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#20142 - 05/08/05 11:52 PM charging for books and sheet music
Carolyne Offline
New Member

Registered: 03/08/05
Posts: 1
Loc: Houston
I have a monthly fee for lessons, but sometimes find that I am short changed when it comes to people paying for books and sheet music. Any suggestions? Parents write a check for the lessons and forget to add the books.Thanks for any help you can offer. Carolyne

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#20143 - 05/09/05 03:08 AM Re: charging for books and sheet music
GeeTee Offline
Resident Member

Registered: 12/26/01
Posts: 391
Loc: Midwest
Carolyne, I usually order new materials for my students, and when they come in, I write out a sales invoice (w carbon copy) and staple it right onto the front cover of the book or sheet. Seeing this slip serves to remind the student to give it to mom or dad. If payment doesn't come by the next lesson, I write (and hi-light) a reminder on the student's assignment sheet along with a reminder of the late fee that will be charged if payment is not made by next lesson. If this does happen to be the case next week, I write out a new invoice including the late fee, and then I send this directly to the parents via the mail.

I've only got one family that tends to be a little slow about payments, but it's prob. due to the fact that the student has ADHD and rarely opens his binder to the week's assignment page (to see the written reminder). The mom seems a bit scattered as well, but after a few late fee charges, things got better.

For a situation where payment is always an issue, I would consider:

1. Arrange with the parents that they will themselves either have to order the music (and if they fail to do so and the student is without his new materials, then the lesson may be forfeited). OR

2. Order the music well in advance, and notify the parent of the charge ahead of time and let them know that the materials will not be given to the student until payment is made. Then, if the next lesson depends on these new materials, and payment is not made, the lesson may again be forfeited.

A few times when the child goes home and tells mom that he didn't have a lesson cause the new books weren't either brought or paid for, the parent may get with the program.

I know this may sound harsh, but with some folks, you just have to be tough.

Good luck

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#20144 - 05/09/05 03:23 AM Re: charging for books and sheet music
PFVTeach Offline
Resident Member

Registered: 09/17/04
Posts: 481
Loc: USA
I just let the parents know the week that the student gets materials that they have new books or sheets this week and the total is on their receipt which I attached to the materials the student has.
Parents I have know that they can either pay me that week or within 7 days of the materials being given to them- which means at the next lesson or by mail before if they forget a check book or don't have the cash on them. Most of mine are pretty good though about paying up on time for books/materials.

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#20145 - 05/09/05 04:21 AM Re: charging for books and sheet music
ABA Offline
Regular Member

Registered: 02/21/05
Posts: 50
Loc: Nashville
"I have a monthly fee for lessons, but sometimes find that I am short changed when it comes to people paying for books and sheet music. Any suggestions? Parents write a check for the lessons and forget to add the books.Thanks for any help you can offer. Carolyne "

This may not help you on existing students, but I know some teachers who "roll" the cost of materials into the same fee for lessons. You have to calculate this very carefully and also make sure it doesn't make the overall lesson charge too much. Usually thier approach is that the the total cost also includes materials. It is a simple solution that if priced right, you end up not ever being short changed or having to exlain and/or bill for the addtional cost and eliminates tedious dealings with the parent over such issues.
Bear in mind it is a realistic estimate, based on materials you have supplied the students with in the past.

I know some teachers who do this by simply adding an extra $1 - $10 to the teaching cost per lesson. So in your case it would be more for a monthly fee. And this seems to generally solve the problem.

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#20146 - 05/09/05 04:45 AM Re: charging for books and sheet music
Gail Offline
Resident Member

Registered: 09/04/04
Posts: 369
Loc: Alpharetta, GA
Some teachers also charge a "materials fee" at the beginning of the year (say, $25 or so) to cover books and materials through at least the first half of the year. Any extra is credited toward the second half of the year and overage is billed with the next month's tuition. If you could come up with an average, you could charge that for your materials fee. For me, beginners' materials are usually more because they go through more books; then by the third year or so, they are only getting through 1 set of books in a year. Depends on how much they practice and can "pass off" in a lesson.

