2 Hour Intro to Wing Chun Class

[wckf92]

As for tracking nothing, if you're in the US, you have to track that income. It's taxable.

Not true. Yes, you are correct if making a certain amount...which I do not.

 

[Gerry Seymour]

Not true. Yes, you are correct if making a certain amount...which I do not.

If your total income meets that requirement, all your income (including anything you make from a hobby) is reportable. If your total income falls below that requirement, you are correct.

 

[JowGaWolf]

True enough. All that aside, what he's suggesting would have a significant burden on the instructor (though he doesn't seem to recognize it) to manage the extra paperwork (oh, and if it's not run as a business, you don't get to write off the expenses, so every penny you take in is taxable income). And the amount of financial gain someone could potentially make would be so negligible as to be more than offset by the extra time it would take to access the money and make those weekly or per-class payments.

It seems to me that what they are talking about is Personal Training and not opening a school. If someone tries to run any education type business as they are suggestion then they would quickly run into difficulties. One only has to look at what people currently do in terms of martial arts schools to determine viability of what they suggest. It is most likely that they do not have the facilities that will allow them to get the most out of training unless they are operating out of their homes.

Edit: Also keep in mind that our comments may be based off more information about the direction of the Wing Chun class and what the OP wants to accomplish. From what the OP has stated in the past, he is talking about something that is a regular scheduled based opportunity and not a sporadic "call me when you are ready" opportunity.

 

[JowGaWolf]

Yes, you are correct if making a certain amount...which I do not.

This statement tells me that you are tracking your income. You would not know if you were making the "certain amount" or not, if you weren't tracking it in some manner.

 

[Gerry Seymour]

It seems to me that what they are talking about is Personal Training and not opening a school. If someone tries to run any education type business as they are suggestion then they would quickly run into difficulties. One only has to look at what people currently do in terms of martial arts schools to determine viability of what they suggest. It is most likely that they do not have the facilities that will allow them to get the most out of training unless they are operating out of their homes.

Edit: Also keep in mind that our comments may be based off more information about the direction of the Wing Chun class and what the OP wants to accomplish. From what the OP has stated in the past, he is talking about something that is a regular scheduled based opportunity and not a sporadic "call me when you are ready" opportunity.

Yes, what @wckf92 is talking about is a different thing. In his situation, pay-per-class is the best approach. And in the context of the culture @Hazardi172 is in, it may be a viable option there, as well. In the US, based on the research I've looked at and the experience of the instructors I've talked to and the choices my students make, per-class payment isn't a strong option for recurring classes.

 

[Gerry Seymour]

This statement tells me that you are tracking your income. You would not know if you were making the "certain amount" or not, if you weren't tracking it in some manner.

If he's talking about the minimum amount at which you're required to file a tax return (roughly $10,000 annually), it may not require tracking. If he's only bringing in a couple hundred a month, he'll get nowhere near the minimum requirement and only needs a vague idea rather than a firm number. Mind you, that only applies if he's not making more than that ~$10,000 in total (including the martial arts program, not just from the martial arts program).

 

[Juany118]

If you're okay with paying taxes on every penny that comes in (no expense offset, if you don't run it as a business), then you could just not track it. Of course, if you aren't tracking it, it's possible that revenue will fall below expenses (you're still stuck paying taxes on all that revenue). Unless you're willing to take those losses, that can make it less likely the program continues. Anytime you have expenses to deal with, and revenue to deal with, you are best served by treating it at least a little like a business, even if you do it for the love of teaching (which is why I do it).

You can also do what my Sifu did. He has the school structured as a non-profit. We do the "typical" Martial Arts stuff but also do charity stuff for Veterans groups, the Kapitbayan Filipino American Association among others. Still need to do paperwork though.

 

[Gerry Seymour]

You can also do what my Sifu did. He has the school structured as a non-profit. We do the "typical" Martial Arts stuff but also do charity stuff for Veterans groups, the Kapitbayan Filipino American Association among others. Still need to do paperwork though.

Yes. Perhaps more paperwork (and, IIRC, you need a Board), but some advantages from an expense/write-off perspective. At some point, I might go that route, myself.

 

[Hazardi172]

In the US, it being a hobby doesn't exempt you from paying tax on the income.

Neither in Europe, but it's not visible so..

 

[Gerry Seymour]

Neither in Europe, but it's not visible so..

So, you're advocating bypassing the law?

 

[Hazardi172]

So, you're advocating bypassing the law?

