Last day of 2012, this year, I am doing a ratio here:
For every $100 that I receive from parents, I only pocket $65 because $35 goes to tax and business expenses such as...

Dues
Piano books
Rent
Communication (cell phone)
Education
Office supplies
Postage
Health Insurance
Advertisement
Printing
Quarterly Tax
etc.....

I like to know if this is a healthy ratio? How about other piano teachers? What is your ratio?

I don't know if it's a healthy ratio or not.

My ratio would be higher than that, however. There are many things you listed that I don't pay for out of tuition (the money from parents/students): piano books, cell phone, education, postage, advertisement, printing.

That leaves my main expenses as rent and health insurance. My health insurance is fairly inexpensive thanks to my age, health, and the fact it's not really a very good plan.

That seems about right. It's definitely hard to make a living with that, however. But I'm not really sure what you can do about it. Actually, the more students you have, the better the ratio, of course, because most of those expenses don't increase with an increased number of students (you'll pay the same rent, so more students means more money you get to "keep").

musicpassion: Where are you getting the money to pay for your cell phone, education, postage, advertising and printing if not from tuition?

Are you taking all the deductions you can, for tax purposes?

Postage: I hardly mail anything. I mail a few things on behalf on our association, but those expenses are reimbursed. Correspondance to my students/families I hand out in lessons.

Advertising and Printing: these expenses are paid by recital fees/donations. Some of our recitals have a set fee, some are a donation basis. These funds pay for program printing, etc.

Cell phone: that's a personal expense. My tax expert told me I can't claim my cell phone as a business expense as I also use it for personal use. Maybe she's wrong, but I'm sticking with her advice.

Education - I assume you mean continuing education for us the teachers? I've finished my university degree some years ago and am not currently working on another. So I don't have those major expenses right now. I am certainly active in continuing my learning, but that doesn't have to cost much. Our association has free workshops, masterclasses and events designed for continuing education. And occasionaly I've taken lessons with an expert in a particular area. So I guess whatever it costs does come out of my tuition fees.

I don't think you're too far off the mark. Many of these expenses are fixed, so they do not vary with the number of students you have. An example might be rent, or heating, so increasing your teaching load has the effect of cutting the ratio, where as if you lose students, the ratio will increase.