculated against your overall distance covered for the year.
The heading “Other” in Turbotax is where you can claim business-related travel. For example, the cost of your flight and accommodation to piano teachers’ conferences.
Instead of paying higher income tax, attend a conference and invest in your career and qualifications!
If you lease equipment, it is also claimed under this heading.
Meals and Entertainment
If you travel to teach and need to eat on the road, keep your receipts.
You may also be able to claim concert tickets throughout the year, as attending live concerts can be considered part of your ongoing professional development. Ask your accountant how this works in your country.
These categories may apply to music school owners: Salaries, Wages and Benefits; Licenses, Business taxes, Dues; Commercial Insurance; Business Property Repair/Maintenance; Business Property Rent; and Business Property Utilities.
How do you claim large business purchases like your piano, computer and studio furniture? These fixed assets have lasting benefit for your business and cannot be claimed all in one year. Instead, you’ll write off these costs over time with depreciation.
When you input these acquisitions into a program like Turbotax, they are saved for future years and the depreciation and amount you can claim is calculated for you over time. According to Turbotax, “Your per-year claim depends on how your expense is classified….”
Have you been ghosted by a piano family that still owes you money for lessons you’ve already taught? This is a doubtful account. Turbotax says, “If you’ve previously included a receivable amount in income, but have now determined that you will be unable to collect it from the customer…” enter the amount into this field. Of course, if you recover the debt later, you’ll need to re-enter it as income in the year it is received.
When is it due?
Here’s information if you live in the United States >> U.S. Tax Filing Deadlines.
In Canada, income tax must be filed by April 30th. If you owe on your return, it’s due by this deadline.
June 1st However, in Canada, independent business owners have until June 1st to file. If you don’t owe on your return, you may submit it by this deadline without penalty.
It took a lot of research to figure out which industry code to use for piano teaching. This is because it’s difficult to define what piano teaching is, exactly. Where in the economic sector does it truly belong? Is it in the arts? Is it an educational service? A professional service?
When self-employed Canadians (like piano teachers) file our income tax, the Government of Canada collects data on how we earn our living with the use of industry codes.
According to TurboTax, “They use this code mostly for statistical purposes to compare work types and to establish trends in different industries. Don’t worry — this code has no impact on your tax return.”
For my piano studio business, I finally settled on using Industry Code 611690, which fits into the “Educational Services” section (in Canada).
I file my music publishing business separately and use industry code 711513, which is for independent writers and authors (in Canada).
Piano Studio Business Claims: Things that spark joy can be claimed at tax time. Turn your piano studio wish list into your Christmas wish list. What you open up on Christmas morning can be exactly what you need for your business, and if you save receipts, can be claimed against your income tax! Keep reading to find out how!
Make sure you’re getting the full benefit of your expenses so that you can reduce the amount of tax you owe!
The main thing to keep in mind: only claim reasonable expenses that you can back up with receipts.
Then, use the money you save to re-invest in yourself and your piano studio business!
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I appreciate shares, comments and likes. Happy teaching! ❤
Video of the Week
Irving Berlin’s That Mesmerizing Mendelssohn Tune (Elementary, Prep A). Arranged by Rebekah Maxner for beginner with optional duet. This early hit helps students shape long phrases and balance softer harmony notes. From the print and eBook TITANIC A Voyage in Piano Music Elementary, or check out the Mesmerizing Mendelssohn Tune eSheet!