Is Your Tax Bill Too High?

Don’t miss a single deduction! Here, a checklist of write-offs for studio owners and freelance teachers.

It’s that time again—tax time. (Insert groan here.) You may not be thrilled to sit down and tally up just how much you owe the government, but you can at least ease the pain by being smart about taking the tax write-offs available to studio owners and freelance teachers. Are you making the most of them? Do you even know what they all are? Read on to learn about the major types of write-offs (plus a few that are often overlooked), and check out the sidebar for specific business expenses dance teachers and studio owners are allowed to deduct.

What Is a Write-Off, Anyway?

Write-offs reduce the total income you’ll be taxed on as a business owner. If your business brings in $75,000, for example, and you can deduct $10,000 in write-offs, you’ll only be taxed on $65,000. Write-offs, says arts and entertainment accountant Jessica Scheitler, break into three categories: business expenses, personal deductions and credits.

Business expenses are the expenses directly incurred from running your own business (studio owners) or teaching (freelance teachers). (You’ll need well-organized receipts, of course.)

Personal deductions are nonbusiness expenses: your home mortgage interest, property taxes, any charitable donations you make. “Everyone, whether you’re in business or you’re a W-2 employee or even unemployed, gets personal deductions,” says Scheitler. “These can be itemized, or you can take the standard deduction [$6,200 for an individual in 2014].”

Credits, though they still reduce the amount of taxable income you owe, are treated differently: You won’t get too many, and you have to qualify. An example would be the health care tax credit: For 2014, if you have fewer than 25 employees, pay them an average salary of less than $50,000 and pay at least half of their health insurance premiums, you can get up to 50 percent back on those premiums. “In tax preparer land, every credit has a separate form,” says Scheitler. “They’re more complicated, but they usually get you more money back.” DT

 

Did you know?

*“You can go negative on business expenses!” says Scheitler. “Most new businesses go negative, and the IRS allows this.” The general rule is that you can lose money for three out of five years, but “then you need to start gaining ground.”

*You should be keeping track of your income and expenses all year long. Scheitler meets with her studio owner clients in November or December so “we can see what’s going on in the business and buy extra stuff or make changes so that their tax is as small as possible. It puts studio owners in the driver’s seat if they look at it before the year ends.”

*Though having an accountant file your taxes might not be the best fit for everyone, there are definitely perks. A professional tax preparer will be familiar with common audit triggers and can steer you clear of them. “There are a lot of minor mistakes that can happen,” says Scheitler. A professional offers you another pair of eyes and a fresh perspective.

 

7 Write-offs Often Overlooked

1 Business gifts “This could be any gift [worth $25 or less] that’s intended to advance your business,” says Scheitler. “I have a tattoo artist client who buys snacks and beer for his clients while they get tattooed. He might be thinking about customer service and trying to be nice, but that still counts.”

2 Copyright expenses

3 Makeup, hair and nails for

theatrical use Your own haircuts don’t count—but the sparkly stage makeup you buy for your comp kids to wear for that aliens piece definitely does.

4 Memberships, dues and

subscriptions Like your subscription to Dance Teacher!

5 Muscle conditioning and massage

6 Website expenses

7 Tour and convention travel Hotels; meals; car rental; gas; parking; tolls; air, rail and bus fares

 

What You Thought You Could deduct—But Can’t

Gas receipts These alone won’t get you a write-off. You need to log your mileage for business travel, using odometer readings, and note the business purpose for each trip. “We need to show the total miles and how many were for business,” says Scheitler.

Donated time or lost wages “You don’t get to write off volunteer time,” says Scheitler. “And you can’t say, ‘I didn’t get paid for this, so subtract the $500 I should’ve gotten paid.’ That would mean we’re writing off the time you spent, and you don’t get to write off time.”

 

What Can I Deduct?

Advertising and promotion

Banking service charges for business accounts

Business cards and printing

Business-deductible mortgage interest (if you own your studio building)

Business meals and entertainment (you’ll get a 50 percent deduction on your tax form)

Cell phone (if your personal phone doubles as your business phone, your write-off is based on a usage percentage)

Clothing (dancewear)

Commissions and fees

Computer and internet expenses

Continuing education (the Dance Teacher Summit you attended, for example, or the marketing seminar)

Contract labor (someone who is not your employee—anyone who gets a 1099)

Costuming

Discounts on tuition (In your records, always show the original total, and then subtract the discount, a tax-deductible expense.)

Equipment leases

Health insurance premiums (Depending on your business type, it will be done differently; consult your accountant.)

Legal fees

Liability insurance

Licenses and permits

Music and sound equipment

Office supplies and expenses

Payroll taxes

Postage and printing

Publicist

Repairs and maintenance

Retail inventory (dance supplies, for instance)

Salaries and wages

Sheet music, CDs, DVDs, iTunes

Studio rent

Studio supplies

Tax and accounting fees

Transportation (parking, fees, tolls, noncommuting cab fare)

Utilities

Thinkstock

Music
Mary Malleney, courtesy Osato

In most classes, dancers are encouraged to count the music, and dance with it—emphasizing accents and letting the rhythm of a song guide them.

But Marissa Osato likes to give her students an unexpected challenge: to resist hitting the beats.

In her contemporary class at EDGE Performing Arts Center in Los Angeles (which is now closed, until they find a new space), she would often play heavy trap music. She'd encourage her students to find the contrast by moving in slow, fluid, circular patterns, daring them to explore the unobvious interpretation of the steady rhythms.


