Attending conferences can be one of the best investments you make in your teaching career. Not only do you gain new ideas, skills, and connections, but many of the costs can also be deducted on your taxes.

Independent music teachers, owners of independent music schools and free-lance performers can all feel overwhelmed by the challenges of short and long-term financial planning. At times, it can seem almost impossible to get out of debt or start saving for retirement.

The business aspects of starting your teaching studio can feel like a daunting task. Teaching materials, technology, piano upkeep, accounting and organizational software—all of these initial needs cost money and prevent many teachers from taking the first critical step towards opening their own studios. The good news is that there are many ways to gather the funds you need to start your business without breaking your bank. Read more.

A new teaching year is under way. Months ago, you updated your studio policy, decided what to charge and communicated with parents. Yet, here it is October and not all parents have paid…

Check out some of our favorite tools for getting paid, tracking mileage, managing expenses and even saving money in 2022.

Business finance experts have countless metrics and complex ratios for tracking a business’s performance and financial health. But for the busy studio, a few studio metrics stand out because they strike a balance between simplicity and usefulness.

My favorite quote about planning for retirement comes from Chris Hogan, “The Retirement Fairy isn’t coming!” (2016, 113). Another favorite by Hogan, “The money you save while you’re working is the income you’ll have in retirement” (2016, 114). If you are in your 20s or 30s, maybe you feel like retirement is too far off to think about now. If you are in your 40s or 50s, maybe you are too concerned about house payments and putting your kids through college. If you are in your 60s or older…time is passing in a blink. No one wants to retire poor or continue to work far into old age, so here is the good news: There are specific steps that can be taken to secure the retirement years.

Most musicians are necessarily familiar with budgeting. We typically think of it as an allocation practice: the daily decision-making process of how to spend the money you have on hand. Take groceries, for example,the moment you begin drafting a shopping list, you are budgeting by allocation. Whether or not you write down the exact amount of money you are willing to spend, you likely have a general assumption of your limits and which items you need versus the ones you just want to buy.

You may not have set out to start a business when you started teaching music. But when you’re self-employed—even if it’s only part-time—that’s exactly what you’re doing. And managing the financial side of things (bookkeeping, tracking receipts, paying taxes, managing write-offs and more) is key to keeping your business on track.

Many teachers who want to set out on their own worry about how they are going to make money. After rent, bills and supply expenses, there is not much left to pay yourself, let alone if you want to run a multi-teacher studio and must pay employees. What if you could reverse your system, and instead of paying yourself with whatever is left over, pay yourself first and make a profit? Profit First by Mike Michalowicz offers practical, well-planned steps and exercises to assist entrepreneurs in their quest for financial security.

Let's profile the typical independent music teacher. She started music lessons at the age of seven, studied piano for eleven years before college, earned a degree in music and has taught for thirty years. She devotes herself completely to her fifty-six students during their weekly lessons, but she does much more than teach lessons. She plays for church on Sundays, accompanies the musicals at the high school, and gives theory and performance classes every Saturday. She teaches three students every morning before school, starting at 7:00 a.m., and finishes with the last adult students at 10:00 p.m. She practices daily and accompanies all the brass students in the high school solo and ensemble festival each year. She reviews new repertoire, goes to workshops and conventions, chairs committees, adjudicates, holds an office in her local MTA, and prepares her students for festivals, competitions and recitals. In other words, she is overworked!

An essential ingredient in a profitable business is the amount it charges for its services.

An essential ingredient in a profitable business is the amount it charges for its services. In any profession, supply and demand dictates what rates are viable in a particular area. A basic business principle states that tuition should be based on what the market will bear.

Insurance is an essential part of running any business. This four-part series takes a deeper look at insurance for music teachers. In this issue, Part 4 continues with a focus on musical instrument insurance. for Part 1 (overview), for Part 2 (general liability insurance) and for Part 3 (professional indemnity, sexual abuse and molestation insurance).

Insurance is an essential part of running any business. This four-part series takes a deeper look at insurance for music teachers. In this issue, Part 3 continues with a focus on professional indemnity and sexual abuse and molestation insurance. for Part 1 (overview) and for Part 2 (general liability insurance).

A four-part series of articles debuted in the previous to take a deeper look at insurance for music teachers. In this issue, Part 2 continues with a focus on general liability insurance and will also touch on workers’ compensation for studios/schools who have employees and commercial umbrellas for teachers who carry commercial leases.

Insurance is an essential part of running any business. Rather than thinking “I’ll take care of that later,” move insurance coverage to the top of your priority list. Exactly what types of insurance do you need for your studio business? Over the next four issues, Deborah H. How will take a deep look at insurance for music teachers.

