Tax Season Tips For Music Therapists
It’s that time of year! We have less than 3 months now to file our TAXES! I recall the first year that I had to file after opening Harmony Garden Music Therapy Services. I had no clue what to prepare and felt a bit overwhelmed.
So, I have decided to discuss just this.
Here are your Tax Season Tips for Music Therapists:
1. Be Organized – This is important on so many levels when owning a private practice. As important tax documents start coming to you, find a safe place to file everything. This will include any W2′s, 10-99′s, student loan interest statements, bank account interest statements, etc.
2. Find a GOOD Tax Accountant – Don’t go to your local box store tax accountant. Find a good tax accountant. I can’t tell you how much mine has helped me. She praises me every year for my organization (see Tip #1) and is always able to help me claim items correctly.
3. Keep ALL of Your Receipts – I love office supply stores… They have these great accordion files with month names sectioned off inside of them. These are great for keeping copies of all receipts sorted. It’s also important that you photo copy or scan the receipts that are on flimsy carbon scratch paper, these fade within the year, so imagine what they will look like in 5…
4. Track Mileage – Mileage to clients homes/schools/facilities where you provide the music therapy service. Mileage to meetings. Mileage to the post office when sending mailers. Mileage to the office supply store to purchase whatever necessity for your business. Mileage to conferences/workshops. Every mile counts and these miles add up quick!
5. Don’t Forget About iTunes – It’s easy to forget about the DIGITAL receipts that are clogging our inbox’s. We are coming to a time where much of our music is sold in mP3 format, we can’t forget about these $0.99 purchases. They certainly add up. In addition, don’t forget about your app purchases for devices such as iPhones, iPods, iPads, etc that are used in sessions. We are all using them to some degree or will be soon. Don’t forget to claim these purchases.
6. Track Conference/Workshop Attendance – If you attend any conference for music therapy or continuing education, keep track. You can claim registration fees, hotel cost, travel costs, mileage, and meals (only a percentage of meals is allowed, because we HAVE to eat, at a conference or not…) Not to mention keep your receipt for the set of Sound Shapes you HAD to buy, or that awesome, new native american flute… THAT list goes on and on…
7. Understand Depreciation on Large Ticket Items – Music therapists have the potential to purchase some expensive equipment… I haven’t had too many huge purchases over the years, as I’m a good deal hunter… But occasionally I have had a new computer or something to claim. If you have a large ticket item, talk with your tax accountant to find out if it is in your best interest to claim it all in one year, or to spread it out.
8. Count Your Fees – Membership for AMTA. Membership for your regional or state music therapy associations. Insurance and Liability fees. Did you have a tax filing fee from the previous year? What about your CBMT Annual Fee or Continuing Education Course fees? If it’s your first year in business you may have the cost of starting your DBA (Doing Business As). Maybe you have gone further and are an LLC or an Inc? There are fee’s involved with these as well.
9. Remember All of Your Advertising – I had an ad in a phone book once. Remember those? Seriously though, what fees do you pay for website domains? Do you pay for online advertising through any blog sites? Google Adwords? Don’t forget about business cards and other promotional print items. I’ve done local expo’s where I was a vendor and all of those expenses are part of advertising.
10. Office Space – What is your office space? Is it a physical clinic with rent? Is it a room in your home? Is it your local Starbucks or Panera Bread? You can claim rent on any space you pay for to use. You can claim the square footage of your in home office space. You can claim receipts for food you had to purchase in order to use the wireless at a local coffee shop. Unfortunately, you can’t claim the use of your car any more than the mileage above… Even though we ALL use our car “office” more than we like to admit!
Hope you found these tips helpful! Happy Tax Filing!!
Comment below of you have any OTHER tips to share!