8/29/2005
Advice from Nashville's leading Financial Aid Advisor Dave Ramsey
Dave Says
By Dave Ramsey
Author of:
Financial Peace and
The Total Money Makeover
"Is teaching piano considered a
business?"
Dear Dave,
Would teaching six to 10 piano lessons a week be considered a business? If so, how would I go about paying taxes?
Jennifer in Toledo, OH
Dear Jennifer,
If you’re getting paid for it, then yes, it is considered a business. If you’re earning more than $650 per quarter you are required to pay a quarterly estimate on your business, or an estimated tax. It would probably be a good idea to set aside one-fourth of what you’re earning for taxes.
I probably would open a small checking account listed with the business’s name and your Social Security number. I would deposit all my income from that business into the account, and any expenses I have would come out of it. What’s left over is called profit, and that’s taxable.
Good question, Jennifer!
- Dave
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