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#20147 - 05/09/05 05:34 AM Re: charging for books and sheet music
beth ann Offline
Resident Member

Registered: 04/06/05
Posts: 105
Loc: midwest
I may be making too much work for myself, but I print a monthly statement for each student. They receive it at the last lesson of the month. Usually it just has the monthly charge on it, but if I need to add materials, I can just put it on there and add it to the total. I also leave a nice big space to tell them about upcoming group lessons, events, or what books they are receiving and why. So far, it works pretty well, especially because many parents forget how quickly a month goes by.

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#20148 - 05/09/05 06:40 AM Re: charging for books and sheet music
Whitney Offline
Resident Member

Registered: 11/21/04
Posts: 139
Loc: California
I know it might sound crazy but I do all my billing by mail. I didn't want to do it at first because I'm so frugal and I couldn't stand the thought of paying so much for stamps, but I will never go back. I add books, recital fees, late fees, etc. on the invoice and mail it on the 20th of each month along with any special announcements. Payments are due on the 5th of each month (they pay about one month ahead). I also make a note on my policy and on the invoice that any questions regarding payments can be addressed to my husband. Works like a dream! He's only had to address one question this whole year.

Usually there are no discussions about money at the studio and this frees me up to just focus on teaching. I always used to hate asking kids to remind their parents about the check. It made me SO uncomfortable.

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#20149 - 05/09/05 06:59 AM Re: charging for books and sheet music
alidoremi Offline
Star Member

Registered: 03/11/02
Posts: 2120
Loc: California
I charge a $50-$60 materials fee per year. It's due the end of May for the coming school year. It's non-refundable and also acts as a deposit for the student's Fall time slot. During the summer I spend a lot of time deciding repertoire and goals for the each student for the coming year. I make a list of all the books and supplies I'll need and purchase most of them before lessons even start up in Fall. I go to my state Convention and get great deals on books there (some publishers at 40-50% off). The materials fee also covers any awards/trophies I might hand out, composer statuettes, stickers, pencils, and other incidentals given to the student during the year.

I will NEVER go back to billing parents as materials are bought. I don't like being out the $$ and then trying to collect. And parents don't mind paying out a once yearly fee; they know they won't be charged anything other than monthly tuition.

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#20150 - 05/09/05 07:03 AM Re: charging for books and sheet music
Lilla Offline
Star Member

Registered: 10/30/00
Posts: 1573
Loc: Chicago
This falls under the "Best Things I Ever Did" category - but it is not new to plenty of teachers here. Last fall I also started collecting an annual materials fee of $50. I averaged out what is spent on each student over the year, plus gifts and novelties for group classes, plus recital expenses to come up with the $number. Not one parent complained. I gave them 30 days to pay. The notice goes out 9/15 - and they have from Oct. 1 to Oct. 31 to pay up. I sent out only one reminder notice last year. It has taken away an enormous headache, including almost a year where I was just lazy and didn't keep good enough records to charge for all the materials I handed out. I think the parents also like not having to worry about owing extra for books. The only expense that isn't included is Festival fees, and that's so they hopefully take that challenge more seriously.

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#20151 - 05/09/05 07:36 AM Re: charging for books and sheet music
Arlene Steffen Offline
Star Member

Registered: 06/20/00
Posts: 2972
Loc: Fresno, CA USA
I averaged the cost of materials at about $40/student/year and just rolled it into the tuition. I pay for all books except assignment books and theory books. Then, if I use something that ends up not working too well, I don't feel bad about taking it back and trying something else.

This also allows me to have a large lending library with money available to replace lost/worn things.

For theory and assignment books, I call the music store and have them hold the materials under my student's name. That way, there is no confusion about what they are supposed to buy. You do have to give about 2 weeks lead time, though, so that they have time to get it (or if they forget to get it!).

It has saved me a ton of bookkeeping and I can deduct the cost of the books on my taxes as the students don't actually own the materials. If they use a book that they really love and want to keep, they go buy it themselves. The parents love that their piano bench doesn't end up full of method materials that the kids have outgrown.

It's my way of recycling!

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#20152 - 05/09/05 08:28 AM Re: charging for books and sheet music
xstitch4me Offline
Star Member

Registered: 08/15/04
Posts: 2167
Loc: Idaho
[QUOTE]Originally posted by Whitney:
[QB] I also make a note on my policy and on the invoice that any questions regarding payments can be addressed to my husband. Works like a dream! He's only had to address one question this whole year.
QUOTE]

Why would you make your hubby deal with that? Don't you feel that makes you sound a little weak? It's your business isn't it? Or do you run this business together - ie does he teach too? I think part of running your own business especially teaching is taking care of everything between you and the parents yourself.

