Shake: It’s hard to make it in show business. If you are a Musician, you are probably looking for all the help you can get. Did you know that the IRS can help you? If you play your cards right, you can get lots of pieces to do what you love the most.
Classify it: What makes music for you? Is that your hobby? Or is it your business? If it’s your business, you have a clear tax advantage. If your music is your business, you can usually deduct equipment costs and other expenses on your tax return. If that’s your hobby, you can only deduct up to the amount of income you earn from your music.
Playing Parts: If you’ve decided that your music is your business, you should be prepared. The IRS will attack your claim. They are aggressive about saving money, so you have to play a part. Make sure you know exactly what you can deduct as expenses. You must also report all your earnings. Here are some good ways to make sure all of this is done:
-Looking for Professional Tax Help
-Hiring an Accountant or Bookkeeper
It’s Also A Good Idea For:
-Get a business license
-Keep business cards in hand
-Advertise your band
-Join organizations and Musicians Union
-Copyright your music
*Keep all documents related to your business. You will need them to prove that your music is indeed your business if the IRS gives you trouble.
Files correctly: If you want to reduce your music spending, fill out Schedule C and file it with Form 1040. If you are self-employed, file a Schedule SE as well. If your net income is more than $400, you must also pay self-employment tax.
Rock On: This is the first part to find out your IRS benefits when you are a Musician. Part II will cover what you can cut back on, and how to prove to the IRS that your music is indeed your business. I’ll also list ways to prepare for IRS inquiries.
Now You Have A Smoking Gun… Use It!
