I feel like I'm asking a question a day - oh wait! I am!

Today the topic is taxes!

When I decided to start teaching piano, I decided to get my piano tuned. It had been awhile due to a move. The piano tech discovered that my soundboard was cracked. That put me on a search for a new piano. I found a fabulous baby grand on craiglist which I purchased a few weeks ago.
I only teach piano for 4-6 hours a week from my home. And thepiano is for both personal and teaching use.

For tax purposes - what can I or should I declare?

The cost of the piano?
The cost of moving the piano?
The cost of regular tuning and maintenance?

Disclaimer: Please consult a true tax consultant. I am not one.

I purchased a new piano three years ago and consulted a CPA. He found that I could deduct all of the things you mentioned. First, he had me figure out the percentage of "business use" that the new piano was. (I selected 98% because I have another piano that I can use for personal use.) I claimed a one time deduction for the entire price, but you can spread it over 7 years if you choose. I also deduct all business expenses such as insurance for the piano, tuning, and interest I pay on the loan.

I'd second what Stanny says (not an accountant either though). Cost of moving can get wrapped into cost to purchase. Maintenance is usually claimed as a separate expense.

I'd recommend spreading out your deduction across 7 years ("depreciating" it) if you can, so that way you get the write-off each year.

I've worked as an accountant for the past 20 years, so I have some experience.

You can deduct all of the costs associated with acquiring, transporting and maintaining your piano.

The above advice is correct.

Recurring costs, such as tuning and other maintainence related costs, are classified as expenses (i.e. the entire amount can be deducted in the taxable year the expenditure occurs).

The cost (acquisition cost and transportation) to acquire the piano is capitalized and considered a depreciable asset (i.e. the entire amount must be deducted over the IRS-defined useful life of the asset).

The IRS provides no specific guidelines for the depreciable (useful) life of a piano, but I would advise a five to seven year period. The shorter the life, the faster the recovery (i.e. bigger yearly deduction, equals less taxes). The closest categorization of a piano is 'office furniture or equipment' (yes, I'm aware its not very close).

As for what percentage you claim for personal versus business use, that is up to you as to whether your conscience tells you to report an accurate estimate or not. "Practically" speaking, its impossible prove or disprove that percentage, so the IRS has no choice but to take your word as to what percentage is used for business. Personally, I would just use 100%. The IRS will not be able to disprove your claim in the unlikely event of an audit, but again, that choice is up to you.

Hope this helps.

I don't agree with only saying you use 98% or whatever of the piano for business. If I'm practicing a piece, it is usually for my own improvement or maintenance of my pianistic skills which are necessary for me to teach. How does one separate that from playing piano for teaching? Also, I accompany. But even if I'm only considering to write off the amount I play the piano to accompany, I still need to keep my "chops up" to be able to play these accompaniments with ease. So what part of my own maintenance is for "pleasure" and what part is for "business"? You really cannot separate, because I have pleasure in doing my business. Just because I enjoy it doesn't mean it's not necessary for my business to thrive. Just a pet peeve of mine that some CPAs try to convince you of (this happened to me my first year of teaching, and I didn't let my accountant get away with that - nor did I use her in subsequent years).

As far as how you write off the piano, that all depends on what your tax situation is. Since you are starting up, chances are you will have a lot of costs this year that you can write off right away, so you may want to depreciate the piano over 7 years (I think that's the rate for pianos). This way you will be able to deduct percentages of the cost of the piano over the 7 years rather than a huge chunk at once. But how much you do or if you write it all off at once is something your accountant can advise you on.

All of those things you listed can be written off, however. The maintenance would be written off completely in the year it was done.

I couldn't really honestly say 100%. Last Christmas I had a party, and hired someone to play the piano for entertainment purposes. And at times, my adult children come home and play.

So? You think every business person *never* uses something bought for business purposes for personal use too? These are the loopholes built into the tax code that make owning a business worthwhile. Of course, you do what you what and what you're comfortable with. But really, there's a point at which it becomes ridiculous to try and figure out true percentage of business use.

Agreed Morodiene.

I would wager that more than one teacher here, is claiming full relief for a computer, that is also being used to post on PW

There are many, many deductions which people commonly overlook.

Some are more obvious, such as: Purchasing CDs for your business' reference library. The CD rack as well (assuming you still buy CDs). Purchasing music books for your research/knowledge update.

Some you have to think outside the box, such as pro-rating your internet service between personal and business. It's always best/safest if you have separate services, but often, especially for a micro-business, that's just not feasible.

Cell phone service, especially for teachers who travel to students' homes. I need cell service because competitions, adjudications, etc., are not held at the studio but off-site. Of course, this means you need a land-line or another cell phone for personal use, or if you have free minutes your employer may give you permission to use the phone for limited personal use on a non-interfering basis.

You have a mandatory home-owners association fee; this can be prorated between personal and business use (use the square footage for each as the basis). In Washington State, the government has mandated all new developments have water catchments, certain drainage features, public green belts, street lighting, etc. This means they've shoved formerly state/county responsibilities onto these associations; you should treat these fees as the taxes they are.

Just a few ideas.

And you can make a strong case that PW is a learning/job improving activity. Activities in and associated with professional associations and groups are fully deductible if they relate to your primary business.

John,
My tongue was firmly planted in my cheek, in that post

But I imagine, home business computers are also used for personal emails, Facebook etc, just as are commercial workplace computers.

That was my impression, but it served as a useful springboard for reminding American teachers of possible additional deductions.

Yes, there can be many possible deductions that can be overlooked, such as studio furniture, wear and tear, providing waiting and restroom facilities, cleaning, etc. etc.

Back to the OP, I think you should claim the full allowance for all your piano costs, regardless of how many hours per week you use it for teaching.
It is after all, primarily used and purchased for teaching.

deduct the whole thing. people check email on office computers, use office pencils to make a grocery list at your desk. the point of declaring personal vs. business use is to ward off obvious things like a set of golf clubs for a lawyer because he "occasionally does business on the golf green"