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#20153 - 05/09/05 10:43 AM Re: charging for books and sheet music
Whitney Offline
Resident Member

Registered: 11/21/04
Posts: 139
Loc: California
Before I was married I actually had a billing agent take care of billing. Some people use MuBus....this is a similar idea. Now my husband just took on the role of billing agent.

The policy doesn't say "My husband takes care of billing"....it just says that all questions regarding billing will be addressed by ________. I'm sure they've all figured out it's my husband...we have the same last name now.

It was his choice to take care of it and frankly, yes, I do tend to be weak. I see what you mean but honestly it works so much better for me. I hated when people would ask me for exceptions. Ever since I started using a billing agent all (most, at least) requests for exceptions ceased immediately. I do all the explaining of the policy myself and take care of most everything with parents myself. However, if someone gets a bill they disagree with they have to call the billing agent to fight it. (they never do though) This saves me from having them ask if they really do have to pay for their missed lesson right in front of their kids. It keeps the money and the teaching separate.

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#20154 - 05/10/05 02:03 AM Re: charging for books and sheet music
Susan Offline
Star Member

Registered: 01/03/01
Posts: 2168
Loc: Texas
I am surprised that so few teachers on this board charge a book fee up front. Like Alidoremi, the deposit hold the spot for fall lessons. I take all fees and books out of this deposit, and there are a lot of fees because my students participate in a lot of music association activites. I write down the books as I give them to a student, and then later enter it in Quicken, which keeps a running invoice for me. When the book fee gets low, I print out the invoice and the parent sends me more money.
Actually, this is done by almost every teacher in the association here. When I switched over, the parents liked it, because their monthly tuition stays the same. I have never had any complaints. I love it because I can go years back and see what I gave a student. Also, I like it because I am not having to bill each month.

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#20155 - 05/10/05 06:04 AM Re: charging for books and sheet music
pianoannie Offline
Mainstay Member

Registered: 07/20/01
Posts: 946
Loc: midwest USA
 Quote:
Originally posted by Susan:
I am surprised that so few teachers on this board charge a book fee up front. Like Alidoremi, the deposit hold the spot for fall lessons. I take all fees and books out of this deposit,
Count me among the teachers who do charge a book fee up front. Like you, the fee is dual-purpose in that it serves as a deposit to hold a spot for the next semester. I love the simplicity!

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#20156 - 05/10/05 07:15 AM Re: charging for books and sheet music
Whitney Offline
Resident Member

Registered: 11/21/04
Posts: 139
Loc: California
I'm seriously considering it. I am one of the ones who still doesn't and it's not because I don't think it's a marvelous idea. My biggest problem is that I've been teaching in the same area since I was 12.....yes, 6th grade. I am now 27 but it has been hard for me to raise rates and go to strict policies when I've been here for so long.

I think the book/fee deposit sounds like a really good idea and some of my students might like it. Others, however, might be upset about the new tuition increase and requirement of summer lessons. I'm kind of afraid to throw too many new things at them at one time.

If I ever move out of the area I can't wait to employ all the new ideas I've learned here with a fresh start.

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#20157 - 05/10/05 05:04 PM Re: charging for books and sheet music
pianoannie Offline
Mainstay Member

Registered: 07/20/01
Posts: 946
Loc: midwest USA
Whitney, I do know how you feel, worrying about "throwing too many new things at them at one time." But I really believe that it will be better to decide ALL the changes you'd like to make, and just do it! Otherwise, you'll be changing one or two little things every year, and that could cause parents to wonder "Gee, why are things different every year?"

When I "took the plunge," I sent home a letter that started out something like this:

"Dear parents,
Due to family responsibilities and various other constraints on my time, I need to make several changes in my piano teaching policies, ...."

Then I went on to describe my new no-makeup policy, my fees to be paid each semester (rather than monthly), a larger number of weeks off during the summer, and maybe some other things too. Oh yeah, there was a fee increase in there too, although I didn't come right out and say it was an increase. I simply stated that the fee would be $xxx per semester.

The ONLY comment I got from any parents was one mom, who said "You scared me with the beginning of that letter. I thought you were going to say that you were giving up piano teaching!"

