The Musician’s Guide to Taxes

siliconupdates


The opportunity to be creative-and the possibility to be your own boss-makes working as a musician exciting. Below are a few of the very best business deductions and expenses for self-employed musicians, as well as some tips to help you through filing your tax return.
Your Studio or Workspace
Woman recording guitar in her home sound studio

Owning a music business likely requires certain monthly expenses, and you may claim these as deductions to lessen your tax liability. Included in these are:

tax credit for music lessons guide

booking fees for recording studios
rent for classroom or teaching space
utility costs for your workspace
Launching and keeping your music business usually involves paying some basic business expenses, and you will deduct these on your tax return. Remember that expenses related to a home studio are deductible, as are:

the expenses associated with registering for a small business license
maintaining insurance
fees associated with maintaining your website, like domain registration and monthly hosting
Other allowable deductions include:

membership fees to professional associations, like the American Federation of Musicians
professional services essential for your business, such as lawyers’ fees and tax preparation costs
Note, too, that when you attend functions sponsored by industry associations like the National Association of Music Merchants, or NAMM, and Audio Engineering Society meetings, your travel, lodgings, meals, and attendance fees are deductible business expenses so long as there’s a business reason that you should attend.

Instruments and Performances
Being a musician, some of your greatest costs-your instruments, cases, bows, music stands, even your music library-are usually considered capital expenses. You’ll pay for them upfront, but use them over several years, instead of regular, ongoing costs like rent and utilities.

However, you might not be able to claim the entire upfront cost as a business expense, you might be in a position to claim some of the price in small increments as time passes (a process called depreciation).

Keep all receipts for happen to be lessons, recording sessions, and performances, since you can claim the mileage come tax time. Instrument upkeep and repairs, and the expense of consumable goods like rosin, are also deductible expenses.

Musical Events
Deductions often overlooked by musicians are the costs of such things as tickets, transportation, and parking, incurred when you attend other musicians’ performances. You attend these performances to be able to take pleasure from them, but also to find out about musical trends, making them deductible.

Approaches for Success
For all the expenses you intend to deduct, you’ll need documentation by means of bills or receipts. Keep all your receipts in some folders. For instance:

Put home utility bills in a single place so you’ll be ready to calculate your office at home deductions at tax time.
You may also receive a series of 1099 forms from your clients before tax time. Keep these and all the records of your earnings in one folder to easily calculate your total income.
Review income and expenses monthly, organize your bills and receipts as needed, and ensure you’re putting away enough money for your quarterly estimated tax payments if you are required to pay them. Monthly review and adjustments helps spot any missing documentation.

Next Post

How to choose a safe self balancing scooter

Self balancing scooters, or hoverboards as they’re commonly known, are an extremely popular toy recently but do come with some clear dangers. With nothing to carry on to and no rails, falls are an absolute possibility! What in the event you look for whenever choosing a safe self-balancing scooter for […]

Subscribe US Now