Tax questions for musicians

<p>I'm just thinking out loud here, but most music students have had instruments for quite a few years. I suppose there are those who went all the way through their training on borrowed ones, but to be a music major, I think it is just assumed that the student already owns an instrument. If it were to count as COA, then every entering freshman music student would be buying a new instrument to qualify for more need-based aid. And every student who bought theirs in 11th grade or earlier would have no financial benefit at all. I also don't think an upgrade, or replacement instrument would qualify, because that wouldn't be "necessary". </p>

<p>I guess the one time I would think it would qualify would be if an instrumentalist were required to own a "sister" instrument for the particular school -- such as an oboist who was required to buy an English horn, or the horn student who had to have a Wagner tuba or a descant. But I'm not familiar with any school that actually has that as a requirement</p>

<p>binx - </p>

<p>I run a piano and sound design studio out of my home. I use a CPA for my taxes every year. With all the expenses and deductions, well, it gets too confusing for me to do my own taxes. Since I work out of my home, I get to deduct part of my house, electricity, etc. as working expenses. I just save all my receipts, fill out the annual worksheet sent to me by my accountant and, voila, she does them in about an hour. It is well worth the nominal fee she charges me. </p>

<p>Might be worth looking into hiring a CPA to save you and your son the time and the stress of trying to figure it all out yourself. Just think of how much time you spend trying to figure it all out, multiply that by the per hour money your son makes, and see if it isn't less expensive to let someone else do the work for you. PLUS a CPA knows more about tax code than most of the rest of us and can find savings in places you might not think to look!</p>

<p>I have no idea how financial aid rules work but........I suspect that the schools intentionally omit instruments from the list of required items because the cost of anything that is required must be included in the projected cost of attending an institution in calculating an applicant's needs and consequent financial aid. That ends up costing the university or college lots of money. </p>

<p>We toyed, some years ago, with requiring all students to have laptops so that we could integrate technology into the curriculum. It was a nonstarter because of the potential cost to the school. (My, how times have changed. Virtually every student now has a laptop and virtually every professor or instructor makes use of technology!)</p>

<p>Binx, my D had a Holton since 6th grade. It was an intermediate Horn that she owned. When she was accepted to college we realized that she would need an upgrade to a better (and more durable) Horn. Her school was happy to add the cost of the Horn to her COA and thereby increase her aid as such. We had to purchase the Horn first and provide a receipt but it was indeed added. I believe I received that advice here on this forum otherwise I would never have known it was an option.</p>

<p>Thanks! My S purchased a new horn last year. I will make sure he knows to add it in when he fills out his forms this year!</p>

<p>Momof3Stars, it may well have been me that suggested you try to get a new horn included as part of the COA. </p>

<p>But as far as it falling within the "qualified expenses" as defined by IRS Pub 970, I will venture that it would not be. I would speak to the financial aid folks at Fredonia, and see if they have broached that question from a COA/1098T perspective from parents in the past.</p>

<p>Also, I'd get an opinion from your own tax preparer or accountant. I tend to err to the side of caution when it comes to taxes.</p>

<p>Binx and Violadad: I have spoken to a friend of mine who is an accountant. He said as stated to him, the instrument would be like buying a computer for your student and that it could be written off. This was in casual conversation and he did say that I should put this to my actual accountant as I put it to him. I had left a message for my accountant last week and he has yet to get back to me, I will follow up with him today as I need these taxes done and over with so I can revise DD's FAFSA.</p>

<p>While the school was happy to add the cost of the Horn to my D's COA it did not appear on the T1098 which is what perplexes me. My biggest concern is just that my D is just skirting the limit of having a reportable amount of income tax. I was not feeling well last week so I didn't delve deeply into the specifics of what was contained on her 1098 but Fredonia's website is very well done in that you see a copy of the T1098 online and click on the amounts in each box and it gives you an itemized list of what was contained. In a haze of flu medicine I looked at this but did not register much. Today should be a better day. I am treading very new water with this and I also want to err on the side of caution bc my Dh is self employed and we like to make sure all of our I's are dotted and T's crossed tax wise so as not to have issues later. </p>

<p>Will let you know what the accountant says as soon as I can get him to return my calls...</p>

<p>As far as adding the instrument to the COA I see no difference in doing so than if it were a laptop and many schools do that as well. However, there are caps and the $12,000 cello would probably exceed that. I do remember when advised on this last year whoever told me that schools vary on whether or not they will allow the cost of the instrument to be added to the COA. Never hurts to ask!</p>

<p>Momof3Stars, you may want to look at the response by kelsmom to a related question here:</p>

<p><a href="http://talk.collegeconfidential.com/music-major/673438-can-stafford-loan-used-towards-buying-musical-instrument.html%5B/url%5D"&gt;http://talk.collegeconfidential.com/music-major/673438-can-stafford-loan-used-towards-buying-musical-instrument.html&lt;/a&gt;&lt;/p>

<p>In the eyes of a financial aid professional, it appears an instrument purchase for a music major would be considered a valid qualified educational. Whether to use it in determining a qualified educational expense for tax purposes would be determined by you and your tax pro.</p>