"I like to give dancers a phrase of music and choreography and have them reinterpret it," she says, "to be thinkers and creators and not just replicators."

Osato learned this approach—avoiding the natural temptation of the music always being the leader—while earning her MFA in choreography at California Institute of the Arts. "When I was collaborating with a composer for my thesis, he mentioned, 'You always count in eights. Why?'"

This forced Osato out of her creative comfort zone. "The choices I made, my use of music, and its correlation to the movement were put under a microscope," she says. "I learned to not always make the music the driving motive of my work," a habit she attributes to her competition studio training as a young dancer.

While an undergraduate at the University of California, Irvine, Osato first encountered modern dance. That discovery, along with her experience dancing in Boogiezone Inc.'s off-campus hip-hop company, BREED, co-founded by Elm Pizarro, inspired her own, blended style, combining modern and hip hop with jazz. While still in college, she began working with fellow UCI student Will Johnston, and co-founded the Boogiezone Contemporary Class with Pizarro, an affordable series of classes that brought top choreographers from Los Angeles to Orange County.

"We were trying to bring the hip-hop and contemporary communities together and keep creating work for our friends," says Osato, who has taught for West Coast Dance Explosion and choreographed for studios across the country.

In 2009, Osato, Johnston and Pizarro launched Entity Contemporary Dance, which she and Johnston direct. The company, now based in Los Angeles, won the 2017 Capezio A.C.E. Awards, and, in 2019, Osato was chosen for two choreographic residencies (Joffrey Ballet's Winning Works and the USC Kaufman New Movement Residency), and became a full-time associate professor of dance at Santa Monica College.

At SMC, Osato challenges her students—and herself—by incorporating a live percussionist, a luxury that's been on pause during the pandemic. She finds that live music brings a heightened sense of awareness to the room. "I didn't realize what I didn't have until I had it," Osato says. "Live music helps dancers embody weight and heaviness, being grounded into the floor." Instead of the music dictating the movement, they're a part of it.

Osato uses the musician as a collaborator who helps stir her creativity, in real time. "I'll say 'Give me something that's airy and ambient,' and the sounds inspire me," says Osato. She loves playing with tension and release dynamics, fall and recovery, and how those can enhance and digress from the sound.

"I can't wait to get back to the studio and have that again," she says.

Osato made Dance Teacher a Spotify playlist with some of her favorite songs for class—and told us about why she loves some of them.

"Get It Together," by India.Arie

"Her voice and lyrics hit my soul and ground me every time. Dream artist. My go-to recorded music in class is soul R&B. There's simplicity about it that I really connect with."

"Turn Your Lights Down Low," by Bob Marley + The Wailers, Lauryn Hill

"A classic. This song embodies that all-encompassing love and gets the whole room groovin'."

"Diamonds," by Johnnyswim

"This song's uplifting energy and drive is infectious! So much vulnerability, honesty and joy in their voices and instrumentation."

"There Will Be Time," by Mumford & Sons, Baaba Maal

"Mumford & Sons' music has always struck a deep chord within me. Their songs are simultaneously stripped-down and complex and feel transcendent."

"With The Love In My Heart," by Jacob Collier, Metropole Orkest, Jules Buckley

"Other than it being insanely energizing and cinematic, I love how challenging the irregular meter is!"

For Parents

Darrell Grand Moultrie teaches at a past Jacob's Pillow summer intensive. Photo Christopher Duggan, courtesy Jacob's Pillow

In the past 10 months, we've grown accustomed to helping our dancers navigate virtual school, classes and performances. And while brighter, more in-person days may be around the corner—or at least on the horizon—parents may be facing yet another hurdle to help our dancers through: virtual summer-intensive auditions.

In 2020, we learned that there are some unique advantages of virtual summer programs: the lack of travel (and therefore the reduced cost) and the increased access to classes led by top artists and teachers among them. And while summer 2021 may end up looking more familiar with in-person intensives, audition season will likely remain remote and over Zoom.

Of course, summer 2021 may not be back to in-person, and that uncertainty can be a hard pill to swallow. Here, Kate Linsley, a mom and academy principal of Nashville Ballet, as well as "J.R." Glover, The Dan & Carole Burack Director of The School at Jacob's Pillow, share their advice for this complicated process.

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Teachers Trending

From left: Anthony Crickmay, Courtesy Dance Theatre of Harlem Archives; Courtesy Ballethnic

It is the urgency of going in a week or two before opening night that Lydia Abarca Mitchell loves most about coaching. But in her role as Ballethnic Dance Company's rehearsal director, she's not just getting the troupe ready for the stage. Abarca Mitchell—no relation to Arthur Mitchell—was Mitchell's first prima ballerina when he founded Dance Theatre of Harlem with Karel Shook; through her coaching, Abarca Mitchell works to pass her mentor's legacy to the next generation.

"She has the same sensibility" as Arthur Mitchell, says Ballethnic co-artistic director Nena Gilreath. "She's very direct, all about the mission and the excellence, but very caring."

Ballethnic is based in East Point, a suburban city bordering Atlanta. In a metropolitan area with a history of racism and where funding is hard-won, it is crucial for the Black-led ballet company to present polished, professional productions. "Ms. Lydia" provides the "hard last eye" before the curtain opens in front of an audience.

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