How to lower your taxes as a musician in the US

Image Credit: Kelly Sikkema

If you’re a musician paying taxes in the US then you can write off certain expense for music and pay less this tax season.

It’s the most wonderful time of the year! Oh wait, no that was a few months ago now. Well it’s the period in which Winter turns to Spring, the flowers start blooming, the weather gets warmer and… American citizens are required to pay their taxes.

Cheer up though. If you’re a musician then you might be eligible to write off some of your expenses from your tax payments and save some money this year.

Whilst we’ve done our best to ensure all information here is accurate, when arranging your taxes it is often best to work with an accountant to ensure you are finalising everything correctly and paying the right amount of tax.

When will you get taxed for music?

If you make money from your music and particularly if your career is as a musician, then you’ll be expected to pay tax on income.

If you’re hoping to make deductions on your expenses for the year then you will need to be making money from your music as a ‘business’.

To show that your music is a ‘business’ you will either have to register a company that you will claim your music expenses through, or alternatively you will need to prove that you make a profit from streaming income, merch sales, gigging revenues, and so on.

How to write-off expenses

First off, in case you didn’t already know: track ALL the purchases and expenses from your year. Any that are related to your music business should be compiled and kept in a safe and organised place to make things easier when it comes time to file them.

If purchases and expenditures are related to how you make money, then you may well be able to write off some of the taxes.

  • Music gear and equipment (instruments, production gear, gigging equipment, etc.)
  • Software (DAWs, production programs, recording software, etc.)
  • Merchandise (Purchases, storage, shipping, etc.)
  • Recording expenses (Studio fees, engineer & producer costs, guest musician’s fees, etc.)
  • Live music expenses (Practice space, live engineers, roadies, security, performers, etc.)
  • Music distribution and promotion (Fees for distribution to digital services, marketing fees, etc.)
  • Advancement costs (Educational books/content, lessons and coaching, training, etc.)
  • Other digital expenses (Website hosting, programs used for business, social media expenses, etc.)
  • Travel expenses (Fuel and public transport, accommodation, parking, etc.)
  • Talent costs (Fees paid to photographers, artists, accountants, etc.)
  • Office costs (Computer, business cards, supplies, business licenses, etc.)

Whew, that’s a lot huh? That’s a fair summary but still isn’t the whole picture. However, we should reiterate that to ensure you are eligible to deduct any of these expenses then you should speak to a professional – particularly if it adds up to a lot of money.

There are also special rules that apply to many of these various purchases made under the context of your music business. If you feel that any of these expenses apply to you then do proper research from official sources to ensure you’re deducting expenses only where appropriate.

Remember you will also need to provide proof (receipts and bank statements) of any expenses that you wish to claim back on.

Jacca-RouteNote
Find me here
Writing about music, listening to music, and occasionally playing music.

How music distribution deals work

With RouteNote there aren’t any complicated contracts or unexpected fees down the line. We even have a free distribution option!

Music distribution for independent labels explained

2021 is the era of the independent record label, and it’s never been easier to distribute music for free.

Leave a Reply

Your email address will not be published. Required fields are marked *