So Whitney, if you feel that your families are fairly committed to you, and there is mutual respect, maybe it is time to make some changes. Things like rolling the book costs into the tuition really do simplify things not only for you, but also for the parents. Same with equal monthly payments or semester payments. Parents want life to be simple whenever possible!

What other changes would you like to make?

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#20158 - 05/10/05 05:16 PM Re: charging for books and sheet music
Whitney Offline
Resident Member

Registered: 11/21/04
Posts: 139
Loc: California
Well, I've already raised tuition a little (effective this coming September) and I am requiring a minimum of 5 summer lessons in order to hold spots. I've never required summer lessons before so I have a few people who don't like this idea. (hopefully they'll quit....I'm actually hoping to reduce my student load by about 20 students)

I am considering having students pay a book deposit at the beginning of the year but I am worried about a few families who I know don't have an extra $25-40 at any time. They would probably prefer to just pay $5.95 more at a time, as books are purchased. I have been flexible with some people and allowed them to pay me back for books over a few months. It's kind of ironic that some of my best students come from families without a lot of money. These kids go through books and levels so quickly and I know that it can be a hardship for parents.

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#20159 - 05/11/05 02:46 AM Re: charging for books and sheet music
Susan Offline
Star Member

Registered: 01/03/01
Posts: 2168
Loc: Texas
Whitney, I understand how you feel about the few families that you feel don't have the extra money for a book deposit. But ask yourself; better yet, ask the children themselves. Have any of these parents ever had children in soccer, martial arts, dance, or other sports? Do you know that at recital time in dance, parents are usually asked to pay a steep recital fee and to pay for 2 or 3 costumes at $50.00 each that are worn for 3 minutes? I saw single mothers in low paying jobs fork over the money for those costumes, a sacrifice they were lovingly willing to do. There are also lots of expensive up-front charges for sports.
Do what you have to for the parents who are really poor. You could still charge a book deposit for them, but a smaller one more often. I found that even my struggling parents like the idea of a book deposit because the tuition remains the same each month and they don't have any surprises. You can't let the stuggling parents rule your studio.
It was hard for me when I changed over to a professional studio. It turned out to be a lot easier than I thought. After a few years, no one could remember the old way I used to do things.

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#20160 - 05/11/05 07:43 AM Re: charging for books and sheet music
Lilla Offline
Star Member

Registered: 10/30/00
Posts: 1573
Loc: Chicago
Everytime I send out a notice of tuition increase I include a sentence something like this in small print . . ."If this tutition increase creates a financial difficulty for you please contact me to discuss." No one has ever approached me but if they did, I would weigh all considerations and handle it on an individual basis.

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#20161 - 05/11/05 09:34 AM Re: charging for books and sheet music
pianoannie Offline
Mainstay Member

Registered: 07/20/01
Posts: 946
Loc: midwest USA
Whitney, perhaps you could give all parents this choice: pay a book deposit at the beginning of each semester, or be responsible for obtaining all books on their own.

I used to charge for every single book, sheet, etc, including a portion of the shipping costs and sales tax. But I've read several places that we aren't allowed to charge families sales tax unless we have a tax license (or something like that). Plus, tax returns really do get complicated when you have sales of items and not just tuition.

Some teachers have their students obtain all of their materials for these very reasons. And I know, there's the concern that parents won't buy the right things, or won't buy them in a timely manner. But to me a bigger concern is that purchasing materials for students and selling them to the students could create problems at an audit for not reporting sales, inventory, tax, etc correctly. No thanks--I'll avoid that at all cost.

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#20162 - 05/11/05 10:19 AM Re: charging for books and sheet music
Whitney Offline
Resident Member

Registered: 11/21/04
Posts: 139
Loc: California
Hmmm, I didn't realize that was a tax issue. I always have the students pay me back for the price I bought the book...I just consider it reimbursement. I don't bother having them reimburse me for sales tax because it's too complicated and I'd rather just eat that cost myself.

So if I'm charging monthly tuition on an invoice and than I add things to the invoice like books, fees, etc.....amd I doing it the wrong way?

