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Original message:180 days 10 hours 3 minutes ago

Member: johnmarkh

162
WebCred

So all I do is give guitar lessons to 11 people, and I volunteer at a center for the poor to which i get an occasional stipend.

I am not another person's dependent and I live with a room mate.

The thing is...I'm completely under the american poverty line. I make about 700 a month where the line is $9,393 a year (2003)

I am not under an employer, as i just give guitar lessons at my parents' house. but, i travel there once a week (about 25 bucks to travel there and back via train)

how do i do all this?

My music recommendations:

Reply:180 days 9 hours 39 minutes ago
Member: Xarkzila

2178
WebCred

Income is income. You should be claiming it all, but... You are going to be surprised at what you are GOING to HAVE to PAY!

If your travel is for business, it's a write off. As long as you have all the receipts. If not, you may have a difficult time should you be audited.

Here's what I do... 40% of my gross is banked and not touched. This would be my maximum tax should I not have any write offs. You will have to pay about 15% of the total gross for social security, since you don't have an employer, (federal law requires them to pay half of your social security.) You may also be subject to state and local taxes. These are not avoidable. Cash payments can help if you're looking to "cheat." If cash is kept as cash, and not deposited into any bank account, it's almost impossible to track, making it almost impossible to tax. Let me stress ALMOST... Nothing is foolproof. Once you deposit cash in a bank account, it can now be tracked. You WILL have to pay taxes on it.

You make more than the minimum amount for tax purposes, even though you don't make enough to even reach the poverty level.

Be aware also, that being your own employer as such, means that to file, you can't use a short form, which would be easy. More forms are required for write offs. I own a studio, so when I buy a guitar, it's a write off, as long as it's in the studio available for general use. For you, guitar strings would be a write off. Repairs to your guitar would be a write off. Lesson books would also be a write off. Travel to and from your clients is a write off. There may be more.

Check out TurboTax on the web. They'll let you work it all out for free and only charge when you file. This could give you some insight on how it's all done. Be aware that you may end up having to use a service to be certain the first time. An accountant is even better, but only if you've saved every single receipt having to do with your business.

Good luck!

My gear recommendations:

"The music industry is a cruel and shallow money trench. A long plastic hallway where theives and pimps run free and good men die like dogs. There's also a negative side..."
http://www.cleargravy.com

Reply:180 days 7 hours 49 minutes ago
Member: bachmirage

654
WebCred

as was said,you can write off strings,guitars,travel expenses,cell phone bills,ink for you computer if you print out tabs for students,and just about anything you can think of that is related to you job. try to find as many things as possible. also remember to take EARNED INCOME CREDIT...there's a table online that will tell you how much your credit is. all the forms you need can be obtained at just about any library in your area. i believe you need the 1040 A form. with that form you will see places on it for your write-offs. you need to start keeping all your reciepts. a local accountant can also do your taxes as well. they will charge you around $40 or $50. that's what my guy charges me...

My gear recommendations:

Reply:179 days 13 hours 37 minutes ago
Member: johnmarkh

162
WebCred

hmm...i'm thinking...what sort of receipt do i get after buying my amtrak tickets online...

should i be keeping the stubs from the tickets?

My music recommendations:

Reply:179 days 12 hours 3 minutes ago
Member: bachmirage

654
WebCred

yes.see if they will give you an actual receipt.

My gear recommendations:

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