Tax Question

Duojett71Duojett71 Posts: 9,494
I am wondering if any of you guys deduct any of your music expenses associated with recording and gigging? More specifically do you do so without being an LLC or declared business?

My band gigs on the average 2 times a month. Also we recorded an album last year that we all came out of pocket for. Is possible to claim some of the income on my taxes and then declare the expenses as a deduction? I have had someone recommend that I do it.....but I have also read some things online that would cause me to think it is illegal. Just wondering what some of you guys do and see if you had any insight.


  • My father in-law does my taxes (he's a financial planner and is alway up to date on the tax laws).  Every time I ask if we can write off any musical costs, he asks: "Can you show income?" (from music).  Which means is there any paper trail? 1099s for or income receipts for anything?  You can double check this, but I think you have to be able to show income. You can't just show costs and then write them off.  That would be like trying to write off golf or skiing.

    This year, Amy did enough session work that she got 1099s from several of them. We MAY be able to do something this year, but I doubt it.
    In the midst of the sort of general malaise that only the genius possess and the insane lament.
  • Duojett71Duojett71 Posts: 9,494
    Through our Bandcamp site I can show CD and merch  sales. The clubs always pay out in cash and we never get receipts....maybe we should start asking for them when they pay us out. What I wanted to do was deduct my part of the recording costs. The Cd's and merch was available through our Bandcamp last year and I can log in and show all of our sales through that site. Just not sure if that is legit enough...
  • Might be worth asking a tax guy.
    In the midst of the sort of general malaise that only the genius possess and the insane lament.
  • I'm not a tax professional and it has been a couple of years, but this is how I understand it:  You have to show income (not profit?) within 3 years.  If you are just pouring money into something it's a hobby and losses for 3 consecutive years is considered a hobby unless you can prove otherwise.  I deducted expenses for a couple of years when I was in a band and we were active.  I documented everything, especially marketing costs, to show that we were actively trying to run a band and not a basement hobby. 
  • Duojett71Duojett71 Posts: 9,494
    In many ways my band is a hobby....but in other ways I think we have gone beyond that. We have put out two releases and we are seeking label interest. Not really a major label....but an independent label that will distribute the music to more people than we can. Also we are doing a short tour this spring....and I am sure that there will be others to follow. I thought about it today that maybe I should be documenting all our expenses and collecting receipts. I feel like we as individuals deserve some kind of tax break. We are helping to generate income for every club we play at.....incomes that the clubs are not so generous in sharing....
  • I feel like we as individuals deserve some kind of tax break.

    You kidding?  This is America. Only the rich get tax breaks.
    In the midst of the sort of general malaise that only the genius possess and the insane lament.
  • jebbuddajebbudda Posts: 5,030
    This is a subject I need to get my shit together on .

    Carl Hupp....a guy I play with in multiple money generating musical projects has been a self employed fulltime " musician " since the 80s .

    First of all.....his accountant deals with many musicians . When I told my accountant/tax guy I wanted to start paying taxes on my music earnings he looked at me and said " Jeb....Why don't you get a real job ".

    Carl also teaches and pays his taxes quarterly and has a TON of write offs . He is one of those guys that keeps track of every fuckin' thing . That sorta shit drives me crazy .

    I file jointly with my wife and have been " unemployed " for the past two tax returns .

    80% of what I make is CASH . This year I'll get two 1099s totaling maybe 7500.00 . One place writes me a check and I play there every other week...twice a month . Other than that its ALL CASH . I perform 3-5 gigs a week averaging about 1000.00  depending on the time of year.

    Tonight was Fat Tuesday and the downtown/Fells Point venues operates " Nashville " style . The bar pays a flat rate...per man....100.00 . The patrons are expected to contribute to the "tip " jar .  So for a snowy Tuesday we are happy to walk with 300.00 each (Trio ) . All cash and lotsa ones .But there are nights where we don't do anywhere near that during the week . Some places pay a per - centage of the nights sales . Private events are the best . Depending on the band members we can really clean up . Plus if I book the gigs etc etc I make extra .

    I'm going to meet with Carl's tax guy in a couple weeks .  Since I file married I can probably get away with not claiming all the cash but I need to pay something . Evidently if your music revenue is under 10,000 a year it'll be tough to write off any expenses but I know guys that use their BAND as a corporation get a different deal .

    The bottom line seems to be dealing with an accountant/tax guy that deals with musicians is the way to go .

  • As you are not a GAS-inspired gear-hound -- you mostly stick to one guitar and one amp, it's not clear to me what you'd want to write off as musical expenses. Maybe transportation/gas?  I think you're probably better off the way you are. But maybe you should talk to Carl's guy.
    In the midst of the sort of general malaise that only the genius possess and the insane lament.
  • mr_crowleymr_crowley Posts: 6,621
    I know Sweden and USA are very different when it comes to taxes and pretty much how the society is built up BUT I thought I just add that every serious band I've been in or been dealing with in some way has been registrered as a business in one way or another and most musical expenses has been made in the name of that business.. Makes it very easy to full control over all the expenses and incomes and generally keeping it together without messing up your "private economy".

    Just a thought :036:
  • VenomboyVenomboy Posts: 3,601
    Jeb, you sound like a stripper! ;)
  • I've seen him with out a shirt on -- he makes faces with his nipples and surgery scar.  :ahhh:

    Frightening, but I slipped a few $1s in his thong nonetheless.
    In the midst of the sort of general malaise that only the genius possess and the insane lament.
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