I’m planning to buy a house I intend to teach piano in. Are there certain tax-things I should be aware of?

Right now, I’m a full-time worker and I am in school to get a Bachelors in Music Education. I am also saving away little bits of money to purchase a home in, hopefully, 5 years. I will have at least $7,500 by then.

I don’t need a large home, but I do hope to use the house as a place to teach piano, voice and whatever else I may do (I will register the business). I will need a place that is in a safe area and looks inviting enough for parents to feel comfortable.

Now, purchasing a house that will be used as a business, are there any tax breaks or incentive programs or anything else I should be aware of?

If you have one room set aside specifically for teaching piano, voice, etc. and don’t use it for anything else then you should be able to deduct some of your house & utilities expense on your taxes. If you use the room for anything else, even one day a year, then you are not eligible for a deduction. There is a form you will have to fill out. I can’t think of the number, it might be 8801. Anyway, go to www.irs.gov and search business use of the home and you will find more information and the form you will need. Also, you will be self employed so you will have to file a Sch. C and a Sch. SE. The SE if 15.3% of 92.35% your net income from the Sch. C. This is in addition to federal income tax. So, you should make estimated payments when you start teaching so you don’t end up owing a lot of money in April. You can search estimated payments at the irs site and find a worksheet and vouchers that you will need to send with your payments.