I don't think necessary or desirable to set up as a visible business when all I want to do is teach some VT to friends or train with likeminded people. I have other visible ways in which to earn a relevant income. It seems silly to make such tiny sums visible to the government, involving more work to me that the tax paid would be worth. Just a complete waste of my time

I don't feel as if tax is something I should be working hard to pay.

 

[Hazardi172]

Not unless they are earning interest on it. And if they pay less by paying early, there's zero advantage if they're going to spend the money eventually.

In addition to having the option of making your money work for you until you decide to part with it (therefore keeping it longer being better), there is also the opportunity cost of paying monthly. I prefer to keep my money until I have received the goods or services I want so that I do not close other potential options. Basic common sense I would say

 

[Transk53]

In addition to having the option of making your money work for you until you decide to part with it (therefore keeping it longer being better), there is also the opportunity cost of paying monthly. I prefer to keep my money until I have received the goods or services I want so that I do not close other potential options. Basic common sense I would say

Yeah agree. Common sense to play the middle as it were, especially with the Euro.

 

[JowGaWolf]

I don't think necessary or desirable to set up as a visible business when all I want to do is teach some VT to friends or train with likeminded people.

In the U.S. and for me, running the school like a business is a liability issue. If a student get hurt because they are learning martial arts from me, then it's possible for the student to sue me, and depending on the amount I can lose my personal possessions as a result of being sued.. If I treat the school as a business (an LLC ) then I can avoid the risk that come with unlimited liability. If a person is just teaching to friends then there is some flexibility as to the risks that you'll have. At that point it's just people training an activity together more so than teaching in a school setting.

 

[Gerry Seymour]

I don't think necessary or desirable to set up as a visible business when all I want to do is teach some VT to friends or train with likeminded people. I have other visible ways in which to earn a relevant income. It seems silly to make such tiny sums visible to the government, involving more work to me that the tax paid would be worth. Just a complete waste of my time

I don't feel as if tax is something I should be working hard to pay.

So you are, in fact advocating not paying taxes as the law requires.

 

[Gerry Seymour]

In addition to having the option of making your money work for you until you decide to part with it (therefore keeping it longer being better), there is also the opportunity cost of paying monthly. I prefer to keep my money until I have received the goods or services I want so that I do not close other potential options. Basic common sense I would say

Not opportunity cost if you are going to pay eventually. If not, then that supports the research I mentioned that people,who pay monthly attend more regularly. As for making your money work, that makes sense only if enough money is involves, at a high enough rate of return, to be worth the time spent earning it. The interest income on $10 held for 3 weeks is less than a penny unless you are earning a very high rate (not available in short-term lossless vehicles).

 

[Gerry Seymour]

Yeah agree. Common sense to play the middle as it were, especially with the Euro.

Only if the amounts make it worth it. As for the opportunity cost, that only applies if you might not attend class. His assertion was that people paying on a per-class basis attend more regularly, not less.

 

[Gerry Seymour]

In the U.S. and for me, running the school like a business is a liability issue. If a student get hurt because they are learning martial arts from me, then it's possible for the student to sue me, and depending on the amount I can lose my personal possessions as a result of being sued.. If I treat the school as a business (an LLC ) then I can avoid the risk that come with unlimited liability. If a person is just teaching to friends then there is some flexibility as to the risks that you'll have. At that point it's just people training an activity together more so than teaching in a school setting.

It also allows you to deduct expenses, rendering the program less expensive than running it as a hobby.

 

[wingchun100]

If he's talking about the minimum amount at which you're required to file a tax return (roughly $10,000 annually), it may not require tracking. If he's only bringing in a couple hundred a month, he'll get nowhere near the minimum requirement and only needs a vague idea rather than a firm number. Mind you, that only applies if he's not making more than that ~$10,000 in total (including the martial arts program, not just from the martial arts program).

I thought the minimum you had to earn above was the standard deduction, which if you are single like me is around $7500? So if I earned $7499, I would not have to claim it because the standard deduction wipes that out.

 

[Gerry Seymour]

I thought the minimum you had to earn above was the standard deduction, which if you are single like me is around $7500? So if I earned $7499, I would not have to claim it because the standard deduction wipes that out.

I think the minimum for filing is actually a different number. I forget why, but I recall it being around $10K. Once you earn that much in total (all forms of income), however, all income has to be declared. So, if you only earn $5,000 for the year, you don't file (and wouldn't owe taxes on your MA earnings). However, if you have a job that pays $35,000, and earn $5,000 via MA, your MA earnings are stacked onto your other earnings (minus any allowable expenses).