The Musician's Guide to Taxes: Top Tax Deductions
The chance to be creative—and the opportunity to be your own boss—makes working as a musician exciting. Here are some of the top business deductions and expenses for self-employed musicians, as well as some tips to guide you through filing your tax return.
Key Takeaways
- You can deduct certain business expenses related to running a music business, such as booking fees for recording studios, rent for teaching space, utility costs, and more.
- Membership fees to professional associations, professional services necessary for your business, and travel, lodgings, meals, and attendance fees for industry functions are also deductible.
- Instruments are usually considered capital expenses, but you may be able to claim some of the cost in small increments over time.
- Costs of tickets, transportation, and parking when attending other musicians' performances are deductible.
Your Studio or Workspace
Running a music business likely requires certain monthly expenses, and you can claim these as deductions to reduce your tax liability. These include:
- booking fees for recording studios
- rent for classroom or teaching space
- utility costs for your workspace
Launching and maintaining your music business usually involves paying some basic business expenses, and you can deduct these on your tax return. Note that expenses related to a home studio are deductible, as are:
- the costs associated with registering for a 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 necessary for your business, such as lawyers' fees and the business portion of your 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 as long as there is a business reason for you to attend.
TurboTax Tip:
Keep all documentation in the form of bills and receipts and review income and expenses monthly to spot any missing documentation.
Instruments and Performances
As a musician, some of your biggest 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, as opposed to regular, ongoing costs like rent and utilities.
While you might not be able to claim the entire upfront cost as a business expense, you may be able to claim some of the cost in small increments over time (a process called depreciation).
Keep all receipts for travel to lessons, recording sessions, and performances, as you can claim the expense come tax time. Instrument upkeep and repairs, and the cost 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 in order to enjoy them, but also to learn about musical trends, which makes them deductible.
Strategies for Success
For all the expenses you plan to deduct, you’ll need documentation in the form of bills or receipts. Keep all of your receipts in a series of folders. For example:
- Put home utility bills in one place so you’ll be ready to calculate your home office deductions at tax time.
- You may also receive a series of 1099 forms from your clients before tax time. Keep these and all other records of your income 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 setting aside enough money for your quarterly estimated tax payments if you are required to pay them. Monthly review and adjustments helps spot any missing documentation.
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