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#20163 - 05/11/05 02:06 PM Re: charging for books and sheet music
pianoannie Offline
Mainstay Member

Registered: 07/20/01
Posts: 946
Loc: midwest USA
 Quote:
Originally posted by Whitney:

So if I'm charging monthly tuition on an invoice and than I add things to the invoice like books, fees, etc.....amd I doing it the wrong way?
Well, I don't know how you're listing everything on your Schedule C, but I'm pretty sure I used to do it wrong! Different people have told me different things, like the thing about having a tax license, and something about a seller's license, and it all scared me into just changing my system.

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#20164 - 05/11/05 04:35 PM Re: charging for books and sheet music
Elbe Offline
Resident Member

Registered: 07/16/03
Posts: 323
Loc: The Great Northwest
I give the parents a registration packet which includes the first set of books. The cost of these is included in the registraion fee. From then on I ask that they buy their books. It not only relieves me from the headache of trying to figure out retail taxes, It provides the family a chance to see what their friendly neighborhood music store has to offer. Some parents have been a little late in getting their books but not many.

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#20165 - 05/11/05 05:33 PM Re: charging for books and sheet music
ABA Offline
Regular Member

Registered: 02/21/05
Posts: 50
Loc: Nashville
So if I'm charging monthly tuition on an invoice and than I add things to the invoice like books, fees, etc.....am I doing it the wrong way?

Teaching lessons per se is a service, and in most states is not generally taxable. If you sell materials, then your state wants you to collect sales tax, which has nothing to do with federal 1040 income tax...other than, you can deduct out the portion of "sales tax" you collect and pay to the state.

If you have the parents/student buy all their materials themselves, then you bypass the need to collect sales tax. Again it depends on the state in which you teach. The state may still require you to have a business license whether you collect sales tax or not. And you will need to fill out the annual, quarterly, and/or monthly paper work (from the state) to stay clear of problems. If all you are doing is teaching, you are providing a service, like a doctor or a lawyer, and sales tax is almost never applicable to a service type business.

States in recent years have gotten more aggressive about collecting sales tax, and they may try to push through a "service" tax in your legislature. Most attorneys oppose this and will always lobby against taxing a service like teaching.

Again if you sell addtional materials, they will want the sales tax you collect on that. In the case of teaching, this will amount to a very small number, since 90% or better of your business is realated to pure teaching, and not selling goods or products ( like a grocer).

I do know in that some teachers sell a lot of addtional music that amounts to a more substantial part of their overall income. So it behooves you to pay your sales tax on all sales period.

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#20166 - 05/11/05 06:55 PM Re: charging for books and sheet music
Whitney Offline
Resident Member

Registered: 11/21/04
Posts: 139
Loc: California
So if I buy a book and pay sales tax on it (when I buy it at the music store) I am supposed to have the student pay sales tax on it again when I sell it to them....and then save all that sales tax and pay it to the government? If that's the case it doesn't seem fair that I'm not getting reimbursed for the sales tax. This is so confusing. I've had a professional accountant do my taxes two years in a row and she never mentioned a thing about this.

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#20167 - 05/11/05 07:05 PM Re: charging for books and sheet music
Lisa Kalmar Offline
Star Member

Registered: 04/10/00
Posts: 4277
Loc: KC
That is totally incorrect. KCMTA had a CPA give an entire meeting a few months ago and she addressed this. If you want, I can look up the notes and quote you the verbiage verbatim tomorrow, but it's getting too late tonight.

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#20168 - 05/11/05 08:27 PM Re: charging for books and sheet music
Whitney Offline
Resident Member

Registered: 11/21/04
Posts: 139
Loc: California
I would love it if you could share your knowledge....thanks!

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#20169 - 05/12/05 02:07 AM Re: charging for books and sheet music
ChristyA Offline
Resident Member

Registered: 05/24/02
Posts: 270
Loc: Midwest
My accountant has told me that as long as they are reimbursing me and I'm not making any profit, it's just a wash and don't even bother reporting it. Sure don't miss keeping track of those receipts.

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#20170 - 05/12/05 02:39 AM Re: charging for books and sheet music
Susan Offline
Star Member

Registered: 01/03/01
Posts: 2168
Loc: Texas
Some teachers may have sales tax/inventory and income tax mixed up.
Christy, my accountant told me the same thing about not reporting anything if it is a wash.
Now I'm no accountant, but I did once have a small craft business where I did report sales tax to the state. The sales tax had nothing to do with income tax. I had a tax number and when I bought things for the business I bought it tax free. When I sold it, I collected sales tax. At the end of the year I paid that sales tax to the state. There was no inventory records to keep. It was very simple. I don't think this would apply to piano teachers unless you get a tax number and go into business as a music retailer and buy your music wholesale from FJH!

