Music lessons can be a costly venture, so when tax time approaches, taxpayers who've had to pay for lessons often seek ways to reduce their taxable income through deductions. The majority of taxpayers will not be able to take a deduction on their income taxes; however, there are certain instances if a taxpayer meets all of the requirements that music lessons may be able to be deducted from income taxes.
In general, music lessons would be considered a hobby. The Internal Revenue Service (IRS) does not afford taxpayers deductions for hobby activities. There is a fine line between hobbies and a business and many taxpayers blur that line as business expenses are deductible. A hobby is deemed to be an activity that a taxpayer engages in for a reason other than making a profit. Taxpayers are permitted to deduct hobby expenses up to the amount of income they have earned from that hobby. For example, if a taxpayer had music recitals and charged for admission, the cost of music lessons could be deducted to offset the income generated from ticket prices.
Medical Expense for Special Needs Child
If you are a parent to a special-needs child, you may be able to deduct the costs of their music lessons if the lessons constitute medical expenses. To meet the requirement to be considered medical expenses, a medical or behavioral professional must verify that the lessons are a form of therapy for that child's particular medical or behavioral problem. The lessons must do more than merely improve the child's general health.
If you are a musician or music teacher, you may be able to deduct music lessons as work-related education. For education to constitute work-related education and thus be deductible, it must meet certain tests established by the IRS. The education must maintain or improve skills that are required in your current employment. Further, your employer or applicable law must require the education as a requirement to maintain your current salary, status or job. Finally, the education must serve a business purpose of the employer. In the event the education is required to meet minimum educational standards to qualify you for your trade or business or if it is part of a program that qualifies you for a new trade or business, you may not deduct the cost of the classes. Accordingly, if music lessons maintain or improve skills required in your current job or your employer or applicable law requires music lessons, you may be able to deduct the cost of the classes.
Even if you are not able to deduct the cost of music lessons on your federal income taxes, you may be able to deduct the costs from your state income taxes. You should check the laws of your state as they change often. For example, the state of Minnesota allows taxpayers to claim a deduction of up to $1,625 for qualified education expenses for children in kindergarten through sixth grade and $2,500 for children in seventh through 12th grade. The Minnesota legislature has specifically defined qualified education expenses to include music lessons.
- Internal Revenue Service: Publication 502 Medical and Dental Expenses
- Internal Revenue Service: Business or Hobby? Answer Has Implications for Deductions (Apr. 2007)
- Minnesota House of Representatives: Income Tax Returns Deductions and Credits (August 2011)
- Internal Revenue Service: Publication 529 Miscellaneous Deductions