Let me first clearly state that I am not an accountant, nor do I have any formal training in accounting. This information is solely what I learned from visiting my accountant and I would advise you to consult with your accountant for more detailed information that is specific to your situation.
That being said, I want to share with you some tax deductions that can be reported for your business. Some of these are obvious, and some I had never even thought of:
- Musical instruments –>shakers, drums, bells
- Music therapy props –> books, scarves, parachute
- Music therapy equipment –> guitar strings, tuner, picks
- Supplies –> printer, ink, paper, staples
- Gas for driving to see clients –> (keep track of your mileage)
- Working from your home
- Entertainment –> business dinners
- Dues –> AMTA, CBMT, your regional association
- Conference fees –> national and regional conferences, training fees
- Marketing fees –> advertisements, website fees (hosting and domain name), letterhead paper, business cards
- Even your accountant fee!
I keep all my business receipts in an envelope marked “Music Therapy Business Receipts 2011.” Even if I am not sure if something can be deducted as a business expense, I still set aside the receipt, and my accountant helps me determine whether it is an appropriate deduction or not.
I also have a document that lists each one of my expenses (similarly to how I have it listed above) and bring this with me to my appointment. This way everything is clearly laid out and my accountant could help me decide which category to put each expense into.
April 15 will be here before we know it and so I hope this information was helpful. I wish I had known this when I first started private work, so I could have kept better track of my expenses. What do YOU think, have I left anything out?