trumpettrax

Well, just wanted to get some opinions on starting a home based business. I was told that working out of your home as a freelancer and teaching you could write some things off on your taxes. I was told that any furniture you purchase i.e. music stands chairs etc for lessons could be written off and that purchases of instruments could be done also. Cell phone bills etc. Is this true? Does anyone know for sure, maybe you have already done this?


curious,

trax

trpt2345

That is correct. But the deductions can only be made against payments that are not subject to witholding, i.e., when someone pays you directly. You have to declare the income too. Keep records. Other things you can deduct:tuxedos and their upkeep, mileage driving to gigs, CDs, sheet music, computers that you use to keep track of your business and store music and charts, part of your medical insurance if you pay for it yourself, and a home office deduction, which has been made easier to do the last couple years. If you have a home office you can deduct part of the rent or mortgage, property taxes, utilities and insurance. Consult a tax pro, especially one who specializes in working with musicians and knows the issues. Good luck! It's a crappy business.

Michael McLaughlin

"Madness is rare in individuals, but in groups, parties, nations and ages it is the rule."
Nietzsche

brian moon

If you can take an home office deduction you can also write off a percentage of things that are used to upkeep your house such as:

Lawn and snow equipment, heat, electric, water, cleaning and plumbing costs. You can write off all items used exclusively in your office (light bulbs).

You had better be able to prove it though. Sit down and talk with someone who knows.

TrentAustin

FWIW:

I had a friend who was burned on the home office deduction by writing off things outside of the home office (like a snowblower!). Be careful on this deduction as the IRS will NAIL you if anything looks fishy. I have an entire basement as my studio/home office and love the tax benefits from having it take up a large portion of my home (affordable housing where I live comes in extra-tiny sizes only).

brian moon

Trent, he should have told the IRS to stick it. A snowblower is legitimate. You can be sure that GM writes off theirs. You just take the same percentage as your offfice is of your house.

If you don't shovel your sidewalks it is bad for business.

I didn't write off mine because I didn't know that I could at the time.

IRS people lie through their teeth.

trumpettrax

I was told also that the purchase of instruments could be written off also. What do you think? I will definitely seek out the tax professional, but just wanted your ideas. Thanks for the input and help!

brian moon

Instruments are the main tools of your trade. Why not? Also, any music, recordings, radios, and supplies for such (batteries). You can take a percentage of your computer. How much do you use it for business? Reading this forum is part of your business.

Alex Yates

All of this is fine and dandy, but the most important ingredient is to make sure there is documented income generated by this business.

When I entered grad school, I had reportable income from freelancing the previous years. Since Eastman billed our tuition and our applied lessons separately, I was able to write off thousands of dollars in applied fees for each semester. That came to a pretty hefty total, so I was happy about that.

brian moon

Good point Alex. No income no business. It's propbably not a good idea to start your first year with a $10,000 loss. That is asking for trouble.

trumpettrax

Supposedly "they" don't expect you to make a profit for the first 5 years right? That is what I was told. I guess this is all guessing and I need to consult a tax professional anyway huh?

Thanks for the advice!