Advice for Msician related expenses

I wonder if I could get some education about one increasingly complex area of our tax situation. My wife is a musician but does a number of different things in that general area. I'm confused about which things are tax items and which are not. Some are obvious, such as not being able to deduct membership fees to local bands she plays in where she gets no income. Others might be deductible because of several of her activities, such as instrument related expenses.

My wife does several things as a musician, with my guess as what might be relevant to which activity:

  1. She is a music teacher. She has been teaching at various levels (elementary, middle, high school) for about 15 years. She now teaches music at a community college. This includes giving private lessons and conducting various ensambles as well as class work.
  2. W-2 income. 2. Misc. expenses. (Music purchases,water and cake for the band she conducts, etc.) 3. She takes yearly workshops in conducting to improve her skills. (Travel expense, Workshop expense, etc.) 4. Membership fees in professional organization.
  3. She is pursuing her doctorate in music. While not required to hold her current job, earning her doctorate degree will get her a promotion to Assistant Professor as well as a salary increase. She will also have the qualifications to teach at a university. Her options are open.
  4. Tuition 2. Tuition assistance from her current employer 3. Books 4. We bought a piano for her to compose on and pass proficiency tests. (About K) 5. She takes private piano lessons to meet performance qualifications.
  5. She freelances in a number of ways:
  6. She performs various local gigs for pay. (Churches, etc.) 2. She performs in local community bands for no pay. 3. She writes marching drill for pay. 4. Some expenses are:
  7. Parts for her instrument. (Case, reeds, guitar picks, sheet music) 2. Mileage 3. Computer software

Any help or advise to even get me pointed in the right general direction would be very helpful. Thanks much.

Reply to
Mike
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Playing in a local band may well be deductible even if she doesn't make money directly from doing that. It might give her business contacts, it might give her exposure, it might increase her skills, all of which are activities that justify deducting the cost of the activity.

I would think those are all deductible. Which are deductible from her W-2 income and which are deductible from her Schedule C income would be the question.

It seems to me those should be deductible. The education qualifies her for a better job in her same profession, not a new profession.

Again, I'd think those could all be justified as deductible.

The rule is that an expense is deductible if it is "ordinary and necessary." The word "necessary" in this context doesn't mean that her business will fail if she doesn't incur the expense. Rather it means that it either does nor realistically could help her business.

Reply to
Stuart A. Bronstein

Stu,

Thank you for your response. The reminder of "ordinary and necessary" is very helpful. Also, the thinking about contacts and so forth is good. We had not been thinking of her activities as a business before this but last year it has become so intense that survival dictates it. ;-)

Thanks again for your generosity.

Mike

Reply to
Mike

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Note that there is a special tax benefit for K-12 teachers that spend their own money on classroom supplies. If she still teaches at that level, this may be useful.

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Reply to
taruss

Instead of focusing first on what is deductible, you ought to focus on what is a business and what is a hobby (referring to the activities that aren't related to her work as an employee).

There are nine factors to consider, which you can find in various IRS pubs and at the web site.

Businesses tend to be profitable in most years, and incur Self-Employment tax in addition to income tax. They also add complexity to your tax return.

Reply to
Mark Bole

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