Jessica Scheitler combines her experience in bookkeeping and dance to help studio owners tackle their taxes.
After studying dance in college, with minors in arts administration and math, Jessica Scheitler founded Financial Groove, dedicated to helping dance studios and entertainers with their bookkeeping. She spoke to studio owners about taxes at the 2012 Dance Teacher Summit.
Dance Teacher: What made you decide to go into this line of work?
Jessica Scheitler: As an independent choreographer after college, I did a lot of research for myself on bookkeeping, because when I got my tax return done I found I had to make a major case for myself. It became obvious to me that studio owners, artists and entertainers need an advocate. They seemed to be skipped over, because accountants weren’t speaking their language. I had the background in math and experience bookkeeping, so I decided to help people out. Since I was able to speak both languages, it all fell into place.
DT: When you spoke at the DT Summit, you mentioned that it works to a studio owner’s advantage to do things by the book—for instance, to bite the bullet and define a teacher as an employee, rather than an independent contractor, if there is any doubt about the status. Why?
JS: The general consensus among small-business owners is that they want to fly under the radar whenever possible. They think if they’re paying cash under the table they’re helping their business, but really that strategy is working against them.
People tend to be afraid of payroll because they have to pay employment taxes. And it’s a bit of a headache, of course. There’s more paperwork, there’s an extra 12 percent, approximately—depending on your state—that’s coming out of your pocket, and that feels like a burden. Ultimately, however, by defining a teacher as an employee (if she really is an employee and not an independent contractor), you can claim her earnings as a business expense. That will often help you out more. Also, the word is that this issue is something the IRS is going to start cracking down on soon.
DT:What is the number-one thing studio owners can do to improve their tax preparation practices?
JS: It starts with the bookkeeping. Many studio owners are not keeping complete books. I encourage them to be as detailed as possible when bookkeeping, to really go through their day and keep track of everything they do for their business so they don’t miss out on deductions.
They should also do a reality check now and then. People forget that something they justify as a tax write-off is still money being spent. So link reality to what you see in the numbers. Then it will all make more sense once you get to tax time. Things will fall into place much more easily if all the information is there.
Danie Beck speaking at the 2012 Dance Teacher Summit; below: Dance Unlimited competition students in performance.
former owner, Dance Unlimited
As owner of Dance Unlimited for over 40 years, Danie Beck has seen her students go on to study dance in college and perform in national Broadway touring companies. A Dance Teacher Summit ambassador for three years, Beck has recently sold Dance Unlimited to a former student.
Dance Teacher: Over the years, you’ve had as many as 500 students performing in just one yearly recital weekend. How do you organize ticketing for such a high-volume event?
Danie Beck: For many years we went through the “waiting in line at 4 am with a lawn chair” routine, so by the time the parents got into the studio, they were so aggravated it was like dealing with a tiger! And when they got to the auditorium for the show, the grandmother would be saving six seats with a sweater, a purse and an umbrella and people got annoyed.
Something had to change. I couldn’t go through this horrific mob scene every year, so we started a lottery for requesting tickets. There’s an open period of about a week when parents can come in, draw lottery numbers and fill out ticket request forms for each show. At first the office would be mobbed on the first day, but people have learned it really is strictly luck of the draw, and it doesn’t matter when they come. They have an equal chance of getting the seats they want whether they arrive on the first hour of the first day, or right at the end.
DT:How do you assign tickets once you have the ticket request forms?
DB: I do it. I can do about one show an evening, going through the ticket forms, filling each request the best I can, starting with the lowest lottery number. It works well, it’s organized and everyone is polite about it. They understand it’s luck of the draw. One year you might draw number 9; the next year you might draw 99.
I also use the lottery to encourage early registration. If you register early, before April, you draw from a lottery bag of 1–50 instead of 1–100. So it’s useful as an in-house tool for registration, as well.
DT: Did you get a lot of pushback from parents when you made that change?
DB: I was lucky that the lottery worked right off the bat. When you make a big change, you have to believe in it, and you have to show that you do. You go in with a positive attitude. “It’s going to be so much better, you’re all going to be happier,” and so on. Then, once you’re made the change, you work with what you’ve created. You can expand it, or if it’s not working the way you’d hoped, you can adjust it, but you don’t need to announce that. You don’t say, “It wasn’t working like I wanted.” Always stay positive, because if people doubt the way you’re thinking, then they’re going to question every move you make. You simply say, “Yes, that worked well, but I think this will work even better.”
Photos from top: courtesy of Break the Floor Productions; courtesy of Dance Unlimited