Tax deductions for musicians

Written by genevieve van wyden
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Tax deductions for musicians
Mariachi groups perform and pay taxes. (Digital Vision./Digital Vision/Getty Images)

Concert musicians, symphony musicians, rock musicians or mariachi musicians are all involved in music as a vocation and as a business. If their music business is considered to be self-employment, outside their everyday jobs, they are required to file the Schedule C and report their earnings to the IRS. These musicians can claim certain deductions to help keep their tax costs lower.

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Equipment

As a musician, the Internal Revenue Service allows you to deduct some expenses for your business. This includes your musical equipment -- instruments and speakers can be depreciated over the years until they are totally written off. This normally takes five to seven years. If you don't want to worry about deducting over a five to seven year period, you are allowed to deduct up to £83,200 for your music equipment all at once.

Deduct expenses for instrument strings, drum sticks, valve oil or rosin. You can expense these items in one year.

Home Office or Studio

If you use a room in your home exclusively for your music business, you can claim this as a deduction on your taxes. You must also use your home office on a regular basis, as you set up practices and gigs, and work on personnel matters. When you take this deduction, take care that you do not deduct an amount in excess of your music group's net income.

The same deduction is allowed if you have a music studio in your home (that you use only as a music, rehearsal, instruction and practice studio).

Meals and Travel

Musicians and music groups are allowed to deduct expenses related to overnight travel. This deduction includes a deduction (only 50 per cent) for meals, lodging, tips, phone calls to your home and dry cleaning.

The IRS allows you to deduct expenses related to recording, performances and auditions.

Because meal deductions are allowed, the meal has to include discussions directly related to the group's business (meeting with club owners, fellow musicians, agents, record producers and promoters). Keep a record of all the expenses and deductions in an annual diary.

Vehicle Expenses

Take the IRS "standard mileage deduction" so you don't have to keep receipts related to each trip and stops at gas stations. The only documentation you need is the business purpose for each trip and the distances you drove. You can include visits to the music store for supplies or equipment, travel to your gigs and rehearsals. Again, the best place to keep track of this information is your diary.

Deductions Related to Music Business

Musicians are required to buy CDs, take music lessons, give music lessons, attend concerts and buy stage costumes and make-up. You will have to justify these expenses, so keep every receipt and keep detailed notes in your diary -- the IRS may question every expense you try to deduct.

Other expenses you are legally allowed to deduct include agents' commissions, union dues, initiation fees and assessments, transcriptions, sheet music and arrangements, professional society dues, payments for rehearsal halls/studios or office rental, subscriptions to professional journals, repair and upkeep of musical instruments, instrument insurance, legal expenses related to contract employment, instrument rental, and advertising and promotional photographs.

Education

The IRS allows you to take a deduction for any coaching or training that increases your professional skills or satisfies your employer's requirements for you to remain in your job. You may also deduct the cost of a music course if you are preparing to specialise in another field of music.

Performing Uniforms

Deduct the cost of your uniforms and other performing apparel, including repair, upkeep and dry cleaning only if this clothing cannot be worn as regular clothing and if it is required for your performances or for you to keep your job.

The IRS will not allow you to deduct the cost of everyday (street) clothing that you purchase to save wear and tear on your regular and better clothing.

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