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#20171 - 05/12/05 03:12 AM Re: charging for books and sheet music
ABA Offline
Regular Member

Registered: 02/21/05
Posts: 50
Loc: Nashville
So if I buy a book and pay sales tax on it (when I buy it at the music store) I am supposed to have the student pay sales tax on it again when I sell it to them.

Whitney.....no! This applies to perhaps some teachers who buy in bulk and use a sales tax exemption certificate to avoid paying sales tax on the front end. I would generally not worry about the sales tax issue. I would say that it does not effect the vast majority of teachers. And again, sales tax is only a state tax that has nothing to do with personal, federal income tax.

To make things less confusing for you. Don't worry about it! My question is why are you paying the sales tax for the students?

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#20172 - 05/12/05 03:21 AM Re: charging for books and sheet music
ABA Offline
Regular Member

Registered: 02/21/05
Posts: 50
Loc: Nashville
Whitney......Susan is correct. Music dealers and retailers do have to collect sales tax. I know just a few teachers who sell a boatload of materials and they do have a state tax number and exemtion certificate.

In your case....relax. This is not a biggie. I was just giving you the inane laws that states sometimes try to enforce when the coffers get low. Did you know that your state most likely has laws requiring you to collect sales tax when you have yard/garage sales? Now who in thier right mind is going to do that! The answer is no one. Nevertheless, its still a law on the books.

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#20173 - 05/12/05 03:22 AM Re: charging for books and sheet music
ABA Offline
Regular Member

Registered: 02/21/05
Posts: 50
Loc: Nashville
oops!.....sorry, I meant Christy.

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#20174 - 05/12/05 03:29 AM Re: charging for books and sheet music
ABA Offline
Regular Member

Registered: 02/21/05
Posts: 50
Loc: Nashville
That is totally incorrect. KCMTA had a CPA give an entire meeting a few months ago and she addressed this


Lisa.......the CPA I used to work for would say the opposite. Accountants are like lawyers, you can get different opinions depending on who you consult with. But generally, I would agree with you that the vast majority of teachers should not worry about paying sales tax to the state. Like lawyers, I don't always agree with every accountant. I'm sure the CPA you heard is on target!

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#20175 - 05/12/05 04:25 AM Re: charging for books and sheet music
xstitch4me Offline
Star Member

Registered: 08/15/04
Posts: 2167
Loc: Idaho
I just have them reimburse me for the cost of the music and the tax I paid. I have never included that on taxes. If I've already paid the sale tax, why should it be paid again?? Maybe we're making this too complicated.

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#20176 - 05/12/05 06:23 AM Re: charging for books and sheet music
ABA Offline
Regular Member

Registered: 02/21/05
Posts: 50
Loc: Nashville
I just have them reimburse me for the cost of the music and the tax I paid. I have never included that on taxes. If I've already paid the sale tax, why should it be paid again?? Maybe we're making this too complicated.

xstitch...this is a good approach; I hesitate to use the term a "wash", but this expense is your case would be what some accountants call "flow through", and is in essence a "wash". If you are reimbursed in full; then you are not selling or retailing with some kind of net profit.

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#20177 - 05/12/05 07:19 AM Re: charging for books and sheet music
Whitney Offline
Resident Member

Registered: 11/21/04
Posts: 139
Loc: California
xstitch4me, do you have them write separate checks for book reimbursement so that it doesn't look like your income is bigger than it is?

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#20178 - 05/12/05 08:11 AM Re: charging for books and sheet music
Lilla Offline
Star Member

Registered: 10/30/00
Posts: 1573
Loc: Chicago
As stated above - the actual requirements and methods vary state by state - but in the end . . .

The state must receive their sales tax. If you are claiming tax exemption at the time of purchase, you are to collect sales tax and send it in to the state. (Quarterly, here in Illinois). BTW, you send it in whether or not you collect it from your students. Your loss. That is, IF you are claiming sales tax exemption at the time of purchase.

If you are paying sales tax, ultimately the state is receiving what they want, but some advisers might suggest you're doing it wrong. Piano teachers are not so closely regulated as a rule. Follow your accountants' advice as it mostly depends on how you're filing.

