Tag Archives: musician

Estimating Income for Musicians

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Now that tax day has finally come and gone, many private lesson teachers are experiencing a sense of relief. Now that the next tax year has begun, it is important to consider your earnings for the coming year now, in order to avoid a big tax bill in the future.

Estimating income is difficult. This is especially true if your work is variable, and such os the case with private lesson teaching. Luckily, at this juncture in the year you most likely have enough information to get a realistic idea of your earnings for the coming year. Doing this now will save you the headache of substantial taxes owed next April.

If you are teaching summer lessons you most likely know your studio size for this season. Calculate your earnings for the summer based on weeks teaching and set it aside.

Next, determine your studio size for the school year. Will you be taking on more new students, than students graduating lessons or quitting band? Will you be adding any new schools or dropping schools from your schedule? Will there be any changes in the lesson rate? Now you can use this to determine income for your fall teaching. I assume a student will never miss a lesson for this excercise. I would rather overestimate now than underestimate and have to pay later. Combine this with your summer earnings, as well as money you have already made from January first to now,

Once you have arrived at this number it is important to also take into consideration any other income streams you may have, such as gigs or clinics, and include these if possible.

Lastly, take a look at your deductions from previous year. Are any of these no longer applicable for the coming year? This includes educational credits, or the witting off of one time purchases such as computers, tablets, or instruments. If you are losing a few of these big deductions you should be prepared to pay more taxes.

On the flip side if you see any expenses rising, this will increase your deductions. For example, your health insurance cost could be going up, or you may anticipate driving more work based miles.

You can now use your previous tax return as a model, by plugging in your new estimated income and making the same or revised deductions. You can also use this to determine self employment tax. Be sure to consult tax tables of thee has been a drastic change in income either way, as your tax bracket may now be altered. At the end of this exercise you will have an estimate on what you will owe next year, and can send in your quarterly vouchers accordingly.

This is an important procedure, and will keep you from a surprise bill next April.

Retaining your students

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The school year is winding down, and students must make a crucial decision. They must decide if they will continue in band, or quit band – and as a result, private lessons. Often times the private lesson teacher is the last person to know if a student is quitting band. This is frequently because the student may be uneasy to bring this up in conversation to you, the private teacher, directly. Also, band directors frequently know who is quitting but assume the student has already communicated this to their private teavher. Taking steps now can ensure you have a more accurate picture of who you will be teaching going forward.

Communication is key when it comes to retaining your students. Common reasons to loose students are preference for sports over band, general disinterest in band, desire to take numerous advanced placement courses over band, moving, and obviously graduation.

I send an email to my entire studio at this point of the year, it reads:

Hello,
I have very much enjoyed teaching your student this year. Going forward if you would like to continue lessons no further action is needed. I will keep your student on my studio roster. If your student is no longer continuing band please let me know.

I know this may seem like you are inviting your students to quit. You are not. Most likely your students have decided this well before you send this email. It is far better to know who you will be losing now and plan accordingly, rather than schedule a time for next year only to find out they have quit band.

When doing this exercise there are always surprises. You are clearly aware your senior students won’t be returning, but some students respond they are quitting that you either feel are talented, or that you enjoy working with a lot.

Once you find this out, there is usually enough time left in the school year to switch their class schedules if you can persuade them to stay in band. Try talking to them in their lesson about the cause for their quitting. If it is a scheduling issue regarding sports or academia many times a solution can be reached. Often times students will just quit band and choose the other activity because they assume there is no solution. Frequently this can be resolved with good communication amongst the parties (students, parents, band directors, and other teacher/coach) and enough lead time to enact a resolution. When bringing this up with your students, do it in a causal way. If they interpret the conversation as aggressive, you may not achieve the desired result.

Once you have a final count of which students will be back, and who will be leaving I make a list of every student by school, and then band class if applicable. From here you can see where you have a lot of students, and where you can expand. You can also see what classes you have more time slots to teach and then can begin looking for new students to fill these slots. It is by far easier to communicate to new students about next year during the school year versus the summer because people check their email much more frequently during school.

I also try to use this time year to get information on who my new beginning students will be. Again, the band directors will be easier to get in touch with now rather than July. Usually, beginner parents are very enthusiastic about band in general, especially lessons. I like to send a mass email out to all incoming sixth grade saxophonists before school is over to see who wants lessons. This way you have a handle on both incoming and outgoing students.

Once you have acquired this information all that is left is to schedule your students. With the headache that is student scheduling you can rest easy knowing your previous work will ensure all your students scheduled are indeed still enrolled in band.

Tax tips for the private lesson teacher Part 1-the basics

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Tax time is here. This can be an inconvenience for everyone, especially self employed musicians. Wheather this is your first year filing taxes as a self employed musician, or you are a veteran of the process, below I will offer some explanation of the challenges self employed musicians face and how to get yourself in the best situation possible when it comes to limiting your payments. Below is part one of my posts on this topic. It outlines the basis concept of self employed taxation. Look for my upcoming part 2 post on maximizing your deductions next week.

If you are doing a lot of teaching or performing it is likely taxes are not being withheld from your pay checks. Besides the federal income tax all individuals pay, the self employed must also pay what is known as self employment tax. This goes toward things such as social security and Medicare. If you are employed on a payroll, your employer covers half this and the other half is deducted from your paycheck each month.

Self employed individuals must pay this tax along with federal tax, so it can often times be a much higher tax bill. There is a deduction on this that can be taken to help offset the cost, but it is good practice to know what you are paying as a musician and why.

To prevent you from oweing a huge tax bill on April 15, musicians should submit quarterly tax payments using from 1040ES. To make this a successful procedure estimate your total tax for the year and divide it in 4. On these days: 4/15, 6/15, 9/15, and 1/15 you must mail this form in with a check to the United States treasury and your SSN number on the memo line.

Tax years are not calendar years. They begin and end on April 15. So, if you are new to this procedure you can get a fresh start on the 15th for the 2015 tax year. Obviously, this circumstance requires planning a head and saving. If you are not sure how much to pay, just submit some type of payment and begin planning a savings strategy for June 15.

The ultimate kicker of this procedure is often times teaching or performing can be seasonal, with things winding down in May. The June payment is still looming and  a savings account is key to making these payments. It is very easy to be unaware that money you are receiving has yet to be taxed so save frequently, and over time you will develop an idea of how much you will need to save toward taxes.