Tax time is rough for everyone, especially musicians. Here’s how to plan now for less stress over taxes later.
- Disclaimer: We’re not tax professionals, we encourage you to consult one!
- Dave tells his story about taxes this year
- People who just don’t figure in their musical work
- Cash under the table everywhere? Ha! Wait until you get your first 1099 from a venue.
- Music as an economic enterprise — you’re contributing to the local economy
- Costs you money too — mileage, supplies, promotional costs, etc.
- If music is your main gig, you probably are seeing a tax professional already 🙂
- You’ve been gigging a while, it’s more than a hobby but not your main income
- This is where we’ll concentrate
- Paul’s story
- Using QuickBooks Self-Employed
- Tracks miles
- Tracks checking and credit card accounts — categorize in/out $$
- Fits into TurboTax Self-Employed
- Costs more but has saved me $100s on my taxes
- What do you need to track?
- Mileage on your car that’s for gigs, rehearsals, or other directly business-related
- Expenditures on supplies — strings, polish, cables, tuners, etc.
- Equipment — yes, this means a bass you buy
- High-cost instruments in some cases are classified as something you have to depreciate over time, can get complicated if you don’t keep good records
- Food you buy at a venue when it’s not reasonable that you could have taken a meal at home
- Not alcohol!
- Keep records on computer or paper!
- Google Sheets is great
- An app (like QuickBooks Self-Employed) helps
- Make sure you know where to find them so in January-April when it’s time for taxes you can jump into action
Photo by John Morgan via Flickr, licensed CC-BY 2.0.