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#20179 - 05/12/05 08:12 AM Re: charging for books and sheet music
Susan Offline
Star Member

Registered: 01/03/01
Posts: 2168
Loc: Texas
Whitney, I do not have the students write separate checks, although I used to. Instead, I record everything very carefully and indicate in Quicken which money goes toward tuition and which goes to the book deposit. I want it to be clear in case I'm ever audited. The main thing is that you have good records and can document it.
ABA, the collection of sales tax is different in each state. Here you don't have to collect on garage sales unless you have them all time and it is a business. Also, if it is just a small hobby for which you maybe do once a year, like a craft show.

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#20180 - 05/12/05 08:13 AM Re: charging for books and sheet music
Lilla Offline
Star Member

Registered: 10/30/00
Posts: 1573
Loc: Chicago
Your income wouldn't look like it's bigger than it is, because you would be deducting the cost of materials, etc. So, in effect, they pay you for a book, you deduct the cost of the book, and if you're wise, you come out with a profit on the book.

 Quote:
Originally posted by Whitney:
xstitch4me, do you have them write separate checks for book reimbursement so that it doesn't look like your income is bigger than it is?

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#20181 - 05/12/05 02:30 PM Re: charging for books and sheet music
Whitney Offline
Resident Member

Registered: 11/21/04
Posts: 139
Loc: California
Right....that's how I do it, Lilla. I just said that because I thought xstitch4me said she doesn't include them in her taxes.

Sorry to everyone for so many question...didn't mean to make this a big confusing mess.

Thanks for all your help. I appreciate you!

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#20182 - 05/12/05 03:15 PM Re: charging for books and sheet music
ABA Offline
Regular Member

Registered: 02/21/05
Posts: 50
Loc: Nashville
Lilla
Member
Member # 127
posted 05-12-2005 08:11 AM                      
As stated above - the actual requirements and methods vary state by state - but in the end . . .
The state must receive their sales tax. If you are claiming tax exemption at the time of purchase, you are to collect sales tax and send it in to the state. (Quarterly, here in
Illinois). BTW, you send it in whether or not you collect it from your students.

Thank you Lilla.....that's all I was saying
orginally!
,

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#20183 - 05/13/05 07:48 PM Re: charging for books and sheet music
Christine/Pelirroja Offline
Resident Member

Registered: 08/23/03
Posts: 245
Loc: CA, USA
Whitney, we don't have sales tax in Oregon, so I didn't pay that close attention to the thread PianoAnnie was referring to (at least the one I think she's referring to) and I would check with your state. But, if I remember right, in that discussion if YOU are paying the sales tax, but only getting reimbursed for the actual cost of the book (not the sales tax) you don't need to pay/do anything extra (though some argued you needed a retailer's license, which would allow you to NOT pay sales tax on the original purchase, but then charge parents sales tax and send that to your state.).

If you are getting a discount for being a teacher when you purchase music at the store, then turning around and "selling" the book at full price, then you are supposed to have a seller's license and charge sales tax on the difference.(Since the state never collected the tax from that portion of the cost of the book).

(Again, that was just by memory so it may be inaccurate)

Now, if you have a "registration fee" that parents pay (which gives you money to purchase books) and then you pay for all the books, then the books become unreimbursed supplies for your business and you get around the whole issue--as I think Pianoannie was saying.

So far, I still charge per item and I pay income tax on the 10-40% discount, but don't have a "reseller's" license or whatever it's called. It sure makes my head swim, and if I hadn't already made several changes-with follow-up change letters, I would probably make the switch.. Ugh.

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#20184 - 06/06/05 11:17 AM Re: charging for books and sheet music
clarinetlady Offline
Resident Member

Registered: 09/30/04
Posts: 177
Loc: Toronto,ON
I currently charge for books and materials "as needed" and have had very few problems with it. (the one time I did was with a high school student paying for her own lessons) I give my students (or parents) a week or two notice when students need something for their lessons. However, I have decided to add a materials & registration fee. The materials fee will be waived if the student gets the materials themselves, but the registration fee, ($50 per student, annually) is mandatory. The registration fee I have long considered due to some parents seeming to only want to have their kids only have 3-6 months of lessons!

Meri

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