What are the options if a student or family does not pay the tuition they owe? We all hope that this will never occur, but if it does, there are better choices than just “swallowing the loss.”

As a tax preparer and enrolled agent, I am asked quite often about taxes related to small businesses. Here are some of the most frequent questions that I’m asked pertaining to small business owner taxes.

1. What is the difference between an employee and an independent contractor in terms of my taxes? The fundamental difference between being an employee and an independent contractor is that independent contractors are responsible for all of their own taxes. As an employee, your employer is required to withhold federal, social security, Medicare and state taxes from your compensation. As an independent contractor, you are responsible for calculating and remitting your taxes to the government.
2. As an independent contractor, how do I report my income for my taxes? The good news is that an independent contractor does not need to file a separate tax return. An independent contractor reports their income on a schedule C which gets included with the annual personal tax return (form 1040).
3. What information must be reported on a schedule C? The schedule C has two parts. The first part reports your total revenue collected during the year (assuming you are reporting your income on a cash basis). The second part itemizes all of your business expenses related to earning your compensation. These business expenses are subtracted from the gross revenue to determine the net taxable income to report on your personal tax return.
4. Can I wait until I file my personal tax return to pay the income taxes for my independent contractor business? The answer is no. At a minimum, you need to calculate and pay your estimated tax on a quarterly basis. Failure to pay your estimated taxes related to your business could result in the IRS assessing an under-withholding penalty.
5. So, if I must pay my taxes quarterly, how do I do that? Once you have calculated your estimated tax liability for the quarter, you pay your tax by filing a schedule ES. This form includes your name, mailing address, social security number and the amount you are remitting to the government for the quarter. This form can be mailed or can be filed electronically on the IRS website (). The preferred method of filing is electronically, given you can obtain a confirmation number for the filing and payment of the estimated tax for the quarter.
6. If I have a second job (with W2 withholding) do I still have to file quarterly tax? The answer depends on how much tax liability you expect from being an independent contractor. If you expect your balance due on your annually filed tax return (form 1040) to exceed $1,000, then you will need to consider making quarterly ES payments. The potential for an under-withholding penalty is triggered when the net balance due exceeds $1,000. The only way to avoid a penalty when your balance due exceeds $1,000 is to make sure that 1) your total payments (W-2 withholding plus ES tax payments) pays at least 90% of the current year total tax or 2) your total payments exceed 100% of your prior year total tax liability (110% of prior year total tax liability if prior year income greater than $150,000 for a married filing joint tax return). The simple rule of thumb is to avoid a balance due of greater than $1,000 to avoid any possibility of an IRS penalty!
7. Do independent contractors pay more tax than employees? Not necessarily, but there are some differences to note. First of all, both employees and independent contractors must pay the employee’s share of social security and Medicare tax which totals 7.65% of compensation. However, independent contractors must also pay the employer’s share of social security and Medicare tax which also totals 7.65% of net taxable compensation. Employees don’t pay the employer’s share of social security and Medicare tax. Although independent contractors must pay both the employee and employer share of social security and Medicare tax, an independent contractor gets to first subtract their business expenses from their gross compensation to determine their net taxable compensation. By having the ability to only pay tax on the net compensation, an independent contractor might not pay more tax than an employee.
8. Is there any reason from a tax perspective to incorporate my independent contractor business? This is a very hot topic for small business owners. The answer to this question depends on the total expected net taxable income from the business. As an independent contractor, you must pay the employee and employer share of social security and Medicare tax on all of the net taxable business income. As an incorporated business, the business owner must draw a W-2 salary from gross revenue. The total social security and Medicare tax liability is only paid on the amount taken as a W-2 salary. Any additional money drawn from the incorporated business (assuming the business owner has chosen the S-corporation as the entity type) is considered a distribution of profits and is not subject to social security and Medicare tax. The business owner effectively has the ability to reduce their tax burden by limiting the social security and Medicare tax liability to the amount drawn as salary. The important fact to note is that it is imperative that the business owner draw a salary that is “reasonable.” In other words, you cannot take an unreasonably low salary to minimize the tax liability. The business owner has to consider how much they would pay someone to do what they do to determine a salary that would be commensurate with the services rendered by the business owner. The other factor to consider in this decision is the fact that an incorporated business must file a separate corporate tax return and must file quarterly payroll tax reports. This will result in substantially higher accounting costs which might negate the tax savings of the corporate tax structure. There has to be enough net taxable revenue to justify the additional accounting expense. My general rule of thumb is that there must be at least $20,000 of net taxable income to consider incorporation.
9. Are there any tax reference resources available to independent contractors? Yes, the IRS website has an entire page devoted to small business called “.”

