My DS (20) is going to start teaching guitar lessons at a music school. He just met with them yesterday and has some information and I want to make sure he asks the right questions and keeps track of financial information correctly.
He will be working independently and this is completely appropriate and typical in this situation. He will determine how many students, set his own schedule/availability, and set his own price. He will pay the school 20% of his lesson fee, which covers space, advertising, etc, The person he met with was even careful to tell him that they can't set his price for him, so that is an indication that they know what they are doing.
His situation is that he is a full-time college student. We claim him. His income currently does not come close to needing to pay Federal Income Tax. (Full time in the summer and a little income during the school year.) He also has received a 1099 each of the last 2 years for music streaming, but it has been less than or around $100 so has had no meaningful tax impact.
For this, he will clearly need to know his total lesson income and will pay FICA/self-employment tax.
What records does he need to keep and are there expenses that he can deduct in a useful way? (Again, considering that overall income is under the Federal Tax threshold, but that won't be forever.) I know he needs to keep track of his overall lesson income and the expense of paying the school. What about mileage? Anything else?
And then, what other questions should he ask? I know he needs to ask if all payments from families go through the school and then they pay him and issue a 1099 OR if families pay him and then he pays the school? What else?
This was long - thank you if you got to the end and have suggestions!
