Tax Tips for Musicians

Disclaimer: while this advice is synthesized from tax professionals, Ivy Hill is not a tax advisor

With tax season already upon us, we wanted to give our community some musician-specific advice to help get you through. While taxes may not be fun, these tips should make filing taxes easier and help to reduce the total amount of time you spend on the process.

We’ve tried to boil it down to a manageable two step process: Track and Deduct!

  1. Track

    1. Track the number of miles you drive to anything related to your music career: lessons (taking or teaching), performances, recording sessions, shows that you attend as a listener, repair shops

      1. you can track your miles easily on a smartphone using any number of mileage tracking apps such as MileIQ or Everlance

    2. Have a credit card just for music expenses. This makes tracking the money that you spend on your career infinitely easier. Most if not all of these expenses are deductible come tax time, which brings us to our next point:

      pro-tip: minimize your workload and combine your gig log with your calendar. Regardless of what calendar software (or moleskin!) you use to track your teaching and playing engagements, you can simply make note of the amount you are making from said teaching or 

      double pro-tip: for gigs in your calendar, make a quick note of who else was on the gig and anything special or remarkable about the show. This will help spark your memory and in 20 years you’ll be glad you had a record of where you were and who you were with. Louis Armstrong’s pianist Marty Napoleon kept track of every gig he played from age 18 through 80 and when writing his autobiography at age 85 was able to recall many details from his extensive earlier-in-life record keeping.

  2. Deduct! Deduct! Deduct!

    1. As we mentioned, you can use the expenses you incur throughout the year to offset the amount you have to pay in state and federal taxes. Here is a handy list of some of the most common and most beneficial musician deductions:

      1. Home studio expenses

        1. Measure the square footage of you home studio and compare it to the square footage of your home or apartment then calculate its cost as a percentage of your total rent or mortgage

          1. You can also deduct the same percentage off your utility bills!

          2. Any career-related equipment you buy for the space can be deducted as well

      2. Teaching expenses

        1. If you rent a studio to teach private lessons from, you can deduct that cost

      3. Recording expenses

        1. If you rent a studio to record your music in, you can deduct that cost

      4. Travel expenses

        1. This may be the biggest help depending on your mileage! For the 2019 tax year, you can deduct 58 cents per mile driven, potentially cutting your tax bill significantly

          1. Food and lodging purchased while en route to a teaching, performing, or recording engagement (or even a business meeting) are deductible

          2. TouringExpenses like food, lodging, and transportation incurred while on the road are deductible and highly recommended as an offset to taxes

      5. Website costs

        1. Squarespace, Weebly, whatever your hosting service, you can deduct it

        2. Gear purchases

          1. While you still have to pay for the gear itself, this deduction can help you come tax time

      6. Gear maintenance

        1. Rehair

        2. Setups

        3. Repairs

      7. Consumables

        1. Rosin

        2. Strings
          Slide grease

      8. Business licenses

        1. Incorporating yourself as an LLC or any other corporate entity is deductible

      9. Professional Association membership

        1. Any professional organization membership is deductible, including the American Federation of Musicians, National Association of Music Merchants, or one of the many others in the music industry

      10. Professional “research”

        1. The costs of tickets, parking, and transportation to concerts you attend by other artists are deductible, as they are considered professional development

        2. Consuming music through the purchase of a physical album or a monthly subscription to a streaming service like Spotify is similarly considered “research” and therefore a business expense

          footnote: If you have financial goals such as homeownership, or qualifying for other major loans, you may want to consider reducing the amount you deduct. This depends on your individual situation and goals, but banks will look directly at your tax returns and specifically at your net income after expenses rather than your gross income before expenses when you apply for a mortgage or other loan types. Mortgages usually require two years of tax returns for loan qualifications.

    Helpful Terms:

    • Schedule C: the additional tax form you will fill out as a freelance self-employed musician

    • 1099-misc: the form you likely get many of each year from people who hire you as a freelancer and not a payrolled employee

    • W2: the form you may get for recurring work with a particular organization that you are on payroll with

Additional References:

Owen Clapp