Creating a financial plan is a crucial aspect of managing your money effectively, regardless of your age or career stage as a music teacher. Certain principles remain relevant for all teachers.

1. Set Clear Financial Goals

Navigating the landscape of financial planning is an essential aspect of a music teacher’s professional journey, characterized by self-employment, limited working hours and irregular income streams. When and why should a music teacher engage in financial planning?

The fear that the answer you give to this question will lose a desired prospective student may be the most important reason independent music teachers sometimes hesitate to charge a professional-level fee. Read more.

Running a private studio is both an art and a business. While most teachers spend years refining their pedagogy, far fewer devote time to building a financial structure that supports their work. Without a working budget, even experienced educators can find themselves stretched thin, unsure where their income is going, or reluctant to raise rates. A clear financial plan offers more than just numbers. It provides direction, stability, and the confidence to grow your studio with intention.

Many musicians dream of a successful career, but lack the financial tools to support their creative vision. By working with money mentor and accountant Katherine Pomerantz, I learned that business and creativity are two sides of the same coin.

Are you nervous about your taxes? As a CPA/piano teacher, I offer these Top 5 ways to successfully prepare your records for your tax return.

1. Keep Track of Car Mileage and Report Home Business Use: Don’t forget to count any mileage or home office deductions available to you each year. Make sure you give your CPA the square footage of the area of your home exclusively used for your studio, the total square footage of your home, the total mileage on your car and the business mileage on your car.Each of these four numbers is needed for your tax return to be filed, which means you need to track your business mileage throughout the year to give an accurate number.*
2. Organize Your Information: The more organized your information is the better. I personally use Excel/Google sheets to track my income and expenses and just create a column for each separate category. If you want to make your CPA’s job super easy look up a copy of a schedule C (the form your business activity is filed on) and look at the different categories the IRS has. Make your categories match the IRS and add other expenses as needed. The more organized you are, the less you may need to pay your accountant.
3. Get a bank account for your business: Get a single bank account to track your business activity. This will make it incredibly easy for you to track the income and expenses of your business in case you don’t keep track of your records on a consistent basis. This is one of the single most important steps you can take in case the IRS ever wants to audit your business—and you can send the bank statements to your CPA along with your summarized income and expenses for the year. This is the first recommendation we always make to anyone with a business.
4. Consider a money-tracking app/application*:I mentioned that I use Excel to track my personal business expenses. However, there are even easier options out there to track your activity and organize it into categories for your accountant. Many of my clients use Mint/Quickbooks or other similar apps to track their financial activity. You can link your business bank account/credit card to the app and use it to track every transaction, then print reports for your CPA to use for tax reporting.
5. Send any tax forms related to your business: Make sure you send any 1099s reporting business income to your CPA. This will allow him/her to make sure all the income that has been reported to the IRS has been accounted for and will make it easier to defend against potential audits.

Congratulations! You have a wonderful career at a professionally run independent studio, a prestigious university or a successful community school of the arts. You are on the road to financial success. Well… maybe not.

Finances, taxes and rates, oh my! For many teachers, the financial aspects of running a private studio can be daunting, but we are lucky to live in an age when so many essential, yet simple, tools are available with just the click of a button.

Pricing one’s work can feel frustrating at best, icky at worst. How can one possibly attach the intangible value of a musical performance or educational offering to a fixed dollar amount? And one might worry that, after tabulating up all the bundled value on offer, a fair price might be unreasonably high for most consumers. But assuming there is no such thing as a fair price for our work is tantamount to asserting there is no way to earn a fair living in the arts. Not so.

As music teachers we often need to think like business people. We also need to be firm and proactive about business decisions. Increases to your lesson fees are much better accepted if your business practices are consistently professional and organized. Each contributor below has provided excellent tips that will equip teachers with the necessary tools to tackle the often difficult task of collecting tuition and raising rates. I am most appreciative for their input and expertise.

Like the English language or our understanding of the solar system, the independent music studio is in a state of constant flux. Today's studio looks and operates much differently than the studio of fifty years ago. One area that has changed significantly is our system for collecting payments. While it is important to set our rates at an acceptable level, it is also important to use a system of payment in keeping with today's professional studio. Below is a summary of past practices as well as some of today's creative solutions to the challenges of getting paid the correct amount, on time, by everyone. By reviewing a number of approaches, we can determine what will work best in our present and future studios.

This MTNA-published Q & A-style booklet was compiled by a CPA to answer basic questions related to the business of music teaching.